Loose cap on overtime hours

It is doubtful that the government’s proposed limit on overtime hours will serve its intended purpose of curbing the chronically long working hours of the nation’s company workers, whose tragic consequences have included the deaths and suicides of overworked employees. By setting the legal cap so high, the regulation can rather have the effect of the government endorsing the practices of corporate employees clocking a level of overtime hours that is known to have detrimental effects on health. The Abe administration, which is calling for the cap on overtime hours as part of its “work-style reform” agenda, should think twice about the proposal.

The Labor Standards Law limits work hours to eight hours a day and 40 hours a week. Based on an agreement with its labor union, a company can have its employees work up to 45 hours of overtime a month. But the management and the union can agree to add a special clause to such an accord that allows overtime work that exceeds the monthly limit for up to six months a year. Since there is no legal maximum on how far the monthly limit can be exceeded, the amount of overtime the company’s employees can be made to work effectively has no ceiling.

In the government-led discussions that involved representatives from business and labor circles, the Abe administration has proposed that overtime hours be capped at 720 hours a year, or 60 hours a month on average, and that the monthly upper limit can be extended during busy seasons to up to 100 hours or an average of 80 hours over a two-month period. The government has urged business and labor leaders to reach a consensus on the basis of the proposal. Keidanren (Japan Business Federation) Chairman Sadayuki Sakakibara and the Japanese Trade Union Confederation (Rengo) chief Rikio Kozu met on Monday and agreed to conclude their talks by mid-March.

The problem is that the proposed upper limit for the busy period is equal to what the Health, Labor and Welfare Ministry views as the threshold for linking workers’ health problems to overwork. Under the labor accident compensation scheme, a recent history of working 100 hours of overtime a month or an average 80 hours of monthly overtime over a period of two to six months are among the yardsticks used to determine if overwork is responsible for an employee’s fatal stroke or heart attack. In other words, the government-proposed regulation would effectively allow company employees to work an amount of overtime that could imperil their health. What should be noted here is that the criteria is not a guarantee that the workers’ health is safe from harm until their overtime hours reach that level.

The government and big business circles, which had long opposed a uniform cap on overtime hours, reportedly think that up to 100 hours of monthly overtime should be allowed to keep Japanese businesses competitive. Keidanren’s Sakakibara is said to have warned that “a regulation that drastically deviates from current reality will significantly undermine the competitiveness” of the businesses. It sounds pathetic that the competitiveness of Japanese firms depends on its employees working an amount of overtime that puts their health at risk.

Rengo initially said it is “totally unacceptable” to condone a legal cap allowing 100 hours of monthly overtime, but some of its officials are said to be leaning toward accepting the proposal under certain conditions. Abe has told the business and labor leaders to reach a consensus “so that the efforts thus far will not come to nothing” — an indication that the cap on overtime hours will not move forward unless they come to an agreement.

Either way, the proposed cap is not likely to do much to curb overtime hours in most businesses. According to the 2013 survey by the labor ministry, only 1.2 percent of companies nationwide had agreements with their unions to allow monthly overtime in excess of 100 hours.

What often surfaces is that businesses manipulate their employees’ overtime records to make it look like they worked within the limits agreed upon with their labor unions. There also is the problem of companies telling their employees to work overtime for free without clocking the hours. Efforts to curb overwork by company employees must also include an effective deterrence against such practices.

Introducing a legal cap on overtime hours may be a first step in the right direction. But the step being contemplated seems too small to change current practices in any significant way.