Overtime Work in Japan

Overtime Work in Japan

Working in Japan doesn’t have to mean endless hours of overtime work. Nevertheless, overwork is still an issue. Why is it still prevalent? What types of overtime are there? Do you have to “play along”? Read on to find out.

Work in Japan – Stay until the boss leaves?

If you’ve ever thought about working in Japan and have talked to your friends or family about it, you probably know what the average person associates with the topic.

Common stereotypes include the ‘only being allowed to leave after your boss’ as well as the notorious drinking parties with colleagues which often can also be considered as part of work. Aside from that, cases of death from overwork (過労死, かろうし) often make it into international media and shape the basic assumption that Japan is a stressful and inconvenient country to work in.

Traditional work culture

“Why do the Japanese work so hard?” This question is often met with the response that it’s a cultural thing – it’s what the Japanese do, they’ve been raised that way. While that answer isn’t completely wrong, it’s also very vague and not exactly helpful. So, here’s an overview of various cultural factors contributing to longer work hours in Japan.

Loyalty to the company. One product of Japan’s rapid economic development after the end of World War II was the concept of lifetime employment (終身雇用, しゅうしんこよう). Once you entered a company, you stayed there until retirement. In this context, working long hours was showing a high degree of identification with the company and as well as a gesture of gratitude.

Hard work VS efficiency. Somewhat related to the previous point. If you’ve ever read a shonen manga, you know that “giving your best” (頑張る, がんばる) is a big deal in Japan. While the typical western company focuses only on results, in Japan, it’s also the struggle that matters. From a traditional point of view, if you don’t struggle, you’re not doing enough.

Of course, that doesn’t mean that Japanese businesses don’t value efficient work. But an old-fashioned manager would probably see it like this: If you can work efficiently, you’re able to work even more. Thus, if you’re not doing overtime, you’re not “giving your best”.

The customer is king. International visitors often laud Japan for the great quality of its service. The high level of service has become so ingrained in Japanese society that many simply take it for granted. High expectations, however, can be a double-edged sword.

You have to meet your deadlines, or the client won’t be satisfied – this logic probably applies in every country. But many Japanese businesses strongly encourage their employees to go one step further. The goal isn’t to “only satisfy”, but to exceed expectations. Consistently. While this can certainly be seen as a laudable approach to business, it can also put big pressure on employees.

Causing inconveniences for co-workers. “Causing someone an inconvenience” (迷惑, めいわく) is probably one of the arch-sins of Japanese society. If you’re leaving early, then co-workers and higher-ups who stay longer and need something from you will have to wait until the next day unless they do the work themselves.

What has changed – and what has not

Many of the factors discussed above have their origins in the period of rapid economic growth and the so-called “Bubble Economy”. That time, however, is long over. The majority of today’s workplace-related problems spring from this discrepancy between tradition and reality.

However, Japanese companies are adapting to the changing circumstances – some quicker than others. The changes are mostly happening due to two factors. On one hand, we have general, cultural shifts as a result of a long period of economic stagnation and a shrinking population. On the other hand, laws and reforms have been put in place to combat overwork issues. Let’s have a look at both.

Cultural Shifts

The Japanese workforce is dwindling. This trend has been continuing for quite some time now, but in recent years, its effects are beginning to show in earnest. While this situation comes with its drawbacks, there are also some advantages.

First, it’s relatively easy to find a job now, as virtually every economic sector is searching for young talent. The job market has turned into a seller’s market (売り手市場, うりていちば).

In practice, that means that companies can’t just operate under the assumption that they’ll get people that’ll do the job eventually if they just put out their regular offers and wait. Especially companies facing strong international competition – first and foremost the IT sector – have to make better propositions to prevent people from joining their competitors.

In tandem with the shrinking workforce trend, general attitudes toward work culture have changed since the burst of the bubble. A common sentiment you see and hear often is that working long hours was at least “worth it” in the olden days because it made you good money. Now, however, you’re just asked to do more work for relatively little extra pay.

These circumstances have led to “traditional” practices being viewed in an increasingly critical light. In 2016, a high-profile karoshi case at Denso led to widespread debate and discussion on the topic.

Working Reform

In 2017, the Abe Cabinet passed legislation commonly referred to as the “Working Style Reforms” (働き方改革, はたらきかたかいかく). This legislation is currently being rolled out in intervals over the next few years and, for example, binds companies to let their employees take more paid leave.

The reforms also reaffirmed 45 hours per month (360 hours per year) as a non-binding baseline (原則, げんそく) for overtime work. Additionally, a hard, upper limit for “busy months” (繁忙期, はんぼうき) was set for the first time: 100 hours per month. That comes down to about 4.5 hours a day (in a 30-day month with four weekends). Companies exceeding this limit will have to face penalties in the future.

These reforms didn’t come without controversy. The Japanese Trade Union Federation (Rengo) agreed to the legislation, saying that any upper limit is better than none. Opposition parties and other left-leaning commentators objected to this stance, claiming that the new limit effectively institutionalized the “karoshi line” determined by the ministry of health, labor, and welfare.

Another complaint was that companies would simply find excuses to declare more and more months as “busy”. Right now, “busy months” can’t make up more than half a year, but critics fear that businesses will try to stretch this rule before long.

While it can be argued whether the current reforms are sufficient, they at least show that there is a will to leave old traditions behind. However, one thing is clear: Overtime work isn’t going to suddenly disappear with them. In the next sections, I’ll tell you about overtime pay and introduce the different types of overtime you should be aware of to understand differences is payment schemes.

Overtime Pay – is it worth it?

Generally working overtime comes at a 25% premium pay. Overtime pay can be demanded under the following circumstances.

More than 8h a day: 25%
Late-night (10 pm-5 am): 25%
On holidays: 35%

Overtime pay in Japan is additive.
Say, you work overtime on a holiday from 10 pm-12 pm. In that case, you would get both the holiday rate or 35% and the late-night pay of 25%, adding up to an extra 60% pay for every hour worked.

Types of Overtime Work

Now that you have the background, here’s a list of types of overtime you can encounter when working in Japan.

Basic overtime

Japanese: 法定内残業 (ほうていないざんぎょう)

This term points to extra work hours below the nationwide regular work hour limits – 8 hours a day, 40 hours a week as defined by the Japanese labor laws.

For example, if you work from 9 to 5 with a one-hour break in between, you work 7 hours in total. If you continue to work until 6, that one hour of overtime falls under this category.

In general, you will only encounter this type of overtime if your contract contains less than eight hours of designated work time (所定労働時間, しょていろうどうじかん) per day. You DO get paid for this type of overtime, but at the regular hourly rate – there’s no premium on top.

Regular overtime

Japanese: 法定外残業 (ほうていがいざんぎょう)

This is the term for overtime that exceeds the above-mentioned basic work hour limitations. Since 8 hours of work is the standard for most company employees, this type is what most people think about when they hear the term “overtime”.

Compared to “basic overtime”, the most important difference is that payment is required by law to be 25% higher than the regular hourly rate. There are also regulations for late-night work, work on weekends, public holidays, etc. that come with even higher markups.

Service Overtime

Japanese: サービス残業 (サービスざんぎょう)

This informal term refers to unpaid overtime work.

Here’s an example: A company tells its employees to clock out at the regular time, but then asks them to stay for another few hours for “self-study” or something else that will not be officially considered “work time”. That, however, is only an excuse – in reality, some companies expect, strongly encourage or demand of the employees to do more work.

Employers knowingly forcing their employees to do this kind of overtime (or being aware of its existence, but not doing anything about it) are doing so illegally and can face penalties.

Take-out Overtime

Japanese: 持ち帰り残業 (もちかえりざんぎょう)

You can see this as a sub-type of service overtime. It describes de facto overtime that occurs when employees take work home (or to nearby cafés). Employees may choose to take work home even if they are not encouraged or despite being outright forbidden to do so by their company because they fear that not getting enough work done could cost them a promotion.

Pre-determined Overtime

Japanese: みなし残業 (みなしざんぎょう)

Pre-determined overtime is a common sight in Japanese work contracts. Instead of paying for overtime on a case-by-case basis, a certain amount of overtime (and the pay for it) is agreed upon in advance.

For example: A work contract includes a basic salary of ¥250,000 plus an additional ¥40,000 for 20 hours of pre-determined monthly overtime. For the employee, that means they will receive the ¥40,000 even if they’re not doing 20 hours of overtime. However, they also won’t receive any more regular overtime payment as long as they’re doing less than 21 hours per month.

This (legal) strategy is used by companies to avoid the 25% premium on regular overtime pay, among other reasons. So be careful when looking at job offers: Higher upfront pay often goes hand in hand with higher amounts of pre-determined overtime.

Do you really have to work overtime?

So now that we have gone through all of this, one question remains: Do you HAVE to work long hours when living in Japan? Well, I’d say that it would be unrealistic to come here and expect no overtime at all. Aside from that, it depends.

One main reason why young Japanese people continue to put up with the remnants of the old system is that a great number of fresh university graduates still enter companies without any practical work skills. As a result, many tend to accept long work hours as a trade-off for receiving an “in-house education”.

Japan’s insular nature is another factor. Despite the ongoing globalization, most young Japanese are still expecting to stay in Japan and work for a company here their whole life. That’s also one of the reasons why so few feel the need to acquire any relevant English skills whatsoever. In short: Their perspectives are limited to one country.

On the other hand, as a foreigner with marketable skills (especially in high-demand sectors like IT), you have the luxury of being able to pick and choose. After all, if you don’t like it, you can always go back to your home country and aren’t bound to conventions like “at least three years at the first company”. This equips you with a degree of freedom that many Japanese can’t enjoy.

Generally speaking, big companies (大手, おおて) and companies with their HQ outside of Japan (外資系, がいしけい) tend to offer better working environments. However, as the Dentsu case shows, a bigger company doesn’t automatically mean less overtime.

Regardless of your skills or previous experience, I’d advise searching for companies with an international outlook and diverse employee makeup. During my job search two years ago, I thought about it like this: If it’s a company with some amount of foreigners at the “lower rungs” that have been working there for 3+ years, it can’t be that bad. Otherwise, those people would’ve left already.

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My love for ninjas and interest in Chinese characters (kanji) were what first made me come to Japan, as a high school student. Over ten years and many visits later, I’ve found a job here and have chosen it as my new home.