Japan has eased enforcement of its overtime rules, ending pressure on companies with special labour-management agreements to keep monthly overtime below 45 hours, as businesses face labour shortages.

The change is technical. Its significance is that it runs against the direction Japanese labour policy has travelled for a decade.

Where the 45-hour figure comes from

Japanese labour law sets standard working hours and permits overtime beyond them where an employer and a workers’ representative conclude a formal agreement. These are known as Article 36 agreements, and they have historically allowed very long hours in practice.

Reforms introduced in the late 2010s placed statutory caps on overtime for the first time, with a general guideline of 45 hours a month and higher ceilings permitted in limited circumstances. The reforms followed sustained public attention to karoshi — death from overwork — including several cases that became national scandals.

What has changed now is not the legal cap itself but the enforcement posture: labour authorities easing the pressure they apply to companies operating under special agreements.

The demographic squeeze behind it

Japan’s working-age population has been shrinking for decades. Employers in construction, logistics, healthcare and hospitality report vacancies they cannot fill at any wage they consider viable.

An economy short of workers has a limited menu: raise wages to draw people in, increase immigration, automate, accept less output, or work existing employees harder. Japan has moved on several of these — immigration rules have been loosened repeatedly, and automation investment is high — but each has limits and lead times.

Easing overtime enforcement is the fastest of the options and the one requiring no new spending. That is precisely the objection to it.

The argument on each side

Employers and the government’s supporters argue that rigid hour caps in a labour-short economy simply mean work not done — deliveries not made, shifts uncovered, construction delayed — and that flexibility agreed between a company and its own workforce representatives is preferable to an inspector enforcing a number. They also note the caps remain in law; only the enforcement emphasis has shifted.

Unions and occupational health researchers argue that the caps existed because voluntary restraint had already failed, that “agreed” overtime in Japanese workplaces is often not meaningfully voluntary given how workers’ representatives are selected in smaller firms, and that the health evidence linking long hours to cardiovascular disease and mental illness has strengthened rather than weakened since the reforms.

There is also an economic counter-argument that has nothing to do with health: long hours are associated with low productivity per hour, and Japan’s productivity has long lagged comparable economies. On this reading, allowing more hours postpones the investment in efficiency that a shrinking workforce actually requires.

Why it is worth watching from elsewhere

Japan is further into population ageing than any other large economy, which makes it the place where policy responses to workforce decline appear first. Much of Europe, South Korea and China are on similar trajectories with a lag of one to three decades.

What Japan does when the workers run out is a preview. This particular decision — easing the limits on how long the remaining workers can be asked to work — is one of the options on that list, and it is being tested in public.

Sources

• AFP via France 24, on Japan ending pressure to keep monthly overtime below 45 hours under special labour-management agreements, September 2026
• Japanese Labour Standards Act provisions on Article 36 agreements and statutory overtime caps
• Published occupational health research on long working hours and cardiovascular and mental health outcomes
• OECD productivity comparisons for Japan and peer economies