Hours beyond eight a day or 40 a week are overtime and must be paid at a premium. The legal minimums under Article 37 are 25% for ordinary overtime, rising to 50% for overtime beyond 60 hours in a month, 35% for work on the statutory weekly day off, and 25% for work between 10pm and 5am. They stack: late-night overtime beyond 60 hours is paid at 75%. The 50% band applied only to large employers from 2010; smaller employers came in from April 2023.
The premium is calculated on hourly base pay, which includes most allowances. Only a closed list can be excluded, including family, commuting and housing allowances paid according to need, and bonuses. A 36 Agreement must be in place before any overtime is lawful, but even unlawful overtime must be paid.
Claims for unpaid overtime can go back three years. This limit was extended from two years in April 2020, with a longer five-year period set as the eventual goal.
What it means for a foreign employer
- Unpaid overtime is a classic exposure. Three years of back pay across a team, plus a matching surcharge a court can award, adds up quickly. Labour inspectors look for it.
- Track hours for everyone. Employers must objectively record working time, including for managers, whose hours matter for health checks even when no overtime is due.
- Managers still get the late-night premium. The supervisory exemption removes overtime and holiday premiums, not the 25% for night work.
- Price it into junior roles. For non-managers in demanding functions, overtime can be a meaningful share of annual pay. See nenshu.
Sources
- Labour Standards Act, Articles 37, 114 and 115, and Supplementary Provisions (2020 amendment on limitation periods).
- Ordinance on the minimum rate of premium wages; Labour Standards Act Enforcement Ordinance, Article 21.
- Industrial Safety and Health Act, Article 66-8-3 (recording working hours).
- Ministry of Health, Labour and Welfare, guidance on the April 2023 extension of the 50% rate to small and medium-sized employers.