Pre-approval Requirements for Overtime under Japanese Labour Law

1. Meaning of pre-approval for overtime

In Japan, an employer may establish an internal rule requiring employees to obtain advance approval from a supervisor before performing overtime. Such a system is commonly called an overtime approval or authorization system (zangyō kyoka-sei).

However, internal pre-approval and the statutory legality of overtime are separate issues.

Under Article 32 of the Labour Standards Act, the ordinary statutory working time is 8 hours per day and 40 hours per week. Where an employer requires work beyond those statutory limits, Article 36 generally requires a written 36 Agreement (Saburoku Kyōtei) with the majority union or majority employee representative and filing with the Labour Standards Inspection Office.

The current statutory framework also generally limits overtime under a 36 Agreement to 45 hours per month and 360 hours per year, subject to the statutory exceptional-case framework and additional limits.

Therefore:

A company may require prior approval, but simply saying “the employee did not obtain approval” does not automatically eliminate the employer's obligations under the Labour Standards Act.

The crucial question is whether the work was actually performed under the employer's direction or control and whether the applicable statutory requirements were satisfied.

2. Difference between the 36 Agreement and individual overtime approval

These concepts should not be confused.

The Ministry of Health, Labour and Welfare expressly explains that overtime beyond statutory hours requires a 36 Agreement and that overtime worked within the agreement's permitted scope attracts statutory premium pay.

3. Why employers use pre-approval requirements

A properly designed approval system can serve several legitimate purposes:

1. controlling excessive working hours;
2. identifying genuine business necessity;
3. preventing unnecessary overtime;
4. allocating work among employees;
5. monitoring compliance with the 36 Agreement;
6. controlling overtime budgets;
7. identifying employees approaching monthly or annual limits;
8. preventing unauthorized work;
9. improving working-time records; and
10. supporting health and safety management.

The Ministry's guidance emphasizes that overtime should be controlled within the statutory framework and that employers should monitor actual overtime rather than merely relying on formal agreements.

4. Does absence of prior approval mean that overtime pay is not payable?

Not necessarily.

Japanese courts have generally examined the substance of the working relationship, rather than allowing an employer to avoid overtime obligations merely through a formal approval rule.

The important question is whether the employee was actually working under the employer's direction or whether the employer knew, permitted, encouraged, or effectively required the overtime.

Thus, there are two contrasting situations.

Situation A — Genuine and strictly enforced approval system

Suppose:

• the work rules clearly prohibit unauthorized overtime;
• employees are instructed to leave at the end of scheduled hours;
• managers actually monitor compliance;
• employees are told to transfer unfinished work to supervisors;
• unauthorized overtime is promptly stopped; and
• the employer does not knowingly benefit from or tolerate the additional work.

A court may conclude that unauthorized work was not performed under the employer's direction.

Situation B — Approval rule exists only on paper

Suppose:

• the employee needs approval;
• the employee does not obtain it;
• but management knows that the employee is working late;
• the workload cannot realistically be completed during normal hours;
• supervisors give instructions requiring completion;
• managers regularly tolerate late work; or
• the company benefits from the work.

In that situation, the absence of formal approval is much less likely to protect the employer from an overtime claim.

5. Six important Japanese cases

Case 1 — 昭和観光事件 (Showa Kanko Case)

Osaka District Court, October 6, 2006

This is one of the most directly relevant cases concerning an advance overtime-approval requirement.

The employer's work rules required employees generally to obtain advance approval from the relevant supervisor before performing overtime.

The employer argued that only overtime that had received prior approval should count.

The court rejected that argument where the overtime was actually performed pursuant to an employer's work-related instruction. The court treated the approval provision primarily as a mechanism designed to prevent improper overtime claims, rather than as a provision automatically extinguishing an employee's overtime-pay entitlement whenever advance approval was missing.

Principle

Prior approval is an important management procedure, but it is not necessarily a legal condition precedent to overtime pay.

This is probably the most directly relevant case for a company's pre-approval policy.

Case 2 — ヒロセ電機事件 (Hirose Electric Case)

Tokyo District Court, May 22, 2013

This case involved a comparatively strict overtime-management system.

The work rules provided that overtime work was to be performed when ordered by the relevant supervisor, and the company's overtime-order documentation stated that overtime without the supervisor's order was not permitted.

The court considered the company's actual overtime-management system, including the overtime-order documentation and the manner in which overtime was recorded. The employee's claim based principally on building-entry and exit records was not accepted in the circumstances of that case.

Principle

A genuinely operated and documented overtime-order system can be important evidence that particular periods were not employer-directed working time.

But the case should not be read as establishing a universal rule that an employer can refuse overtime pay whenever an employee lacks advance approval.

Case 3 — 神代学園ミューズ音楽院事件

Tokyo High Court, March 30, 2005

This case involved explicit instructions prohibiting overtime.

The employer repeatedly instructed employees not to perform overtime and directed them to hand unfinished work to persons in managerial positions. The court found that the employer had actually implemented the prohibition and that the employees' subsequent work outside normal hours was not, in the circumstances, work performed under the employer's direction and control.

Principle

An employer has a stronger position where it can demonstrate:

• an explicit prohibition;
• repeated communication of the prohibition;
• practical enforcement;
• alternative arrangements for unfinished work; and
• absence of managerial tolerance of unauthorized overtime.

The case therefore demonstrates the difference between a real overtime-control system and a nominal rule.

Case 4 — 三菱重工業長崎造船所事件

Supreme Court, First Petty Bench, March 9, 2000

This is a fundamental Japanese Supreme Court authority on the concept of “working time.”

The Supreme Court held that whether time constitutes working time depends objectively on whether the employee was under the employer's direction and control. It is not determined solely by the wording of the employment contract, work rules, or labour agreement.

The case concerned activities such as changing into work clothing and preparing for work before the formal starting time.

Principle

A company cannot simply declare:

“This period is outside working hours.”

The actual circumstances matter.

This principle is highly relevant to overtime approval because a contractual or policy requirement for advance approval does not by itself determine whether actual work constitutes statutory working time.

Case 5 — 大星ビル管理事件 (Osēi Building Management Case)

Supreme Court, 1997

The case concerned employees who had overnight duties and periods described as “sleeping time.”

Although employees were not continuously performing active work, they were required to remain at the workplace and respond immediately if alarms or other incidents occurred.

The Supreme Court treated the relevant period as working time because the employees remained under the employer's direction and were not genuinely free from work obligations. The case is an important authority for the objective concept of working time.

Principle

Actual freedom from work obligations matters more than the label placed on the period.

Applied to overtime approval, an employer cannot necessarily avoid working-time consequences merely by describing unauthorized work as “personal” or “voluntary” if the employee was in reality required to remain available or perform employer-related duties.

Case 6 — 電通事件 (Dentsu Case)

Supreme Court, March 24, 2000

The Supreme Court considered an employee who performed extremely long overtime over an extended period. The company's system contemplated overtime reporting and permission, but in practice employees regularly performed very long hours, and the company was aware of the situation.

The Court recognized the employer's responsibility in circumstances where the employee was given extensive work, superiors were aware of excessive working hours, and adequate measures were not taken to reduce the workload.

Principle

An employer's actual knowledge and management of overtime are highly significant.

A formal permission system cannot safely be used as a substitute for actual working-time management.

The case is particularly important for modern employers because it demonstrates that overtime control is also connected with the employer's duty to protect employees from excessive working hours and health risks.

6. What these cases collectively establish

The cases reveal an important distinction:

Formal rule

“Employees must obtain advance approval before working overtime.”

versus

Actual legal situation

“Was the employee actually working under the employer's direction or control?”

The second question is often decisive.

A company therefore should not assume that an employee's failure to obtain approval automatically converts working time into non-working time.

7. Requirements for a legally robust pre-approval system

A Japanese employer should ideally include the following in its work rules.

A. Clear written rule

The rules should state:

• overtime requires advance approval;
• who may approve it;
• how approval is obtained;
• permissible reasons;
• maximum approval periods;
• emergency procedures; and
• post-work reporting requirements.

B. Emergency exception

The policy should provide a mechanism where advance approval is impossible because of:

• emergencies;
• system failures;
• accidents;
• urgent customer matters;
• safety incidents; or
• other unforeseeable circumstances.

Employees should be required to obtain prompt subsequent approval/reporting.

C. Actual enforcement

Managers should not tell employees:

“You need approval”

while simultaneously expecting them to finish impossible workloads after normal hours.

Management conduct must correspond with the written policy.

D. Workload management

If an employee repeatedly requests overtime because normal working hours are insufficient, management should investigate:

• staffing;
• workload;
• deadlines;
• productivity;
• managerial instructions;
• employee allocation; and
• whether overtime limits are approaching.

E. Accurate time records

Employers should maintain reliable records of:

• start time;
• finish time;
• breaks;
• overtime;
• holiday work;
• approval requests;
• approval/rejection;
• reasons for overtime; and
• actual hours worked.

An approval system should not be used to manipulate the actual working-time record.

8. Interaction with the 36 Agreement

The 36 Agreement is especially important.

Article 36 allows statutory overtime and holiday work within the framework of the agreement, after the required agreement with the majority union/representative and filing with the relevant authority.

The agreement should specify matters such as:

• reasons for overtime;
• categories of work;
• number of employees covered;
• maximum extension of working hours;
• relevant periods; and
• duration of the agreement. 

A company's internal approval process cannot expand the limits of its 36 Agreement.

For example:

36 Agreement permits overtime within specified limits + employee receives manager approval

does not mean:

manager approval permits unlimited overtime.

The employer must remain within the statutory framework.

9. Overtime pay

Where statutory overtime is performed, the employer generally must pay the statutory premium.

The Ministry currently states that:

• statutory overtime generally attracts at least 25% additional pay;
• statutory holiday work generally attracts at least 35%;
• late-night work between 10 p.m. and 5 a.m. attracts an additional 25%;
• overtime exceeding 60 hours in a month attracts a 50% or greater overtime premium. 

Thus, an internal rule saying:

“No approval = no overtime pay”

should not be treated as automatically decisive.

The legality depends on the actual circumstances and the nature of the work performed.

10. Employer's compliance checklist

A Japanese employer implementing pre-approval should maintain this structure:

11. Key legal distinction

The safest way to understand Japanese law is:

Pre-approval is primarily an internal control mechanism; it is not, by itself, a universal legal mechanism for erasing actual working time.

The strongest employer position arises where the company can prove that it:

1. had a clear written approval requirement;
2. communicated it to employees;
3. actually enforced it;
4. prohibited unauthorized overtime;
5. provided a mechanism for unfinished work;
6. did not knowingly tolerate unauthorized work;
7. accurately recorded actual working hours;
8. maintained an appropriate 36 Agreement; and
9. paid statutory overtime premiums whenever legally required.

Conversely, an employer faces greater risk where management knows employees are working overtime, gives them excessive workloads or deadlines, benefits from the work, and simply refuses payment because the formal approval box was not checked.

The six cases above—Showa Kanko, Hirose Electric, Kamishiro Gakuen/Muse Music Academy, Mitsubishi Heavy Industries Nagasaki Shipyard, Osēi Building Management, and Dentsu—illustrate the spectrum between a genuinely enforced overtime-control system and a nominal approval rule that does not reflect workplace reality.

Note: The case-law discussion is based on Japanese labour-law authorities; case names are given without external links as requested.