Flextime is a formal legal system in Japan, not an informal policy of letting people come in late. Under Article 32-3 of the Labour Standards Act, the employer sets a total number of working hours for a settlement period, and employees decide for themselves when to start and finish each day. The company may set core hours when everyone must be present, but it does not have to.
To use it, the employer must put flextime in the work rules and sign a labour-management agreement with a majority union or employee representative. The agreement sets out who is covered, the settlement period, the total hours and the standard daily hours. Since the 2019 Work Style Reform, the settlement period can be up to three months, which lets employees work longer in a busy month and less in a quiet one. If it is longer than one month, the agreement must be filed with the Labour Standards Inspection Office, and any month in which work averages more than 50 hours a week triggers overtime pay for that month.
Flextime does not remove overtime. Hours beyond the statutory total for the period are overtime, need a 36 Agreement and are paid at a premium. What it removes is the daily calculation.
What it means for a foreign employer
- You still have to track hours. Flextime is not an exemption. Employees need accurate time records, and unpaid overtime claims under flextime are common.
- It is the safest legal route to flexibility. For non-managers, flextime is far easier to implement correctly than the discretionary work system, which is limited to specified jobs.
- Candidates expect it in foreign companies. Many bilingual mid-career candidates see flextime with no core hours, plus some remote work, as standard at a foreign employer.
- Do not confuse it with no-overtime pay. Telling flextime staff they are "on salary" and owed nothing extra is a common, costly error.
Sources
- Labour Standards Act, Article 32-3, as amended by the Work Style Reform legislation (in force April 2019).
- Ministry of Health, Labour and Welfare, guidance on the flextime system.