The new exemption will apply to workers in "specialist roles" earning 10.75 million yen ($90,889) or more, according to a draft published on January 16 by the Ministry of Health, Labor and Welfare (MHLW). "Specialists" will include analysts, consultants, currency dealers, research and development personnel, financial product originators, and others, according to Ueno.
The average salary for a financial analyst in Tokyo is between 7.5-10 million yen ($63,454-$84,605), according to the 2015 Robert Walters Salary Survey. That's well above the average Japanese worker's annual income of $36,039, according to Organization of Economic Co-operation and Development figures.
Senior financial analysts are paid around a fifth more. But managers leave the labor union as they move up the ranks and are no longer eligible for overtime pay, according to Mizuho's Ueno.
Trojan horse or show piece?
"It's a Trojan Horse exemption that will be expanded over time to lower income workers," said Tokyo Managers' Union (TMU) committee chairman Takashi Suzuki.
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He tipped the expansion of deregulation on temporary employee contract laws for specific jobs in 1996 to manufacturing jobs generally by 2004 as a historical example. This enabled employers to obtain cheaper labor; temporary workers are paid less than permanent workers in Japan.
It's unclear if the revisions are even legal, he added. Promoting employees to mangers in title to avoid paying overtime was effectively ruled illegal after a court ordered McDonald's Japan to pay a store manager overtime wages in January 2008, he pointed out.
In fact, the framework of assessing the performance of "highly specialized" workers by results, rather than number of hours worked, already exists under current labor law and is pointless, the Labor Lawyers Association of Japan (LLAJ) pointed out in a statement released on January 23.
The real issue, according to the (LLAJ), is that the government and employers will seek to expand the category of workers who will not be eligible to be paid for overtime without bothering to change the law.
The LLAJ is "strongly opposing" the proposal because it will "only encourage longer working hours and seek to legalize overtime without pay".
That kind of resistance could stall further reforms.
"It is entirely feasible that reform momentum in the labor market will slow sharply as soon as this message about the symbolic smashing of the regulatory bedrock has been delivered to overseas market participants," Mizuho's Ueno said.
The government does not currently plan to expand the law or lower the income threshold, according to the MHLW official. But the Prime Minister has been vague; asked in parliament last June whether the no-overtime pay threshold could be lowered in the future Abe said he "didn't know," according to the LLAJ statement.