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Wednesday, Jan. 24, 2007

Q&A

Election puts overtime-pay exclusion on hold


Staff writer

Wary of an upcoming election, the ruling bloc is backing off on a highly contentious bill that would exclude certain white-collar workers from overtime pay.

But debate over the issue, which unions fiercely oppose, will resurface because the government's retreat is widely believed a mere postponement until after the July Upper House election.

Following are answers to questions about the envisioned system:

What is the "white-collar exemption system"?

Certain white-collar workers would be excluded from legal work-hour restrictions under the Labor Standards Law, which limits work hours to eight hours a day and 40 hours a week and obliges employers to pay for overtime.

The government says the proposed system is modeled after one in the United States with the same name.

A labor ministry advisory panel had been discussing the new system since last February as part of measures to change the employment system so it better reflects Japan's diversified workforce.

The panel adopted a proposal in late December to push for the new system and the Health, Labor and Welfare Ministry has been lobbying hard with heavyweights in the ruling coalition to submit the bill to the coming Diet session.

Who would be subject to the overtime pay exclusion?

Generally speaking, workers immediately below managerial positions.

The panel proposal spells out four conditions: Workers with an annual salary threshold, so far not specified but probably in the 8 million yen to 9 million yen range; workers whose results are difficult to evaluate in terms of hours; workers with certain authority for executing work; workers who have discretion over their hours.

Why is the ruling bloc backing down?

Discussions at the panel involved a clash between labor and management representatives. The panel was supposed to draw a conclusion in mid-December but instead hit an impasse and wrapped up its meeting with disagreements left unresolved.

Unions argue the system would only aggravate Japan's already long work hours. Management says it would offer greater flexibility in working styles for white-collar employees.

Unions and opposition parties branded the proposal the "elimination of overtime pay bill," provoking fear among salaried workers that they would receive no extra pay even if they have to continue working long hours. This worried lawmakers in the ruling Liberal Democratic Party and New Komeito whose eyes are on the summer Upper House election.

Japan Business Federation (Nippon Keidanren) Chairman Fujio Mitarai said Monday it is misleading to focus solely on the overtime pay exclusion.

Why are corporate executives pushing for the change?

They argue the work-hour rules under the 1947 Labor Standards Law were set when most workers were engaged in manufacturing and are now outdated.

They say that evaluating white-collar workers by time is becoming difficult in today's services-oriented, knowledge-based economy as working styles diversify.

Employers say the system would boost productivity because workers will be evaluated on performance, not the time spent at the workplace. They figure this would enable those who finish their job more quickly than others to go home early and spend more time with their families.

Keidanren's Mitarai claims excluding white-collar workers from legal work-hour limitations would offer them more freedom to choose a work style that best fits them. The nation's largest business lobby is demanding that the system cover workers who earn more than 4 million yen a year.

Keidanren's argument apparently follows the logic of the American Chamber of Commerce in Japan, which in its report on deregulation in December urged the Japanese government to ease work-hour regulations and introduce the "white-collar exemption" system.

Why are unions opposed?

Unions are against the system itself because changes to the hour limitations would mean abolishing the most basic protection for employees.

They argue that without changing Japan's notorious penchant for requiring long work hours, the new system would only make matters worse and workers would get less pay.

They say the U.S. system is not suited to Japan's culture or its employment situation. American workers have clear job descriptions when signing a contract, whereas most Japanese have no clear contractual job descriptions, they say.

The Japanese Trade Union Confederation (Rengo) says that even if office workers in Japan finish one assignment, they would not be able to go home early because they would be given new tasks. And culturally, peer pressure and the competition for promotions, which get fewer the higher an employee climbs in a firm, keep workers at the office late.

Unions suspect that if such a system is introduced, it would gradually be applied to a broader range of workers.



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The Japan Times

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