No Overtime Pay in Japan to Spread?

In a bid to increase productivity, PM Abe has decided to pass a No Overtime Pay policy targeted at salarymen whose annual income exceed 10 million yen (provisional).

While there are benefits to the new policy, some people are worried that this would only result in longer working hours at the office instead. The new policy encourages businesses to base employees salaries on results instead of work hours. Meaning, if you can hit your target early, you can knock off early. On the other side, however, on what basis should the target be set? And would it only result in more people working later when their targets are not met?

In such a society as Japan where workers dying of fatigue due to overworking is not rare, this new system is definitely a little worrying. The bigger problem is, the population of people earning over 10 million yen in annual salary stands at around 3.8%, and apparently, the cabinet wants to have 10% of population included in this system. This means, the system could possibly be extended to include those who earn around 8 million yen in annual income. Moreover, many people who make over 10 million yen are executive-level personnel, or even C-suite executives. Executives typically already do not get overtime pay regardless of the number of hours they work, so in order to make this new measure effective, the 10% might possibly exclude such executives, which means that the actual percentage of people who do not get to draw overtime pay might actually be higher than 10%.

Further, when questioned at the parliamentary meeting, Abe indicated that there is no guarantee that this system will not further extend to include even more people in the future depending on how the economy progresses.

It is no secret that many companies who do already do not pay overtime salary to their workers are abusing them by making them work late since the company has no overheads from additional pay. It is worrying to imagine how things would be like when the policy takes place. Will we see a more Europeanised Japan where many workers get to return home early to spend more time with their families, or will this bring the lives of Japanese to a faster doom. While I am no economist, I’m afraid that the latter seems more likely.


Add a Comment

Your email address will not be published. Required fields are marked *