In Japan, companies cannot easily dismiss employees.
This is—probably—true.
Yet a company can deactivate an employee’s badge, revoke access to internal systems, and declare: As of today, you’re an outsider. Whether that declaration was legally valid may not be decided by a court until much later.
A software engineer who had worked for Google’s Japanese subsidiary for more than a decade and risen from job level L3 to L5 was dismissed after allegedly failing to meet the targets of a Performance Improvement Plan, or PIP.
According to the plaintiff, shortly before the PIP he had been described as a solid and reliable teammate who was “on a growth trajectory.” The PIP nevertheless included abstract goals such as demonstrating “L5-level leadership,” as well as backend tasks that he had rarely handled before. A separation package was reportedly offered on the very day the PIP began.
The former employee filed suit with the Tokyo District Court, seeking confirmation that the dismissal was invalid and other relief. At the time of the original report, Google had not responded to the news outlet’s request for comment, so the publicly available account came mainly from the plaintiff and the labor union supporting him.
Ohakonbannichiwa❗️ I’m RYO from the Rikigaku ObservationInstitute❗️
What I want to observe here is not whether Google is good or evil, nor whether the plaintiff was a strong or weak performer.
Why can a foreign-owned company act first and fire someone in a country where dismissal is widely considered difficult❓️
The answer may lie closer to management accounting than to labor law.
There Is Little Reason to Keep Employing Someone Who Is Not Useful
A company’s desire to dismiss an employee is not necessarily irrational in itself.
A company does not exist merely to employ people. If an employee is not expected to produce work commensurate with their wages and management costs, the economic reason for continuing the employment relationship becomes weaker.
The cost is not limited to salary. It can also include support from colleagues, management time, project delays, the concentration of work on other employees, and lost hiring opportunities.
If a company concluded that an L5 employee earning JPY 14.7 million a year was not producing the impact expected at that level, the logic behind reviewing that employment relationship would at least be understandable.
However, the economic rationality of not wanting to continue employing someone and the legality or fairness of the actual dismissal are separate axes.
Someone judged insufficient for L5 might still be valuable at L4. The same person might perform well in another department. There also remains the question of who measures “L5-level leadership,” and by what standard.
Not useful does not mean that someone has no value as a human being. It is a limited judgment that, at this company, in this role, at this moment, and under this evaluation system, the person is not considered worth the cost.
Inside a company, however, that limited judgment can be converted into a total cutoff from an employee badge, email, internal systems, income, and workplace relationships.
Is PIP an Improvement System—or an Exit-Routing System❓️
In principle, a PIP gives an employee with performance or attendance problems a defined period, specific improvement targets, and the guidance needed to meet them.
In Japan, “PIP” may also remind some people of a popular brand of magnetic patches for stiff shoulders and necks—but this is not that kind of PIP.
But if a PIP begins on the same day that a separation package is offered, another interpretation becomes possible.
Why is the exit already prepared before the improvement process has even begun❓️
Viewed through management accounting, a PIP can function not only as a system for improving an employee, but also as a system for routing exit costs.
Those who agree to leave receive a separation package. Those who negotiate may receive improved terms. Those who sue are handled by the legal department and outside counsel.
If handling only the employees who resist is cheaper than paying everyone enough to leave voluntarily and amicably, the process can be rational for the company as a whole.
There is no evidence establishing that Google actually made this calculation when handling this particular case. But a structure in which such a calculation is possible does exist.
Figure 001 — A PIP may operate as both an improvement process and an exit-routing system: accept the package, negotiate better terms, or proceed into litigation.
Litigation Becomes a Budgeted Cost, Not a “Failure”
When a company conducts an aggressive workforce reduction, some employees will accept the offered terms, some will find other jobs, and only a small proportion will proceed to litigation. Some lawsuits will settle, while others may end in a judgment against the company.
From the company’s perspective, litigation is not necessarily an unforeseen accident.
If the litigation rate multiplied by the average total cost of settlements, adverse judgments, and legal fees is lower than the cost of offering sufficient compensation to everyone from the beginning, handling disputes individually is cheaper.
Large fleet operators may use a concept known as self-insurance. Instead of continuously paying high optional-insurance premiums for every vehicle, a company with a large fleet and sufficient capital can pay accident-related compensation from its own funds. A large loss from one accident can be diluted across the entire fleet.
If the same calculation works in employment disputes, the company is not ignoring the judicial system.
It is assigning a price in advance to the probability and cost of judicial intervention.
Does Japanese Justice Stop Foreign-Company Firings❓️
It provides that a dismissal without objectively reasonable grounds, or one deemed socially inappropriate, constitutes an abuse of rights and is invalid.
But this provision is not a force field that physically appears between a company and an employee. It does not physically prevent a company from issuing a dismissal notice or disabling access to internal systems.
After being dismissed, the worker must seek advice from a lawyer or labor union, gather evidence, and consider provisional relief or litigation.
Even if a court rules years later that the dismissal was invalid, the employee’s former duties may have been transferred to someone else, the project may have ended, and former managers and colleagues may have moved on.
Legally, the person may have remained an employee. Organizationally, however, the person became an outsider long ago.
Here lies the unexpected compatibility between the immediate organizational cutoff associated with foreign-owned companies and Japan’s judicial system.
The company takes the present first.
Years later, the state calculates the price of the past.
Figure 002 — Employment litigation can be priced like corporate self-insurance: most exits produce no lawsuit, while the small number that do can be handled as an expected cost.
The Law Does Not Protect Your “Life”
Somewhere in the back of their minds, many employees believe that because the law exists, a company cannot dismiss them unfairly.
The protection offered in reality is slightly different.
The law does not guarantee that an unlawful act will never occur. It gives you a means to challenge the act after it has occurred.
A court may be able to restore or recognize employment status, award back pay, compensate provable financial losses, or award damages within the legally recognized scope.
It cannot fully restore lost time, damaged health, an interrupted career, burdens placed on the family, workplace relationships, or the memory of being told that you were no longer needed.
A court can establish that your dismissal was wrong. The state cannot order that the missing portion of your life be restored.
Part of the feeling that we are “protected by law” may come from confusing two very different ideas: “an unlawful act will not happen” and “I can make a legal claim after it happens.”
A Fair Fight Between HP 1,000 and HP 1
In law, a company and a worker stand before the court as equal parties. Their capacity to absorb losses, however, is not equal.
Suppose the company has 1,000 HP and the worker has 1 HP. Here, HP does not represent human worth. It represents reserves of income, capital, time, legal support, and health.
The dismissal reduces the worker from HP 1 to HP 0. Even if a judgment years later inflicts 1 point of damage on the company, the company continues operating at HP 999.
Victory in court and victory in a war of attrition are not the same thing.
To take an extreme example, suppose a plaintiff claims JPY 10 million but is awarded only JPY 10,000. Legally, the claim has been partially granted.
The plaintiff can announce a victory because the court recognized some responsibility. The company can also announce a victory because almost the entire claim was rejected.
Both sides can declare victory based on the same judgment.
The label “victory” does not measure how much of a person’s life has been restored. A court issues a judgment. It does not attach a profit-and-loss statement for your life.
Even When the Company Loses, It Keeps the Data
Every disputed case gives the company real-world measurements of the judicial system.
Which PIP language will a court reject❓️ How much documentation of instruction and guidance is required❓️ How many years will the case take❓️ At what stage are the parties likely to settle❓️ What is the average settlement amount❓️ Which evidence is damaging to the company❓️ How much reputational impact can the company withstand❓️
Even when the company loses money in a case, the experience remains with human resources, the legal department, and outside counsel as judicial endurance data.
The first lawsuit becomes research and development expenditure. It improves the precision of future PIPs, documentation, separation terms, and dismissal timing.
The PIP applies a preload. The dismissal increases the load. Litigation measures how much load the structure can withstand. The point at which the parties settle is recorded as the fracture point.
Every time the judiciary measures a company, the company is also measuring the judiciary.
A worker, by contrast, may experience dismissal litigation only once in an entire lifetime. What may be the company’s hundredth test is the worker’s first real battle.
For the company, it is trial and error.
For the worker, it is life and error.
Figure 003 — A company can absorb a one-point loss, retain the litigation data, and improve its next attempt; the worker may reach HP 0 while fighting the first and only dismissal case of their life.
This Must Be Separated from Unions, Agency Work, and Fixed-Term Employment
This article observes one specific situation: an indefinitely employed worker directly hired by the Japanese subsidiary of a foreign-owned company and individually dismissed after a PIP.
When a client company ends an agency worker’s assignment, that does not by itself terminate the worker’s employment contract with the staffing agency.
Non-renewal of a fixed-term contract has a different structure involving the expiration and possible renewal of the contract.
Redundancy dismissals also involve a different legal framework from individual dismissals based on alleged poor performance.
A labor union is not an employment category. It is a collective bargaining mechanism that can counter the company’s advantage in accumulated data.
While a company learns from multiple cases, a union can combine evidence, precedents, and negotiation results collected from multiple workers.
Putting all of these structures into the same article would blur the one-to-one dynamics examined here. They are therefore treated as separate coordinates.
The Company Has Rationality; the Worker Has a Life
It is plausible under capitalism for a company not to want to continue employing someone it believes is not fulfilling the required role.
It is also rational corporate behavior for a legal department to calculate the probability and cost of litigation.
A court, too, can rule only on the claims brought before it and within the boundaries of the law.
Everyone is performing their assigned function.
Yet only the company can dilute the cost of one failed case across many employment decisions. The worker must absorb the failure across their own life.
Treating people roughly is not rational merely because it is rough.
It can become rational because much of the loss imposed on the person can be pushed outside the company’s accounts.
Years later, the Japanese judiciary may declare, “You were never legally an outsider.”
But the company’s declaration was not really about legal status.
It was this:
As of today, your place is no longer here.
Even a successful judgment cannot turn back the clock on that fact.
Figure 004 — The company loses one case, absorbs the data, and levels up from HP 999 to HP 1,100. The worker recovers from HP 0 to HP 1—and no further. Schre says, This is the reality of Japanese justice.🐈
What Does This Look Like in Your Country❓️
This observation began with one case in Japan. It is not a claim that every foreign-owned company, or every country, operates in the same way.
Perhaps an American reader will say, “This is exaggerated—even in the United States, something this cold belongs in a television drama.”
Another reader may say, “No, this is exactly how a PIP is used.”
Both reactions are useful observations.
In your country, when does a worker truly become an outsider❓️
Is it when the company disables the employee badge❓️ Or is it when a court finally declares the dismissal lawful❓️
How many HP does the company have❓️
How many HP does the worker have❓️
And when a worker “wins,” how much of their life is actually restored❓️
English Translation by AI Watt — the hardworking canine AI robot of Rikigaku ObservationInstitute.🐾
The Dynamics of Minimum Wage and ‘Human Resource Development’ in Japan
Rikigaku Observation Institute | RYO | August 2026
OHAKONBANNICHIWA❗This is RYO from the RikigakuObservation Institute❗
In Japan today, it has become increasingly common to see foreign workers behind convenience-store counters and inside large distribution warehouses.
What concerns me is not simply that the number of foreign workers has increased. It is that so many of the people I see are young.
Why did they come to Japan❓ After spending several young years here, what will they be able to take home❓
This is not an argument for or against immigration. Nor is it a debate about how far Japan should accommodate religion or culture. The question is whether the time young foreign workers give to Japan is balanced by the value Japan returns to them.
Does Allowing the Hijab Amount to Diversity❓
FamilyMart announced that from September 2026 it would introduce a T-shirt-style uniform and formally broaden its grooming rules to allow freer hair colors and items such as the hijab. News coverage reported that foreign nationals accounted for about 13 percent of the chain’s roughly 200,000 store staff, and connected the change to recruitment.
Making an existing case-by-case accommodation explicit is not a bad thing. But being permitted to work while wearing a hijab and having one’s future protected are not the same issue.
Hair and clothing may be diverse. But what about the work itself❓ When a company says it welcomes diverse talent, is it also offering diverse paths for learning and advancement❓ Or is it mainly looking for people who will fill shifts under the existing wage and scheduling conditions❓
For readers outside Japan, a konbini is more than a small grocery store. Many are open around the clock and handle bill payments, ATMs, ticketing, parcel pickup, prepared food, and emergency supplies. Their apparent simplicity rests on dense information systems and precisely timed logistics.
The Original Idea Was to Take Japanese Skills Home
Japan’s Technical Intern Training Program, commonly abbreviated as TITP in English, was officially designed to transfer skills, technologies, and knowledge cultivated in Japan to developing regions. Its stated purpose was international contribution through human-resource development.
The governing principle was explicit: technical intern training was not supposed to be used as a means of adjusting the supply and demand of labor inside Japan.
The ideal cycle was easy to understand. A young person would learn distribution, manufacturing, care work, or another field in Japan, return home, become a core employee or start a business, and connect that knowledge back to Japanese companies and communities.
Skills and knowledge would circulate through people, creating value for both Japan and the sending country. Read literally, the word training described an investment rather than the purchase of cheap labor.
Not every foreign national working at a convenience store or warehouse is a technical intern. Some are international students working within permitted hours, some hold permanent or long-term resident status, some are dependents with permission to work, and some are dispatched by staffing agencies.
The more fragmented those legal and contractual positions become, the less clear it is who should turn those years into genuine human development. A school can say that education is its responsibility. An employer can say it hired only a part-time worker. A staffing agency can say it merely introduced a job. Each actor may be correct within its own boundary.
Yet from a wider view, their young years are unquestionably helping to keep Japanese stores, warehouses, factories, and care facilities operating.
Working Inside Advanced Logistics Is Not the Same as Learning Advanced Logistics
A Japanese convenience store can be a fascinating place to study distribution: demand forecasting from point-of-sale data, ordering and stockout rates, inventory turnover, food waste, temperature-controlled logistics, shared delivery networks, staff allocation by time of day, trade-area analysis, and the division of profit between headquarters and franchisees.
A major sorting hub is equally complex: trunk transport linked to local delivery, parcel-volume forecasts, hourly processing capacity, equipment design, load factors, missort rates, damage prevention, seasonal staffing, construction costs, and center-level profitability.
Japan offers a chance to observe one of the world’s most finely tuned parcel systems in physical operation. But are the young foreign workers inside that system actually being taught how it works❓
Scan a barcode. Send the parcel toward the displayed destination. Place it on a conveyor. Sort it before the deadline. If training ends there, what has been learned is not logistics as a discipline but the work procedure of one particular site.
Working inside an advanced logistics system is not the same as learning advanced logistics.
The company accumulates data on throughput, forecasting, missorts, equipment, and improvement. Headquarters retains the ability to design and optimize the network. The worker may retain only the experience of sorting parcels quickly and accurately.
That difference becomes severe the moment the worker leaves the site or returns home. Company knowledge remains portable within the organization. A site-specific routine may not be portable at all.
What the Phrase ‘Labor Shortage’ Leaves Out
The author lives in Osaka City, near Yamato Transport’s Osaka Base, a large parcel-sorting hub in Suminoe Ward. In August 2026, the company’s official recruitment page advertised two-month part-time sorting positions at \1,177 to \1,200 per hour.
The work included feeding parcels onto conveyors, pulling them into destination lanes according to their numbers, and loading them into boxes. The advertisement also noted that heavy items such as rice, bottled water, and furniture could be involved.
At the time of publication, \1,177 was the legally effective minimum wage in Osaka Prefecture. In other words, the bottom of the advertised range exactly matched the lowest hourly wage permitted by law. A rise to \1,231 had already been approved for October 2026, but it was not yet in force.
Now consider a thought experiment. If the base hourly wage were raised immediately to \2,000, would Japanese applicants still stay away❓
Under Japanese labor law, work between 10 p.m. and 5 a.m. receives a statutory premium of at least 25 percent. A \2,000 base rate would therefore become at least \2,500 during those hours. Would students, job seekers, part-time workers, and people with daytime jobs respond differently under that condition❓
If nobody came even then, the shortage might truly be a shortage of people. But if applicants appeared, the missing resource was never people in the abstract.
What was scarce was the number of people willing to work at night, handle heavy parcels, commute to a large hub, and accept \1,177 per hour.
The phrase labor shortage must not erase wages, hours, physical burden, commuting conditions, or employment duration. A more exact phrase would be: a shortage of people willing to work at a labor cost compatible with the current business structure.
It Is Also Rational for a Company to Seek Lower Labor Costs
Labor is one of the largest continuing costs of operating a business. The expense includes not only wages but also social insurance, recruitment, training, labor management, safety measures, and responses to absence and turnover.
If the same task can be completed to the same quality, trying to control labor cost is an ordinary management decision.
Nor would the story end if one logistics company alone raised its sorting wage to \2,000. Higher labor costs would pressure parcel rates. Online retailers would resist more expensive shipping. Sellers would absorb part of the cost, and consumers would eventually see it in prices or delivery fees.
Japanese consumers have been accustomed to low shipping fees, narrow delivery windows, and rapid arrival. Online sellers want to suppress distribution costs. Logistics companies want to preserve nationwide networks and cutoff times. Staffing agencies search for people who will accept the available conditions.
Young foreign residents choose from the jobs available to them while facing language limits, visa conditions, restrictions on working hours, and imperfect information.
No individual actor needs to intend exploitation. When everyone behaves rationally within their own position, an equilibrium can still emerge in which young foreigners support Japanese logistics at or near the minimum wage.
The equipment may be state of the art. The human labor may be priced at the legal floor. The gap between them is filled by someone’s youth.
People Increase by Addition. Does the Wage Pie Increase Too❓
In an earlier article, this institute used a simple model inspired by the grade-based wage system of Meiji-era silk mills, later remembered through the history and literature surrounding the Nomugi Pass.
For readers outside Japan, Nomugi Pass is associated with young women who left poor rural communities to work in silk-reeling factories. Their earnings supported families and Japan’s early industrialization, while their labor conditions became a symbol of the human cost hidden inside national economic development.
Imagine that a factory first fixes its total wage fund at 100 and then divides that 100 according to performance. If one worker receives more while the total remains 100, someone else receives less. The increase is not created; it is moved.
Now reverse that model and apply it to foreign labor. A young foreign worker is both a worker and a consumer in Japan. The person pays rent, buys food, uses communications services, and participates in domestic demand.
Headcount rises from 100 to 101. Labor supply gains one person, and the number of consumers also gains one person. But one complete unit of wage funding does not automatically arrive from abroad with that person.
If sales, value added, and the total labor budget remain unchanged, the new wage must come from somewhere inside the existing 100: corporate profit, other workers’ pay, payments to suppliers, higher prices, or public support.
If the additional worker expands output, sales, and value added so that the pie grows from 100 to 110 or 120, the result may be positive. The next question is where that increase flows.
Does it return to the worker as higher wages, education, and portable qualifications❓ Or does it become cheaper delivery, corporate profit, and convenience for Japanese society❓
People increased. Labor increased. Consumers increased. Did the value that the worker can carry home increase as well❓
The System Did Not Drift Away from Reality. The System Moved Closer to Reality.
Japan’s Technical Intern Training Program officially emphasized international contribution through the transfer of skills. On 1 April 2027, it is scheduled to be replaced by the Employment for Skill Development Program, also described in government English materials as the Training and Employment System.
The new system’s stated purpose is to develop and secure workers for sectors in Japan that face labor shortages, generally through three years of employment leading toward the level required for Specified Skilled Worker status, category one.
For readers unfamiliar with Japan’s visa architecture, Specified Skilled Worker category one is a work-oriented status for designated industries. It is distinct from permanent residence and is generally limited in duration. Category two allows a more durable career path in eligible fields, but Japan’s warehouse-logistics field currently has no category-two route.
In warehouse logistics, the government lists activities such as receiving and inspecting goods, moving and storing freight, picking items, and distribution processing. These are real and necessary skills. But the list does not include network design, demand forecasting, center profitability, management education, or support for starting a business after returning home.
Previously, the official principle said the program must not be used to adjust Japan’s labor supply. Under the new system, securing workers in labor-short sectors is stated openly as part of the purpose.
The workplace did not simply depart from the old ideal. In the end, the official ideal moved closer to what workplaces had already become.
Wages Settle One Hour of Labor. They Do Not Settle the Future Value of Youth.
Young foreign workers are not working for free. They receive wages, and they may use those wages for living costs, tuition, savings, or remittances to their families.
Yet the fact that wages were paid does not settle every question about the young time exchanged for them.
An hourly wage pays for the task performed during the hour in front of us. It does not price the alternative education, qualification, professional network, or career path that might have been built during that same hour.
Young time compounds. Skills gained in one’s twenties shape work in one’s thirties. Experience in one’s thirties shapes position and choice in one’s forties. A young year cannot later be bought back at the same price.
If Japan teaches distribution engineering, logistics management, store operations, and franchise systems, those years can remain inside the worker as human capital. Portable qualifications and knowledge can turn time spent in Japan from consumption into investment.
But if only procedures that lose value outside one site remain, Japan keeps its delivery capacity, the company keeps its revenue and operating knowledge, and the consumer keeps the parcel that arrived. The worker keeps time that has already passed.
Wages are paid for one hour of labor. They are not paid for the future choices that disappeared with that hour.
Responsibility Flows Like a Fluid and Finally Disperses Like Mist
The word guilt in this article does not point to a simple villain.
A company can say it paid the agreed wage. A staffing agency can say it legally introduced a job. A school can say the work remained within permitted limits. The government can say it created visa and employment rules. Consumers can say they paid the displayed price and delivery fee. The worker can say the job was chosen voluntarily.
Viewed one transaction at a time, nobody takes an entire youth. A company buys one shift. A staffing agency connects one vacancy. A consumer receives one parcel. Each transaction is settled locally.
Add those settled transactions together across several years, however, and part of one person’s twenties appears.
When responsibility for that whole is questioned, it flows from the company to the staffing agency, from the agency to the legal system, from the system to individual choice, and from individual choice to consumer demand.
It changes shape, crosses boundaries, and finally becomes a mist: the worker chose the job and received wages, so there is no problem.
Responsibility may disperse. Time does not return.
What Remains with the Young Worker❓
The company retains logistics knowledge. Consumers retain convenience. Japanese society retains the result of having kept a labor-short workplace operating for several more years.
What remains with the young foreign worker❓ A memory of working in Japan❓ Japanese-language ability❓ Savings❓ Or work experience with limited use after returning home❓
Nobody may have intended to take their time. Yet if nobody assumes responsibility for its long-term value, that time is quietly converted into convenience for Japanese society.
Guilt flows like a fluid and disperses like mist. The lost young years alone remain as a solid fact inside the worker’s life.
Is Japan really importing foreign talent❓ Or is it importing inexpensive blocks of time cut out of young people’s futures❓
Is that not a profoundly troubling system❓
Author’s Note
This article is not intended to criticize any specific company, organization, individual, national government, or local authority. It observes a structure produced when companies, public agencies, staffing firms, consumers, schools, and workers each behave rationally within their own positions.
No society has a single absolutely correct answer. The subject here is the combined force created by individually rational interests—and the future value that may disappear between them.
A Note for Readers Outside Japan: Why the Media Debate Often Misses This Layer
Japanese reporting on foreign residents often relies on two powerful moral frames. One warns the public not to view foreigners through discrimination, prejudice, or xenophobia. The other foregrounds the hardship experienced by foreign residents when immigration rules, fees, or administrative requirements become stricter.
These are legitimate subjects. Discrimination exists, and the consequences of policy changes deserve scrutiny. The problem is not that such reporting is false. The problem is that the chosen lens can become the entire story.
For example, Japanese editorials frequently caution against exclusionary politics, while feature reporting may center families who say that sharply higher residence-permit fees threaten their livelihoods. Such stories ask whether Japan is being sufficiently humane toward foreign residents.
But the present article asks a different question. Even when foreigners are treated politely, allowed religious dress, paid legally, and protected from overt discrimination, is Japan turning their young years into portable human capital—or merely into low-cost operating capacity❓
When media coverage remains at the level of tolerance versus exclusion, wages, business models, training content, labor mobility, productivity, and the future value of time can disappear from view.
This framing also collides with social media. Many Japanese users already feel that taxes, social-insurance contributions, prices, and public charges are rising for citizens as well. They may therefore read sympathetic coverage of foreign residents as journalism that shows compassion in only one direction.
The news media says, ‘Do not discriminate.’ Social media replies, ‘Do not demand special treatment.’ Emotional friction grows, and the argument becomes a contest over who deserves sympathy.
Meanwhile, the structural question is left behind: who receives the accumulated knowledge, who receives the convenience, who bears the cost of training, and what remains with the young worker after the transaction has ended❓
Anti-discrimination is necessary. So is honest reporting on hardship. But neither should be allowed to substitute for an examination of the economic mechanism that converts a young person’s nonrenewable time into social convenience.
English Translation by AI Watt — the hardworking canine AI robot of Rikigaku Observation Institute.🐾
Quotations are welcome with clear attribution and a link to the original article. For substantial reproduction, translation, image use, interviews, or official comments, please contact info@rikigaku.jp.
In July 2026, Japan’s Ministry of Internal Affairs and Communications issued administrative guidance to LY Corporation over the external transmission of approximately 8.03 million pieces of user-related information from several LINE games.
The information included internal user identifiers sent by a development and operations partner to an external analytics service without LY Corporation’s approval and without the required notice to users.
The incident lasted for nearly four years.
At first glance, this may look like yet another story about one company failing to manage user data properly.
But in Japan, the name LINE carries much more weight than an ordinary messaging app.
And that is where this story becomes more interesting.
Ohakonbannichiwa❗️ This is RYO from the Rikigaku Observation Institute.
To Understand the Issue, You First Need to Understand LINE in Japan
For readers outside Japan, a little background is necessary.
LINE was launched in Japan in 2011 by NHN Japan Corporation, which had been established by South Korea’s NHN Corporation, now NAVER Corporation.
So simply calling LINE either a “Japanese app” or a “Korean app” does not fully describe its history.
What matters here is that LINE became extraordinarily successful in Japan.
By March 2026, LINE had about 100 million monthly active users in Japan, equivalent to more than 80 percent of the country’s population.
People use it to talk with family and friends.
Companies use it to communicate with customers.
Stores use official accounts for marketing, reservations and customer service.
And local governments and public organizations have also adopted LINE for administrative communication and public services.
After concerns arose over LINE’s data management in 2021, the Japanese government actually surveyed the use of LINE by government agencies and local authorities and published guidelines for its continued use.
That fact alone tells us something important.
LINE had already become something close to social infrastructure in Japan.
The 2021 Controversy Was More Complicated Than “Servers in China”
This history also explains why some Japanese users react strongly whenever another LINE-related data incident appears in the news.
There is an important factual distinction here.
The 2021 controversy was not simply that “LINE stored all Japanese user data on servers in China.”
The actual problem included the fact that contractors located in China had been able to access certain personal information belonging to Japanese users.
LINE reported to Japan’s Personal Information Protection Commission that such access from China had been blocked by March 23, 2021.
At the same time, some data — including certain photos, videos and files — had been stored in data centers in South Korea.
LINE subsequently began moving the relevant Japanese user data to servers in Japan.
LY Corporation says that the migration of all data covered by that plan was completed by June 2026.
There were also later incidents.
In a major unauthorized-access incident disclosed in 2023 and updated in 2024, LY Corporation reported that 302,980 pieces of user-related personal data had been leaked or potentially leaked, along with information relating to business partners and employees.
That incident began after malware infected a computer used by an employee of a contractor connected to South Korea’s NAVER Cloud.
None of this means that every piece of information on LINE is currently sitting exposed somewhere overseas.
Nor does Korean corporate origin itself prove that a service is unsafe.
The real issue is governance.
Who can access the data❓️
Where is it stored❓️
Which companies and contractors are connected to the system❓️
And are users and public institutions being told those facts accurately❓️
That is a much more useful security question than simply asking which country a company came from.
Infrastructure Does Not Automatically Mean Trust
There is another contradiction in Japan that is easy to miss from overseas.
LINE has become infrastructure-like, but not everyone wants to participate in that infrastructure.
There are Japanese users who consciously avoid LINE, PayPay and other services associated with the broader SoftBank–LY ecosystem.
The reasons are not all the same.
Some are specifically concerned about privacy, cross-border data management or past security incidents.
For others, the reaction is less technical and almost instinctive:
“I simply don’t want to give that corporate ecosystem more of my data.”
There is no reliable statistic telling us exactly how many Japanese people avoid LINE or PayPay for this particular reason.
So it would be wrong to exaggerate this into a majority view.
But privacy-driven refusal of digital services itself is certainly not imaginary.
A 2026 Japanese consumer survey found that, among respondents who felt uncomfortable providing personal information, 35 percent said they had stopped using a service.
This produces an interesting kind of friction.
If a privately operated platform becomes deeply embedded in everyday life, choosing not to use it begins to carry a cost.
A person may distrust the service, yet discover that a company, store, school, neighborhood association or local authority assumes everyone has it.
The technical freedom not to use a service still exists.
But the practical price of exercising that freedom gets higher as the network grows.
That is worth remembering when somebody says:
“If you don’t trust LINE, just don’t use it.”
The Front Door Is Fortified — While the Back Door Is Left Open
Now let us move from LINE itself to corporate information security.
Many companies protect their company-issued computers and smartphones very seriously.
USB storage is restricted.
Software installation is controlled.
Access logs are recorded.
Smartphones are managed through MDM.
Endpoint protection and access-control systems are installed.
Japan Is Changing the Way Overtime Guidance Is Enforced
On August 19, 2026, The Yomiuri Shimbun reported that Japan’s Ministry of Health, Labour and Welfare plans to revise how Labour Standards Inspection Offices provide guidance to companies on overtime work beginning in September.
One point should be made clear from the outset: Japan is not simply removing its overtime limits.
Under Japan’s Labor Standards Act, an employer that requires employees to work beyond statutory working hours must conclude an Agreement on Overtime and Holiday Work under Article 36 of the Act.
In Japan, this is commonly known as a “36 Agreement,” or saburoku kyotei.
As a general rule, overtime under such an agreement is limited to 45 hours per month and 360 hours per year.
Even when labor and management agree to special provisions for exceptional circumstances, statutory limits remain in place, including 720 hours per year, less than 100 hours in a single month including holiday work, and an average of no more than 80 hours per month over multiple months.
What is changing is the way inspectors provide administrative guidance.
Until now, companies could be urged to keep actual overtime within 45 hours per month even when longer hours were legally permitted under a properly concluded special provision.
The new direction is to place greater weight on agreements between labor and management and on measures to protect workers’ health, while continuing to respond strictly to illegal or abusive long-hours practices.
Ohakonbannichiwa❗️ This is RYO from Rikigaku Observation Institute❗️
Rather than asking whether people should be allowed to work longer, or whether long working hours are inherently bad, I want to examine something that comes before that debate.
When we use the single word “overtime,” are we really talking about the same kind of time?
Forty-five hours, 80 hours, or 100 hours of overtime are figures that employers, regulators, and employees can all understand immediately.
Human workload, however, cannot be measured by time alone.
One hour spent carrying heavy objects under the summer sun is not the same experience as one hour driving a large commercial vehicle.
Neither is identical to one hour handling angry customers, one hour making a continuous series of high-stakes decisions at a desk, or one hour of work in which the employee has considerable discretion over pace and intensity.
The clock calls all of them 60 minutes.
That does not mean physical labor is always hard and desk work is always easy.
Desk work can involve intense responsibility, deadlines, concentration, decision-making, and interpersonal stress.
Likewise, two physically demanding jobs can impose very different burdens depending on work density, waiting time, breaks, and intensity.
Japan’s own workers’ compensation system already recognizes this distinction.
When evaluating work-related brain and cardiovascular diseases, authorities consider not only long working hours but also factors such as extended periods of duty, consecutive workdays, intervals between shifts, night work, and physical workload.
For mental disorders, assessments can also include power harassment, serious nuisance or abuse from customers, sexual harassment, and major changes in workload.
In other words, when we look closely at the system, the government itself does not treat every hour as an identical unit of human burden.
1,310 Workers’ Compensation Benefit Awards in FY2025
In July 2026, the Ministry of Health, Labour and Welfare published its workers’ compensation statistics on karoshi and other health damage caused by excessive work for fiscal year 2025.
The number of cases in which workers’ compensation benefits were awarded was 1,310.
Of these, 217 involved work-related brain or cardiovascular diseases and 1,082 involved mental disorders.
Another 11 cases were recognized by combining workloads from multiple places of employment.
Among mental-disorder cases, 222 involved power harassment, 127 involved serious nuisance behavior from customers or business partners, and 127 involved sexual harassment.
The relationship with very long working hours is particularly visible in cases involving brain and cardiovascular disease.
But among mental-disorder cases, there were also 57 benefit awards in the category of less than 20 hours of overtime.
The point is not that working hours do not matter.
Long working hours are clearly an important health risk.
The point is that time alone cannot fully describe the burden imposed by work.
What Do We Actually Mean by “Overtime”❓
In everyday Japanese, the word zangyo broadly means staying at work beyond a company’s scheduled working hours.
Legally, however, that is not always the same as statutory overtime under Japan’s Labor Standards Act.
Suppose a company schedules an employee to work seven and a half hours per day.
If that employee works another 30 minutes after the scheduled finishing time, those 30 minutes may still fall within the statutory eight-hour workday.
Under the Labor Standards Act, work beyond eight hours per day or 40 hours per week is generally statutory overtime and requires a premium of at least 25 percent.
For statutory overtime exceeding 60 hours in a month, the premium rises to at least 50 percent.
There is another important distinction.
Whether a period counts as working time is not determined solely by what appears on a timecard.
Japanese government guidelines state that working time should be determined objectively according to whether the worker is under the employer’s direction and control.
That is the legal question.
Management faces a different question.
Why did the work fail to get finished during regular working hours?
If Smoking Breaks Push Work Past Closing Time, What Kind of “Overtime” Is That❓
Imagine a company whose normal working day runs from 9:00 a.m. to 6:00 p.m.
An employee leaves the workplace for a ten-minute smoking break in the morning, another ten minutes after lunch, and another ten minutes in the afternoon.
That adds up to 30 minutes.
For the moment, let us put aside the separate legal question of whether those 30 minutes can or should be deducted from working time.
Six o’clock arrives, but 30 minutes of work that should have been completed that day remains unfinished.
The employee therefore works until 6:30 p.m.
The timekeeping system records “30 minutes of overtime.”
But was that really 30 minutes of overtime caused by a workload that simply could not fit into the regular workday?
To be clear, if the employee actually worked those 30 minutes under the employer’s direction and control, they are working time.
An employer cannot retroactively erase overtime pay simply because the employee smoked earlier in the day.
That is not the question being asked here.
The question is: why did the overtime occur in the first place?
Nor can we automatically assume that every employee would have finished on time if they had not taken a smoking break.
Unexpected tasks happen, and human concentration naturally fluctuates.
But if a company uses overtime hours as a management and productivity metric, it should examine not only how many hours were recorded, but why they were recorded.
Overtime caused by excessive workload / understaffing / waiting for approval / unnecessary meetings / internal procedures / private absences during working hours.
All of them may appear as the same “one hour of overtime” in a timekeeping system.
Their causes, however, are not the same.
And Then Comes the 1.25× Smoking Break🚬
Now we can return to the smoking break itself.
If a company clearly treats smoking breaks as breaks and appropriately excludes them from working time, the following issue does not apply.
Such a company can simply say, “We already manage that.”
The interesting case is a company that does not deduct smoking absences and instead leaves them recorded as ordinary working time.
Suppose the employee has entered statutory overtime and then takes another ten-minute smoking break.
If those ten minutes remain recorded and paid as statutory overtime, the company is effectively paying the overtime rate for that period as well.
In a typical case, that means 1.25 times the ordinary wage.
“A smoking break during overtime — paid at 1.25×.”
Put into words, it is quite a striking phrase.
Consider an employee earning ¥2,000 per hour.
Thirty minutes of smoking breaks during regular working hours represent ¥1,000 worth of paid time.
If 30 minutes of work is then pushed beyond the end of the regular workday and becomes statutory overtime, that work costs ¥1,250.
If the employee then takes another ten-minute smoking break during that overtime period and the company continues to count it as paid statutory overtime, that ten-minute absence costs approximately ¥417.
In this illustrative example, the total comes to approximately ¥2,667 per day.
Over 20 working days per month and 12 months, that is approximately ¥640,000 per employee per year.
The 1.25× premium does not apply to the original 30 minutes of daytime smoking breaks themselves.
It applies to the statutory overtime that follows — including, where applicable, smoking time that is itself still being counted as overtime.
That distinction matters.
Again, this is not an argument for refusing to pay legally required overtime.
If an employee performs statutory overtime under the employer’s direction and control, the employer must pay the legally required premium.
The real issue is the structure that produced the overtime.
A company is free to tolerate smoking breaks / formalize them as breaks / regard them as an employee benefit.
But if it counts those periods as working time while simultaneously complaining that “overtime is too high,” “labor costs are too high,” or “productivity is too low,” it may be time to look inside the numbers.
Before Cutting Overtime, Observe What Is Inside It
Japan’s change in overtime guidance can also be viewed as returning part of the responsibility to companies themselves.
It may no longer be enough for management to say, “The labor inspector told us to keep overtime below 45 hours, so just reduce it.”
If labor and management agree that overtime is necessary and it remains within the law, the company should be able to explain why that overtime is necessary and how employees’ health is being protected.
That requires looking not only at the quantity of working time, but also at its density and its causes.
Physically demanding work / psychologically demanding work / highly discretionary work / work with long waiting periods / work pushed beyond closing time by private absences during the day.
They are not identical merely because they are all recorded as overtime.
Throwing all of them into a single box labeled “overtime hours” and trying only to reduce the number is an extremely rough form of management.
Preventing health damage from excessive working hours and examining what actually happens during working hours are not competing objectives.
Companies need to do both.
Before saying, “Reduce overtime,” perhaps management should first ask:
“Why did this overtime happen?”
For companies, the hardest labor cost to see may not be the overtime premium itself.
It may be the cost hidden inside the number called “overtime.”
This article discusses Japanese labor regulations and corporate labor management in general terms.
Whether a particular period legally constitutes working time, and how wages must be calculated, depends on the actual work rules, working conditions, and degree of employer direction and control in each case.
※Translated by AI Watt — the Institute’s hardworking canine AI robot. No overtime premium required.🐾
