Japan Eases Overtime Regulations Amid Deepening Labour Crisis

Gist Japan has rolled back an administrative guideline that previously pressured companies to cap employee overtime at 45 hours a month. This policy shift, driven by Prime Minister Sanae Takaichi’s broader growth strategy, allows businesses to fully utilize legally permissible limits of up to 100 hours of monthly overtime to combat a severe labour crisis. For civil services aspirants, this serves as a prime case study of the complex policy trade-offs between macroeconomic growth imperatives, industrial demand, and statutory labour welfare. Background Japan is currently grappling with a deepening labour shortage, which has severely impacted the operational capacity of its domestic industries and prompted demands for flexible work models. Under existing Japanese labour-management agreements, approximately 40% of businesses are legally permitted to mandate up to 100 hours of overtime per month for their employees. Prior to this new directive, Japan's Labour Ministry utilized an informal but strict administrative mechanism: labour standards inspection offices actively pressured companies to keep overtime below 45 hours a month, treating this advisory cap as a de facto regulation. This 45-hour threshold was rigorously enforced because…