Changes to the Labor and Industrial Safety Acts – Part 1 Understanding Working Hours

The changes to the Labor and related Laws that were effective April 1 has seen increased consultations around the approaches that need to be taken to ensure Compliance here in Japan. There has been significant interest in the revised 36 Agreement (Overtime and Holiday Work Agreement) and the need to ensure that employees are taking at least 5 days of their annual leave in their holiday leave in a 12 month entitlement period.

However, getting less attention, but actually at least as important is the change to the less widely read and known Industrial Health and Safety Act. The changes here are far reaching and potentially require more changes to internal processes to ensure compliance to this law.

The amendment states that the working hours of all workers must be understood. With the exception of those who are governed under the Experienced Professional system, all employees including management staff, those employees working under the discretionary labor system, those working outside the workplace and even temporary staff are covered and their working hours need to be understood. This comes as an exception to the Labor Standards Act where those in the above positions are typically exempt from attendance records. Consequently, you have two laws with different objectives which has created debate, also fueled by the choice of ambiguous and overlapping language. That said, the importance of understanding Employee’s working hours continues to be an issue and hence having systems in place to track working hours for all employees is now mandatory.

The Health Welfare and Labor Ministry (“Ministry”) do not mandate the method for tracking. Systems provided by an external vendor are acceptable as are internal systems and even an employee self-reporting concept is acceptable. The expectation is that working hours are tracked on a daily basis, however for those who are travelling, out of the office and hence their working hours are difficult to track, if it cannot be done the same day then the following day is advised, but in a worst-case scenario a monthly understanding would also be acceptable.

When looking at the Q&A created by the Ministry and the interpretations that have been given you can see that the Labor Law is focused on tracking actual working hours and management staff, those employees working under the discretionary labor system and those working outside the workplace remain exempt from needing to track their actual working hours, with the exception of the midnight period (10pm to 5am). The Industrial Health and Safety Act (the “Act”) is however requiring Employers to understand the “status of workers’ working hours.” This can be expected to include the expectation that employers are properly implementing measures to protect workers’ health, and to also understand at which times and how much labor workers are able to provide. The Industrial Health and Safety Act however is not concerned with understanding the accuracy of the hours that have been worked, but instead how long workers have been in a state of “working.” The Act is not concerned about whether they have worked or not.

The changes certainly create concern that in due course all Employees working hours will need and can be tracked which will then call into question the external working employees and those working in the discretionary manner.

Until that time, it is now mandatory to have systems in place to track the working hours of all employees. PMP suggests the introduction of a cloud-based time management system that can be utilized by all employees including those in management, working externally and those working in the discretionary systems. That said Companies should choose a system that works for them in conjunction with their Company Doctor and the Health and Safety Committee.

Part 2 will follow and this will address the expanded role of Company Doctor and the Health and Safety Committee.

Thank you.