Article 32 of Japan’s Labor Standards Act stipulates Statutory Work Hours as “8 hours per day, 40 hours per week.” To have employees work in excess of this standard, the company and the employees have to sign a Labor-Management Overtime Agreement, so-called the 36 Agreement, and submit it to the Labor Standards Office. The company is also required to pay extra wage for the overtime.
<Extra wage rate>
For overtime work in excess of Statutory Work Hours, i.e., 8 hours a day or 40 hours a week, 25% extra wage must be paid.
<Treatment of overtime exceeding Statutory Work Hours>
Example 1 of Statutory Work Hour overtime
Unless the company adopts a variable work hour system, 8 hours per day is the legal standard, i.e., from 9 a.m. to 6 p.m. with 1 hour recess. If an employee worked until 7 p.m., the company must pay 25% extra wage for the 1 hour from 6 p.m. to 7 p.m.
Example 2 of Statutory Work Hour overtime
If an employee worked 8 hours from Monday to Friday and 10 hours on Saturday or Sunday, weekly work hours exceed 40 hours, therefore 25% extra wage must be paid for the exceeding hours.
<Flextime system>
Under a flextime system, if an employee has worked in excess of required work hours, the difference is considered as overtime. If the actual hours worked is the same or less than the required work hours, there will be no overtime payment.
Example
If an employee worked 170 hours in a month with 20 work days,
Statutory Work Hours: 8 hours per day x 20 days = 160 hours
25% extra wage is paid for the 10 hours in excess of the Statutory Work Hours.
[Statutory Holiday]
Article 35 of the Labor Standards Act stipulates that “an employer must provide a worker with at least one day off per week...or four days off or more over the course of a four-week period.” This is the definition of Statutory Holiday.
1. Statutory Holiday Management
Many companies designate Saturday or Sunday as holidays. If an employee worked from Monday through Friday as well as Saturday and Sunday, that means the employee has worked all days of the week. In such case, the last day the employee worked is considered as a Statutory Holiday. Having the employee work on Sunday of this week, which is the Statutory Holiday, is contrary to Article 35.
[Point of Statutory Holiday management]
Working on Sunday is not necessarily in breach of the law. The important point is that an employee takes at least one day off during the week.
Examples: An employee
-worked on Sunday but did not work on Saturday.
-took a paid day-off during the week, e.g. Wednesday.
-did not work on a national holiday during the week.
If the Labor-Management Overtime Agreement (“the 36 Agreement”) includes a clause on Statutory Holiday work and has been submitted to the Labor Standards Office, working on Statutory Holiday is not considered violation of the law. The Agreement must specify how many times in a month employees can work on Statutory Holidays. Working on Statutory Holidays within the limit is not illegal.
<Example> Precondition: A work week is started on Monday.
| Sun | Mon | Tue | Wed | Thu | Fri | Sat |
| 1 work |
2 work |
3 work |
4 work |
5 work |
6 work Non-statutory holiday |
|
| 7 work Statutory holiday (+35% pay) |
8 work |
9 work |
10 work |
11 work |
12 work |
13 work Non-statutory holiday |
| 14 Statutory holiday (+35% pay) |
15 work |
16 work |
17 work |
18 work |
19 work |
20 work Non-statutory holiday |
| 21 holiday |
22 work |
23 work |
24 work |
25 work |
26 work |
27 work Non-statutory holiday |
| 28 work Statutory holiday (+35% pay) |
29 work |
30 work |
31 work |
2. Extra wage rate for Statutory Holiday work
Rate for work hours on Statutory Holidays is 35%.
<Example of wage payment>
An employee worked 7 days in a week, from Monday to Sunday.
- Sunday is considered Statutory Holiday
- 35% extra wage is paid for work on the Statutory Holiday. (60% for late night from 22:00 – 5:00)
