Following an audit conducted in September, the Ministry of Health, Labor and Welfare announced Tuesday that 4,189 businesses violated labor laws, including forcing extended work hours on employees and failing to pay overtime wages, and it ordered them to redress the situation.
The firms represent 82 percent of 5,111 companies selected for the oversight action, based on tips and employment data, against so-called black companies known for abusive employment practices, especially against young workers, the ministry said.
“Even though it was not just targeting (businesses abusing) young people, many young employees are found toiling under duress,” a ministry official said of its investigation.
Failure to comply with the order to correct the conditions may result in the ministry sending information about those companies to prosecutors to charge them with Labor Standards Law violations, the ministry said, adding that their corporate names will also be published.
According to the ministry 2,241, or 43.8 percent, were making employees work illegally beyond the maximum overtime hours set through negotiations between labor and management. It said 1,221, or 23.9 percent, did not pay overtime.
Some employees at 730 businesses worked more than 100 hours of overtime per month, a level the ministry considers conducive to cases of “karoshi,” or death from overwork.
By industry, violations were most frequently found in the customer entertainment category, including food services, hotels and inns at 87.9 percent, followed by the transportation industry at 85.5 percent, and the health care industry, including hospitals, at 83.6 percent.
Illegal overtime work was most common in the transportation industry, and nonpayment of overtime wages was most prevalent in the customer entertainment category and construction industry.
At one company, about 70 percent of workers — mostly in their 20s — were given “managerial posts” to avoid overtime payments. A labor standards bureau determined they did not meet conditions for managers under the labor law and ordered the company to pay a total of ¥1.2 million.
The ministry also received a tip from a worker in his 20s at another company that he was logging 150 hours of overtime monthly and found that at least one part-time worker was doing 170 hours per month.
A former employee in his 20s told a labor standards bureau that he quit after almost no wages were paid for about eight months by the employer, who claimed business was bad. The bureau’s investigation found that most employees at this company had not been paid and that their unpaid wages totaled around ¥9 million.
The bureau is considering sending this employer’s case to prosecutors because it has not responded to the ministry’s request to pay overtime.
Businesses were selected for the audit based on information the ministry received through its phone consultation event held Sept. 1 as well as criteria such as past law violation records and employee turnover data.
While the ministry had expected to inspect about 4,000 companies, it uncovered problems with additional firms and eventually inspected over 5,000 businesses.
The ministry has decided to ask companies hiring those graduating from universities in spring 2015 to disclose worker turnover data of the three previous years as a way for prospective employees to gain insight into working conditions at their potential employers.