I currently work 40hr and any overtime is saved and taken back. Boss wants to switch to paid overtime. For some reason they are not offering to pay at 1.25 the hourly. Is this illegal? Everything I see says it has to be paid at 1.25 times over 8hrs a day or 40hrs a week.
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What does your contract say?
I think it’s pretty common for contracts in Japan to include the first 20 hours of overtime in “regular” hours (i.e. you don’t get paid extra until you hit 21 hours of OT).
This is probably “minashi zangyo”. It is annoyingly common.
You get an “overtime allowance” which covers a certain number of hours of overtime each week/month.
Even if you work no overtime, you get paid this. This essentially means you don’t get overtime pay for the 40 hours of overtime per month. But if you look at you paystubs, you will see 40 hours of overtime paid every month.
To accomplish this, the “salary” you are quoted is usually not actually your base salary; your base salary is 30% less than the quoted salary, and the difference is made up by the overtime allowance.
If you work for a good company, you won’t actually work overtime and get your full pay (charitably, it’s a method to discourage workers from doing overtime and even out the company’s expected expenses). But you can be disciplined if you don’t work overtime that you’re directed to that has a business purpose, so this really requires you trust your employer/manager.
I’m not sure whether or not you can be forced to accept a change to minashi zangyo though, since that would involve decreasing your base salary
We had “minashi zangyo” at my company when I first started, but within the first year, after seeing my payslips, I demanded that the salary I was offered be reflected as my base salary and the overtime allowance must be listed separately and paid on top of my base salary. We’re a small branch of an international company, so it wasn’t too hard to just scrap the whole plan and move to salary plus 1.25x rate for any actual overtime worked. I normally work no over time, but since they log hours by the minute, I get paid by the minute if I have to do anything at all past 8 hours in a day (technically 9 since lunch is an hour and we don’t clock out for that, the system just subtracts one hour no matter what)