News: 7-11 Japan to pay millions in outstanding overtime

Compensation & Benefits

7-11 Japan to pay millions in outstanding overtime

A long-standing error in the calculations for part-time workers may date back almost half a century.
7-11 Japan to pay millions in outstanding overtime

Seven-Eleven Japan said on Tuesday that it had failed to pay at least 30,000 part-time workers their full overtime wages for decades. The outstanding sum adds up to at least 490 million yen (USD$4.5 million), which the franchise plans to pay out to the best of its abilities. The problem it faces, however, is not so much the amount as it is the length of time that has passed. The shortfall was caused by an erroneous equation which has reportedly been in use at least since October 2001 and may even date back to the company’s founding in the 1970s. However, Seven-Eleven’s full records only date back to March 2012. In the intervening time, workers have long since moved on, some records have gone missing, and stores have closed.

The issue with the company’s calculations had apparently been discovered twice, once in 2001 and again in September this year, although Seven-Eleven Japan president Fumihiko Nagamatsu, who assumed the position in April, told Japan Today that the reason for not disclosing the problem or addressing it earlier was unknown. The company said that Nagamatsu, who apologized for the cases at the press conference, will voluntarily cut his monthly remuneration by 10 percent for three months to take responsibility for the matter.

The amount of pay owed may have been exacerbated by Japan’s well-known culture of overtime, combined with the difficulty of operating the around-the-clock model in the midst of severe labor shortages as the population ages. Japan has over 50,000 convenience stores, known locally as konbini, and each one may need as many as 20 part-timers to run it. The konbini have faced considerable difficulty finding personnel for years, and the staff they do manage to hire are often subjected to gruelling hours--which, in the case of the Seven-Eleven calculation error, simply adds up to more miscalculated wages to be paid back.

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Topics: Compensation & Benefits, #GlobalPerspective

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