Nakagawa Cautious On Relaxing Wage-Hour Regulations

Sunday, January 7, 2007

Nakagawa Cautious On Relaxing Wage-Hour Regulations

TOKYO (Kyodo)–Liberal Democratic Party Secretary General Hidenao Nakagawa on Sunday expressed caution over the introduction of a labor system that exempts ”white-collar” employees from current work-hour and overtime pay regulations, suggesting it should take place after Japan’s economy pulls out of deflation.

”The introduction would be most appropriate when the economy has entered a phase in which the nominal growth rate exceeds the real one in a sustainable manner,” Nakagawa said in an NHK TV program, referring to the definition of the economy freeing itself from deflation.

As the New Komeito party, the LDP’s ruling coalition partner, is also reluctant to introduce the so-called white-collar exemption, Nakagawa’s remarks have made it difficult for the government to submit the related bills to the Diet before the House of Councillors election this summer.

Under the system, people immediately below the supervisory level with an annual salary above a certain level will have discretion over their working hours but will not receive overtime pay.

Nakagawa emphasized the need for both the government and employers to step up efforts to dispel public concern that the system will lead to prolonged working hours.

”The system should be welcomed by salaried workers and their families because it gives the workers more time to be at home” if it is implemented properly, Nakagawa said. ”Both management and the government have failed to fulfill their responsibility of fully explaining the system.”

Nakagawa proposed that the government should comprehensively review the nation’s labor-related legal system while adopting the white collar exemption system.

”The minimum wage and payment rates for overtime might have to be raised when the system is introduced,” he said.

A governmental advisory panel in December proposed introducing the system under which white-collar workers would be exempt from the Labor Standards Act that basically limits a person’s working hours to eight hours a day and 40 hours a week, and obliges employers to give extra pay for overtime.

Panel members representing labor unions are opposed to the introduction.

The proposal has led to calls for caution even within the ruling coalition as it is seeking support from salaried workers in nationwide local elections in spring and in the upper house election.