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Proposed Changes to Labor Standards Act

May 07, 2015

Cabinet has proposed several changes to the Labor Standards Act aimed at promoting merit-based remuneration and workers’ health. If passed by Diet, these changes will take effect from April 1, 2016. The changes in (1)(i) below which will take effect from April 1, 2019.

Regarding Working Hours and Paid Annual Leave

    1. Small and medium sized companies will have to increase pay for workers working more than 60 hours overtime per month. This will apply in three years time
    2. In cases of extremely long working hours, the employer has an obligation to consult and consider means for protection of the worker’s health.
    3. With regards to annual leave, in the case of workers who are eligible to take 10 or more days of annual leave in a year, employers must, in principle, ensure that the workers take at least five days annual leave by annually scheduling specific dates for such leave.
    4. Companies should make efforts to facilitate improvement of working hours. Decisions made by committees with regards to scheduled holidays for each office may substitute collective agreements between workers and employers.

Realization of flexible working arrangements

  1. The time period over which flexi-time hours are worked are settled is to be increased from one to three months
  2. With regards to activities constituting discretionary work for planning activities, including sales, promotion, problem solving activities and PDCA work that is to be discretionarily handled the law will be renewed in order to simplify the procedure and give consideration to workers’ health.
  3. With regards to highly skilled individuals to be determined via Ministry ordinance (but might include those developing financial products, management consultants, and those involved in R&D and the like) who earn at least ¥10 million per year (again, an amount that is subject to determination via Ministry ordinance), amendments will mean that they will no longer be subject to increased pay for late-night work, holidays, and work-hour regulations as stipulated in the Labor Standards Act under certain conditions.

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