Black Companies : Exploitative Workplaces in Japan (Part 1)

The Rise of the Black Company Term

The term "black company" emerged on internet forums in the 2000s and gained widespread attention in 2013 when the MHLW began targeting companies suspected of exploiting young workers with long hours and harassment. That same year, "black company" was selected as one of the top ten buzzwords in the New Words and Buzzwords Awards.

Related Article: All the Different Hara’s (Harassment) in Japan

Specific Characteristics of Black Companies

Long and Harsh Working Hours

• Legal Standard: The Labor Standards Act sets the statutory working hours at 8 hours per day and 40 hours per week. Any overtime requires a 36 Agreement (サブロク協定) and must be reported to the Labor Standards Inspection Office.
• Black Company Practices: Ignoring these regulations, employees are subjected to excessive working hours without proper overtime compensation.

Denial of Holidays and Paid Leave

• Legal Standard: Employees are entitled to at least one day off per week and annual paid leave.
• Black Company Practices: Workers may be denied their legal holidays and discouraged or prevented from taking paid leave.

Low or Unpaid Wages, Exploitation of Passion, and Focus on Mental Toughness

• Legal Standard: Employers must pay at least the minimum wage and appropriate overtime pay（note that minimum wage differs by region).
• Black Company Practices: Employees are often paid below minimum wage due to unpaid overtime, and promotions do not correspond with adequate pay increases. Companies may exploit employees' passion and loyalty to enforce long hours for low pay, often emphasizing mental toughness over concrete improvements in working conditions.

Lack of Overtime Pay and Prevalence of Unpaid Overtime

• Legal Standard: Companies must accurately track and compensate for all working hours.
• Black Company Practices: They may falsify records to avoid paying overtime, leading to unpaid work. Fixed overtime pay might not reflect actual hours worked, especially for those not classified as genuine managerial positions.

Inappropriate Employment Contracts

• Legal Standard: Clear disclosure of labor conditions and adherence to labor laws are mandatory when forming employment contracts.
• Black Company Practices: Contracts might include unfair or unusual terms, often to the employee's disadvantage.

Warning Signs

• High turnover rate: High turnover and absenteeism rates are common in black companies, with over 30% of employees leaving within three years being a notable sign.
• Vague Job Descriptions: Job postings lacking specific details about responsibilities and benefits may indicate a black company.
• Absolute Authority of Superiors: Overemphasis on superiors' opinions, with no room for employee feedback.
• Frequent Harassment: Labor laws require measures to prevent workplace harassment, but black companies fail to comply, leading to frequent instances of workplace harassment.
• Excessive Working Hours: Job postings should clearly state working hours and the average monthly overtime.
• Company Environment: During interviews, observe the company's atmosphere and the behavior of current employees.
  
• Inappropriate Pay Structures: Be wary of overly high salaries or reliance on fixed overtime pay. 
  • High salaries can come with hidden expectations of excessive workloads, long hours, or high-pressure environments. In addition, companies facing a high turnover rate may use high pay as a short-term solution to attract employees without addressing underlying issues. Finally, unusually high salaries may come with a catch, such as limited job security, where the company can easily terminate employees if they don't meet unrealistic performance targets.
  • Employers might rely on fixed overtime pay to push employees to work excessive hours without additional compensation, leading to burnout and decreased job satisfaction.