Japan’s Workstyle Reform Act – What Is the Compliance Deadline for Your Organization?
Insights
1.06.20
To tackle the karoshi (“death by overwork”) problem, Japan enacted the Workstyle Reform Act in June 2018. The Act requires employers to implement specific measures to limit employees’ working hours and create a healthier and more flexible work environment. The Ministry of Health, Labour and Welfare has set different compliance deadlines ranging from April 1, 2019 to April 1, 2023 for different requirements of the Act. This staggered schedule gives employers sufficient time to amend their work rules and put compliance mechanisms in place. The compliance deadlines also depend on the size of the employer as defined below.
An employer is considered a “large company” under the Act if it does not fall under any of the items in Table 1 and Table 2 below. All other companies are considered mid-sized to small companies.
Table 1
Registered Capital or Contributed Capital:
Retail |
Under 50 million JPY |
Service |
Under 50 million JPY |
Wholesale |
Under 100 million JPY |
Others |
Under 300 million JPY |
OR
Table 2
Number of Full-Time Employees:
Retail |
Under 50 |
Service |
Under 100 |
Wholesale |
Under 100 |
Others |
Timing of Implementation
Requirement |
Deadline for Implementation |
Maximum hours limit and setting of penalties (including criminal penalties) for exceeding maximum hours |
Large Companies: April 2019 Mid/Small Companies: April 2020 |
Mandatory five paid vacation days |
All Companies: April 2019 |
Interval system between working days |
All Companies: April 2019 |
Increased wage rates for different types of overtime |
Large Companies: already implemented Mid/Small Companies: April 2023 |
Strengthening the function of industrial physicians (including companies’ obligations to monitor working hours) |
All Companies: April 2019 |
Equal work, equal pay |
Large Companies: April 2020 Mid/Small Companies: April 2021 |
Establishment of highly skilled professional system |
All Companies: April 2019 |
Three months of flexible time |
All Companies: April 2019 |
The above table only provides a rough summary of the compliance deadlines of the main requirements under the Act. You should take the time to understand the details behind each requirement. All employers with more than 10 employees are required to have a set of work rules and register such rules with the local Labor Inspection Office. The same applies to any changes and amendments to the work rules. When amending your work rules, it is advisable to utilize implementation procedures that do not create a constructive dismissal situation.