The recent flip-flop by the Japanese Trade Union Confederation (Rengo) over a government proposal to exempt certain highly paid and specially skilled corporate employees from work-hour regulations once again sheds light on the lingering concerns over the Abe administration's key labor deregulation step. Even without support from the nation's largest umbrella labor organization, the administration appears poised to seek Diet approval this fall for the amendment to the Labor Standards Law, along with a proposed cap on overtime work hours and relevant measures to narrow the wage gap between regular full-time company employees and workers with irregular job status. The proposed scheme needs to be scrutinized from the viewpoint of protecting workers' interests from labor abuse.

The Labor Standards Law limits work hours at eight hours a day and 40 hours a week. Employers are obliged to pay extra wages at increased rates to employees who either worked beyond these limits or during late-night hours or on holidays. Under the proposed scheme, these work-hour regulations would not be applied to certain workers in the "highly professional" category — those with specialized job skills such as financial dealers, analysts, consultants, and research and development staff who earn ¥10.75 million or more a year. Employees who work under the scheme would not be paid on the basis of the hours they spend at work but for their performance on the job.

An amendment to the labor law to introduce the system was adopted by Prime Minister Shinzo Abe's Cabinet in 2015, on the basis of discussions by the Health, Labor and Welfare Ministry's Labor Policy Council, of which Rengo is a member. But the amendment has remained shelved in the Diet for two years due to opposition from labor circles and the opposition camp, which denounced it as a scheme designed to cut the overtime pay for those workers. In early July, Rengo chief Rikio Kozu reached an agreement with Abe to modify the legislation to tighten the requirements on employers to prevent overwork of their employees — and to effectively drop Rengo's opposition to the scheme in exchange. However, Kozu was later forced into withdrawing the tacit endorsement of the amendment after he faced objections from labor unions under Rengo's wing.