Number of firms ducking overtime payments soars

Labor standards inspectors have found that 18,511 business establishments in Japan failed to pay for overtime work last year, the highest number in about 30 years, the Health, Labor and Welfare Ministry said Tuesday.

The figure marks a sixth straight annual rise and an increase of some 1,500 from the previous year, according to the ministry.

The list of companies in question included Chubu Electric Power Co., which allegedly failed to pay 6.5 billion yen for overtime work, Takefuji Corp., a major consumer loan firm in Japan, and department store Matsuzakaya Co.

The inspectors instructed these establishments to make overtime payments and filed criminals charges against 84 of them for alleged Labor Standards Law violations, the ministry said.

The ministry published guidelines for employers and employees aimed at eliminating unpaid overtime in May 2003. It has also enhanced night inspections of business establishments, warning that unpaid overtime would extend effective working hours to the disadvantage of workers.

The ministry inspected roughly 121,000 business establishments nationwide for possible violations of the Labor Standards Law and other labor safety and hygiene-related regulations.

It found that roughly 15 percent of these establishments had failed to pay overtime wages to their workers.

Under the Labor Standards Law, employers are banned from having their employees work more than eight hours a day or 40 hours a week, except in cases where an overtime agreement has been reached with the labor side.

Employers are then required to pay hourly wages for the overtime work, plus a minimum of 25 percent extra pay. Violators face up to six months in prison or a maximum fine of 300,000 yen.