Japan’s overtime pay in 2020 sees largest fall in 11 years

The average overtime pay in Japan last year showed a decline of 12.1% year-on-year to ¥17,352 (US$165), registering the sharpest drop in 11 years as the pandemic forced businesses to cut operating hours, government data showed. 

The speed of decline was the fastest since 2009, when the economic downturn caused by the global financial crisis led to a drop of overtime wages by 13.5%, according to data by the Ministry of Health, Labour and Welfare.

The average overtime pay fell by 33.5% among services like hair salons and the entertainment sector. Restaurant and hotel operators recorded a fall of 27.3% in overtime wages, while manufacturers suffered a 19.5% decline.

Last year, monthly overtime hours for all workers fell by 13.2% on average, marking the biggest decline since 2019, which fell by 15%.

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As COVID-19 hit service sectors badly, the number of part-timers made up 31.14% of the country’s workforce in 2020, falling 0.39 percentage points year-on-year, according to the government survey. This is also the first time the number of part-timers fell since the survey began in 1990, which covers workplaces with at least five workers.