As the Ministry of Health, Labour and Welfare signals plans to make enforcement of overtime guidance more flexible, Japanese companies are once again being called on to shift toward management practices that do not rely on excessive working hours. Even after the changes to policy implementation, balancing employee health with sustainable growth will remain a key challenge.
The Ministry of Health, Labour and Welfare has indicated plans to revise Labor Standards Inspection Office guidance on reducing overtime from September, and Japanese companies are being called on to build management systems that do not rely on excessive working hours. Even as implementation of the rules becomes more flexible, balancing employee health with corporate growth is once again coming into focus.
The caps on overtime themselves will remain in place under the laws related to work-style reform. The standard limits under Article 36 agreements are 45 hours per month and 360 hours per year, while even agreements with special provisions are capped at less than 100 hours per month and 720 hours per year, and are permitted only in exceptional circumstances. Going forward, inspections are expected to focus on measures to safeguard employees' health.
The normalization of excessive working hours makes it harder for people with childcare or caregiving responsibilities to work comfortably and can make it more difficult to secure diverse talent. As Japan's population declines, there is growing support for the view that developing flexible working arrangements will strengthen corporate competitiveness and improve productivity.
Companies are expected to improve operational efficiency through the use of AI and other technologies and to raise productivity with employee health protection as a prerequisite, even as debate over working-hour regulations continues. A previous article covered plans to reconsider applying the 45-hour monthly limit to companies with special provisions and also outlined expanded support measures.