May 18, 2017 6:00 am JST

Japanese companies face overtime disclosure requirement

New rules, expected in 2020, to carry penalties for violators

Long working hours have become entrenched in the Japanese economy.

TOKYO -- Japanese businesses over a certain size would have to publicly disclose workers' overtime hours or face penalties under rules to be rolled out by the government as early as 2020.

The mandate would apply to the roughly 15,000 corporations that employ at least 301 workers, which are considered "large companies" under Japanese law. Smaller concerns are likely to get a nonbinding "best-effort" directive.

Large companies would be required to submit average monthly overtime hours once a year to a database maintained by the Ministry of Health, Labor and Welfare, and to reveal those numbers on their corporate websites.

Companies that release doubtful information will first be subject to administrative action. Willful violators could incur fines of up to 200,000 yen ($1,800).

Japanese work hours remain long by international standards, and excessive overtime has become an enduring social problem. Excluding part-timers, the typical Japanese worker put in an annual 2,024 hours of labor in 2016, government data shows, which is largely unchanged from the 2,050 hours in 1996. 

Prime Minister Shinzo Abe's government, which has made workplace reform its signature issue, seeks to tighten overtime rules. Currently in the works is a hard annual overtime cap of 720 hours for nearly all cases. Proposals for this and an "equal pay for equal work" rule protecting non-regular workers will be submitted in a parliamentary session this fall.

The labor ministry hopes a overtime disclosure requirement would lead to competition among rivals to reduce work hours. University students could also use the data while searching for jobs.

Details, including whether to distinguish between regular and non-regular contract workers, will discussed starting next year in the labor ministry's Labor Policy Council.

Business representatives on the council are likely to voice hesitation over a disclosure mandate, which would add to employers' administrative burden. Employers are also reflexively resistant to having their overtime hours stacked up against those of other companies.

Releasing the information only once a year would make it difficult for outsiders to ascertain the actual working conditions at a company. Whether the government can create an effective rule that is also accommodating to businesses remains an open question.

(Nikkei)

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