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2 SPEAKING
FREELY All work and no pay in Japan
By Scott North and Charles
Weathers
Speaking Freely is an Asia
Times Online feature that allows guest writers to
have their say. Please click hereif you are interested in
contributing.
Seeking a
"21st-century way of working" that promotes
increased labor productivity and "flexible working
styles", Japan's Ministry of Health, Labor and
Welfare (MHLW) has issued a draft report
recommending major changes to regulations that
govern working
hours. The centerpiece of the
proposal is an exemption from overtime pay for
white-collar workers.
Opponents say the
white-collar exemption is poorly suited to the
realities of Japanese corporate culture. They see
the establishment of an exemption from overtime
pay as legitimizing the widespread practice of
unpaid overtime. Opposition political parties,
unions and labor lawyers say the law will only
aggravate the problem.
Already Japan and
South Korea are the only countries where
karoshi (death from overwork) is a
recognized phenomenon. Long work hours are so
pervasive that they are believed to be a major
cause of Japan's low birth rate, since many
parents can neither spend time caring for children
nor afford extended-hour child-care services.
Despite demands for both further debate
and the withdrawal of the proposal, and although
important details, in particular the salary level
of exempt workers, remain unannounced, some form
of white-collar exemption appears headed for
passage when the legislation is sent to the Diet
(parliament) this month.
Instead of the
current eight-hour workday and 40-hour workweek
mandated by the Labor Standards Law, the proposal
just announced by the Working Conditions
Subcommittee of the MHLW's labor-policy
deliberation council calls for scrapping
regulations on working hours for selected
white-collar workers.
The proposal is part
of a sweeping labor-law reform that also includes
changes in rules regarding contracts, making it
easier for employers to ax full-time workers
through buyouts and replace them with temporary
staff.
Employers and other supporters of
the proposal criticize the current statute as a
relic of the manufacturing age and therefore not
suitable for regulating white-collar work in the
global economy. They say that unlike factory work,
there is no logic in paying white-collar workers
according to time worked. Rather they should be
judged by their accomplishments.
Opponents
say the exemption amounts to the introduction of a
white-collar piecework system. By replacing the
link between working time and salary with a link
between performance and salary, employers will be
able to determine and adjust both workload and
compensation to maximize profit.
Keidanren, the employers' federation,
wants salaried office workers in "positions of
authority and responsibility" and with incomes
above 4 million yen (US$34,500) per year to be
exempt from rules that require overtime premiums
of time and a quarter for labor beyond 40 hours
per week. That figure would make roughly 70% of
the 23 million white-collar office workers exempt.
According to census data, white-collar
workers make up just over half of Japan's labor
force. Those workers should receive overtime pay
currently estimated at 1.14 million yen per
person. But Professor Morioka Koji, economist at
Kansai University, notes that 690,000 yen of that
is not being paid now. This is an indication of
the current degree to which overtime regulations
are ignored.
The proposal mirrors the
United States' white-collar exemption, which has
been in force for managerial, administrative and
professional employees since 1938. To deal with
increasing class-action challenges to the
exemption by American workers, the US Department
of Labor revised the duties tests and salary
minimums in 2004. The salary minimum for exempt
workers now stands at $455 per week (still only
$23,660 per year).
Despite
exemption-related problems in the US, the American
Chamber of Commerce in Japan strongly supports the
Japanese white-collar exemption. In November, its
Labor Mobility Task Force issued a report called
"ACCJ Viewpoint: Modernize Work Hours Regulation
and Establish a White-Collar Exemption System". It
argues that paying workers for their output rather
than their time would boost competitiveness and
stimulate both economic growth and labor-market
mobility. It calls for broadening the definitions
of "managerial and supervisory" positions to
"harmonize" with the white-collar exemption
system.
The ACCJ blueprint for Japan
mirrors a reported published by the American
Chamber of Commerce in China to prevent
labor-market reforms that would strengthen legal
protections for Chinese workers.
Opponents of the Japanese
exemption are working to raise public
consciousness. But as the Subcommittee on Working
Conditions was hammering out its recommendations,
an Internet poll of 1,000 male and female
full-time workers found that 73% had no knowledge
of the "white-collar exemption". Eighteen percent
had heard the term and only 9% said they
understood its implications.
The
poll illustrates the generally low state of public
awareness about the issue and hints at the
stealthy way in which the proposal has been
discussed. A survey of 900 full- and part-time
workers by Rengo, a trade-union federation,
indicated that 40% find it hard to claim all the
hours they work because supervisors and the
atmosphere in the workplace are hostile.
According to Shimada Yoichi of Waseda
University Business School, increasing numbers of
workers are being classified as "managers" when it
comes to overtime. By paying a nominal "management
allowance" or giving workers management titles,
firms are already avoiding overtime premiums and
legal
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