Working Hours Reform: A bird's-eye perspective

Author Name TSURU Kotaro  (Senior Fellow, RIETI)
Creation Date/NO. February 2010 10-J-014
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Although the issue of excessive working hours in Japan has not become more serious in the past 20 years, the reality is that it has not improved either. When considering this problem, it is necessary to draw a line between voluntary long working hours, influenced by factors such as monetary incentives and the desire for career advancement and involuntary work at the behest of companies that have a monopsony in the labor market, face time-consuming internal coordination, or are trying to maintain a buffer for labor adjustment. Given the extremely diversified causes of long working hours, regulations should be designed primarily to protect workers' health, then in order to more carefully embody the needs of individual workers, it is important to resolve issues through a more decentralized framework based on smooth communication between labor and management. As a specific direction for the reform of working hour regulations, existing systems should be consolidated and streamlined. For that purpose, monetary compensation such as overtime premiums should be changed to makeup holidays, as is practiced in Europe, and with respect to the exemption and the discretionary system of working hour regulations, notification to administrative authorities should be made mandatory to prevent the discretionary use of employers, while the scope of subjects should be flexibly determined by labor-management agreements.