Fixed overtime pay (minashi zangyou) is not inherently illegal but must meet court-established requirements (Tech Japan case, Supreme Court 2012.3.8): (1) Clear separation between base pay and fixed overtime component, (2) payment genuinely for overtime work, (3) obligation to pay excess beyond fixed hours. Invalid patterns: no base/overtime distinction, refusal to pay excess, 80+ fixed hours (exceeds Art. 36 agreement limits of 45 hours). Underpaid overtime calculation: actual hours minus fixed hours × overtime premium rate (25% weekday, 50% night, 35% holiday under Labor Standards Act Art. 37). Statute of limitations: 3 years (Art. 115, 2020 reform from prior 2 years).
Fixed Overtime Pay in Japan: Validity Requirements and Underpaid Overtime Claims
Key Takeaways
- ✓Fixed overtime pay is invalid if not clearly separated from base salary
- ✓Overtime exceeding the fixed hours must be paid separately
- ✓Invalid fixed overtime pay becomes part of the overtime calculation base
- ✓Job listings stating "includes deemed overtime" require careful scrutiny
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