ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Politics

Japan's parliament passes work reform bill to limit overtime

New law marks a major turning point in the country's labor practices

The labor reform bill passed by Japan's parliament on Friday addresses the country's culture of overwork, and marks a turning point in its history of labor practices. (Photo by Hirofumi Yamamoto)

TOKYO -- Japan's parliament passed a work reform bill on Friday that limits overtime and eliminates pay gaps between regular and part-time work. The bill, the most important legislation in the current session under Prime Minister Shinzo Abe, is a major turning point in the history of Japan's labor practices.  

The government will amend a package of eight laws including the labor standards act. The first of three main pillars of the bill is a cap of 100 hours a month on overtime, and a limit of 720 hours a year.

Large companies must comply with the new rule from April 2019 or face penalties. Smaller companies have an additional year to comply.

The second pillar of the legislation is "equal pay for equal work," aimed at eliminating wage gaps between regular and part-time workers. The bill mandates the same base salaries for workers with the same abilities, performances and years of service.

Compensation packages should also be brought into line, including holidays and training. Large companies must implement the new rules from April 2020, while smaller companies must start from April 2021.

The third pillar of the bill allows for the exemption of highly paid, white-collar workers from overtime limits. Workers such as financial traders, consultants and researchers with annual incomes of more than 10.75 million yen ($97,500) are subject to the exemption, putting the onus on productivity instead of working hours.

To ensure reasonable working conditions, companies are obliged to give such workers at least four days off every four weeks and 104 days off in a year. The rule takes effect in April 2019.

The prime minister has characterized the current parliamentary session as a "work reform session," expressing a strong desire to have the pass passed promptly.

Masayuki Yuda contributed to this article.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media