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Japan Loosens Overtime Rules Amid Labour Shortage — Karoshi Fears Resurface
The Japanese government has announced a major relaxation of labour regulations, encouraging overtime work to address a growing workforce crisis. The cabinet's plan to expand the 'discretionary labour system' has sparked fierce debate, with experts warning it could reverse hard-won protections against karoshi — death from overwork. In 2024, Japan officially recorded 159 deaths and suicides linked to overwork, though the real figure is believed to be far higher.
Under the proposed changes, employers would gain more flexibility to pay fixed salaries regardless of actual hours worked, effectively removing financial disincentives for long shifts. Critics argue this creates a perverse incentive for companies to pile on work without extra pay, especially as Japan grapples with a shrinking workforce due to its aging population.
What Is the Discretionary Labour System?
The discretionary labour system (saiteki rōdōsei) allows companies to pay workers based on assumed output rather than actual time spent on the job. Currently limited to certain white-collar roles, the government wants to expand it to more sectors. Proponents say it offers workers flexibility; opponents call it a license to exploit.
‘It is presented as giving workers more freedom to work,’ said Rei Seiyama, a labour expert at Ibaraki University. ‘But most workers do not control their own workload. The risk is that they will be forced to work even longer hours.’
The karoshi crisis in Japan has deep roots. The term was coined in the 1970s as deaths from heart attacks, strokes, and suicide — known as karōjisatsu — became epidemic. In a landmark 2015 case, 24-year-old Matsuri Takahashi, an employee at advertising giant Dentsu, died by suicide after logging 105 hours of overtime per month. Her mother, Yukimi Takahashi, told NOS: ‘She slept barely ten hours in her final week. Now that she can finally sleep, she will never wake up.’
Current Overtime Limits: Strict on Paper, Lax in Practice
Japan's 2019 Work Style Reform Act introduced the country's first nationwide overtime caps: 45 hours per month, 360 hours per year. But loopholes are vast. Workers can legally clock up to 100 hours of overtime in a single month — or an average of 80 hours over several months — up to 720 hours per year.
‘That is the threshold where the risk of karoshi increases,’ Seiyama said. For context, one in five Japanese men still works more than 49 hours per week, compared with fewer than one in ten in the Netherlands. A smaller but vulnerable group exceeds 60 hours weekly, putting them at high risk for stroke, heart failure, and suicide.
Why Are Rules So Easily Circumvented?
Underreporting is rampant. ‘There is often a large gap between registered and actual hours,’ Seiyama explained. ‘That makes it very difficult to legally prove overtime abuse.’ Companies routinely pressure staff to log fewer hours than they work, and labour inspections remain underfunded. In the Dentsu case, the company denied extreme overtime until a court ordered the release of her real work logs.
Unlike the European Union, which mandates a minimum 11-hour rest period per day, Japan has no binding rest interval guarantees. Only 7% of Japanese companies offer a fixed rest period between workdays. Welfare rules are largely voluntary; sometimes a health complaint hotline is considered sufficient compliance.
Economic Pressures Driving Deregulation
Japan's labour shortage is acute. The population has been shrinking for over a decade, and industries from manufacturing to services struggle to fill positions. The business lobby has pushed hard for deregulation, arguing that rigid overtime caps hurt productivity and competitiveness. Nearly 90% of major company heads want to expand the discretionary labour system, according to recent surveys.
Prime Minister Sanae Takaichi, who took office in late 2024, has made labour flexibility a cornerstone of her economic agenda. She previously told workers to ‘work, work, work, work, and work’ — a phrase that has haunted her since. In January 2026, she ordered the Ministry of Health, Labour and Welfare to begin discussions on further deregulating work-hour limits.
‘Under the current system, every extra hour costs the employer more money,’ Seiyama noted. ‘Under discretionary pay, the salary stays the same regardless of hours worked — except for night and weekend premiums. So companies have less reason to limit long hours.’
This labour shortage in Japan is not just a demographic issue but a structural one, with many workers in low-productivity, long-hour roles that could be automated or reorganised. Critics say the government is choosing the path of least resistance: pushing workers harder instead of reforming the economy.
Impact on Workers and Families
The human cost is already visible. In 2025, Japan recognised a record 1,304 overwork-related cases, including 1,055 mental health disorders and 88 suicides. The true number is likely far higher due to underreporting and stigma. Families of victims often face years of legal battles to prove the link between work and death.
Yukimi Takahashi, now a campaigner against karoshi, fears her daughter's death will be forgotten. Wiping her daughter's gravestone with a damp cloth, she said: ‘Please do not throw our lives away. That is what I want to tell the prime minister.’
Labour unions and anti-karoshi groups have condemned the reforms. They point out that even the current limits are dangerously close to the ‘karoshi line’ — the threshold beyond which the risk of death spikes. Expanding the discretionary system, they argue, will only push more workers past that line.
What Can Be Done?
Experts suggest several measures to protect workers without hampering productivity:
- Mandatory rest intervals: A minimum 11-hour break between workdays, as in the EU.
- Stronger enforcement: Real-time digital tracking of work hours, with penalties for falsification.
- Binding overtime caps: Lower the legal maximum from 100 to 60 hours per month.
- Worker representation: Empower unions and works councils to negotiate limits.
- Mental health support: Mandatory counselling and stress checks for high-risk roles.
Without such safeguards, the 2025 karoshi prevention policy risks becoming a hollow promise. As Japan races to fix its labour shortage, it must decide whether it values economic output more than the lives of its workers.
Frequently Asked Questions
What is karoshi?
Karoshi is the Japanese term for death from overwork. It typically results from stress-induced heart attacks, strokes, or suicide (karōjisatsu). The term was coined in the 1970s and has since become a recognised occupational health crisis.
How many people die from karoshi in Japan?
In 2024, the government officially recognised 159 deaths and suicides from overwork. However, experts believe the true number is much higher due to underreporting. In 2025, over 1,300 overwork-related cases (including mental disorders) were certified.
What is the discretionary labour system?
It is a pay model where employees receive a fixed salary based on assumed output rather than actual hours worked. The government wants to expand it to more industries, which critics say will encourage unpaid overtime.
What are Japan's current overtime limits?
The legal cap is 45 hours per month and 360 hours per year, but exceptions allow up to 100 hours in a single month and 720 hours per year — the so-called karoshi line.
How does Japan compare to Europe?
The EU mandates a minimum 11-hour daily rest period and a 48-hour maximum working week (including overtime). Japan has no binding rest interval and allows far more overtime, especially under the discretionary system.
Sources
NOS: Overwerk als oplossing voor arbeidstekort, Japan kiest voor soepelere regels
East Asia Forum: Japan's workhorse prime minister tests labour limits
This is Japan: Karoshi — Understanding Japan's Overwork Death Crisis
MHLW: 2025 White Paper on Measures to Prevent Karoshi
Wikipedia: Karoshi
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