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BLACK KIGYO

Unpaid overtime excesses hit young

Overwork abuse stays under radar with new term, younger targets

by Ayako Mie

Staff Writer

Some companies are compelling their younger employees to work more than 100 hours of uncompensated overtime a month to maximize their profits.

Japan has been derided for its long working hours for decades, and the risks of the hazardous practice eventually led to the infamous term “karoshi,” or death from overwork.

Thanks to the Great Recession, however, a new term is circulating among young workers to describe companies that depend on such exploitation: “burakku kigyo” (black company).

How are black companies defined?

The term generally carries sweatshop connotations, but the victims are usually normal office workers.

Experts say such companies resort to exploiting staff in their 20s and 30s, rather than part-timers, by forcing them to work excessively long hours without overtime pay in the name of global competition.

The young workers are often told their base salaries already include overtime pay and that they can increase it if they perform well. These claims are used to lure hungry recruits.

In many cases, workers are verbally abused and subjected to power harassment because disobedience is not an option. Some fall into depression or develop other psychiatric disorders that eventually leave them no choice but to quit the very jobs they were dying to keep.

When did the problem become prominent?

The term burakku kigyo was coined by young workers in the information technology industry during the previous decade. It gained more traction after a 2009 movie based on comments posted on the notorious Japanese Web site 2channel chronicled the plight of a man trapped in such a company.

Are there specific industries where such firms are common?

Whereas large companies tend to reduce costs by outsourcing to save on benefits, experts agree that emerging industries — particularly welfare services — tend to exploit young workers by coercing them into unpaid overtime.

Attrition rates in such companies are usually high. According to a 2012 health ministry report, more than 45 percent of college graduates employed in the service, entertainment and education industries left their jobs within three years.

But critics note that attrition rates alone can’t be the sole criteria for determining whether a company is exploiting workers.

If Japan is notorious for its long working hours, why is this becoming a social issue now?

When karoshi emerged during the bubble years in the 1980s, both young and old employees were victims.

Despite the nominal reduction in working times that the karoshi phenomenon instigated, Japan still has the second-largest ratio of people working more than 49 hours a week, according to the International Labor Organization. Topping the list is South Korea.

Haruki Konno, head of the nonprofit organization Posse, which offers advice to employees whose companies are bent on working them into the ground, said that burakku kigyo is just a modern-day take on karoshi where the main targets are people in their 20s and 30s who are desperate for full-time jobs in Japan’s worst economic times since the war.

Konno said exploitative companies hire new college graduates en masse, assuming most won’t be able to survive the harsh conditions and will eventually resign.

Then they just hire more.

“These companies are destroying young and talented workers because they think they are replaceable,” he said.

When employees develop depression or other syndromes, such employers will only agree to accept voluntary resignations, and only after they are forced to take medical leave and their doctors declare them cured, Konno said.

This is because firms don’t want to be held accountable for mental disorders, let alone pay compensation.

Isn’t the public protected by overtime regulations?

The labor law prohibits companies from letting employees work more than 40 hours a week, but Article 36 offers a loophole by allowing them to cross that threshold as long as their labor unions consent.

The threshold for overtime is considered to be around 45 hours a month. Although the Health, Labor and Welfare Ministry regards anything over 80 hours a month conducive to karoshi, companies can exceed this if the unions sign the special clause under Article 36.

According to a survey by My News Japan, more than 60 percent of Japan’s 225 most popular companies compel their employees to do more than 80 hours of overtime per month, and sometimes even 160 hours.

Uniqlo owner Fast Retailing Co. and pub chain Watami Co. are among those companies rumored to be burakku kigyo.

Fast Retailing declined to comment on the reported allegation when contacted by The Japan Times.

On June 6, weekly magazine Shukan Bunshun ran a story accusing Watami of such exploitation. CEO Miki Watanabe, rebuffed this allegation on Twitter, claiming the article was not based on fact and vowing to consult the company’s lawyers about the claim.

Watanabe will be running for a seat in the Upper House in July as a candidate for the ruling Liberal Democratic Party.

Shigeyuki Jo, a human resources consultant, said Japan’s traditional concept of life-time employment was based on the custom of working overtime without pay.

“Most workers in Japan are forced to work under the burakku kigyo standard in the name of life-time employment, especially at small and midsize firms, because they want to hold onto their jobs,” said Jo, who said he used to log about 1,500 hours of OT a year working for Fujitsu Ltd.

Can such abuses be curbed?

Konno of Posse said it is hard for victims to speak out against oppressive management teams because they feel they are partly to blame for agreeing to the situation, despite not knowing any better. As a result, many oppressed workers don’t bother to step forward.

New employees are trained to be obedient from the start. The pressure is so high and pervasive throughout the country that most don’t even realize they are being abused, Konno said. Some thus refuse to protest for fear of sabotaging their careers.

“Victims cannot even quit (when they want to) because employers won’t let them. They do not get any compensation. There is no way for them to escape,” he said.

Has the government attempted to rectify the problem?

The Democratic Party of Japan is pledging in its campaign platform for the House of Councilors to mandate that companies specify their turnover rates in their recruitment ads so job hunters can get an idea about their working conditions.

But experts say it is difficult to set up labor standards that can prevent companies from abusing employees.

It is also hard to get a realistic grasp of the abuse because workers often fail to log their OT for fear of being penalized by their employers, who are leery of exceeding the 80-hour limit and risking litigation.

What kind of safety net is needed?

Prime Minister Shinzo Abe has apparently floated the idea of a “discretionary working system” that critics say will only encourage black company practices.

Under the system, workers and employers agree in advance on how many hours certain tasks require and how much they should be paid to do them, regardless of the reality.

Jo said that introducing the system would require companies to provide more specific job descriptions — rather than vague references to broad responsibilities — so workers are not obligated to engage in unrelated tasks.

Konno of Posse said the government should mandate an overtime cap and ensure there are no loopholes.

“Those companies think they can do anything to maximize their profit. But wearing out hopeful young workers is really eroding Japan’s competitiveness in the long run,” he said.

The Weekly FYI appears Tuesdays. Readers are encouraged to send ideas, questions and opinions to hodobu@japantimes.co.jp

  • suloza

    Many things need to change to reach a plural, balanced society. The lack of political opposition. The abusive amakudari system. The excessive power of corporations. The absence of real unions. The education system reducing self-affirmation, and conducting to planned recruiting that effectively abolishes a free labor market – all these make citizens less than free in choosing their occupation. The labor market in Japan is rigged for the company interests, and all those who decide they don’t want to play under those rules are left to the “damaged worker market”: low pay, part-timers, low insurance, unpaid overtime, etc. It is a very high price to pay for nonconformism. And because corporations ensure they “own” a majority of households, the system is rigged and impossible to change.

    Very impressive piece of social control!

  • Richard Grumbine

    My partner works in an industry where they tend to work 6 days a week… for 10plus hours a day… no overtime… no holiday pay… no sick pay… she is a beautician… its not pretty…

  • Ron NJ

    “Despite the nominal reduction in working times that the karoshi
    phenomenon instigated, Japan still has the second-largest ratio of
    people working more than 49 hours a week, according to the International
    Labor Organization. Topping the list is South Korea.”
    Yet the government absolutely insists the average work week is 35.5 hours (~1700 hours/year) in every single official report.

  • zer0_0zor0

    In industries where the work encompasses tasks that fall under the category characterized as encompassing a degree of 裁量労働 abuse is rampant. Any industry including design falls under that rubric.