Japan: Effective 1 April 2024 – changes to the deemed working time system for discretionary work

The Labor Standards Act (LSA) includes a deemed working time system for discretionary work (“Discretionary Work System”) under which the working hours of employees engaged in certain duties can be predetermined rather than calculated on the basis of their actual working time. The Ordinance for Enforcement of the Labor Standards Act (“LSA Ordinance”) and a government notification detail the scope of the duties to which the Discretionary Work System can be applied and the relevant procedures.

However, an amendment to the LSA Ordinance and the government notification, which becomes effective on 1 April 2024, makes the following major changes:

– The scope of the duties to which the Discretionary Work System applies will slightly increase.
– Employee consent to the use of the Discretionary Work System for Specified Duties (one of the two Discretionary Work System types as further explained below) will be required.
– Some changes will be made to the procedural requirements.

Accordingly, employers can consider implementing or expanding their use of the Discretionary Work System if they have any employees whose duties will fall under the Discretionary Work System as amended. Employers who already apply the Discretionary Work System for Specified Duties to any of their employees will need to consider obtaining individual employee consent in order to continue using the system.