The professional-type discretionary work system — how individual consent and reporting changed in the April 2024 amendment

Bottom line first: From April 2024, introducing or renewing the professional-type discretionary work system requires the labour-management agreement to state that the consent of each covered worker will be obtained, and that a worker who does not consent will not be treated disadvantageously. A company already running the system has to redraft its agreement.

The professional-type discretionary work system deems a worker to have worked the hours fixed in the labour-management agreement, regardless of the hours actually worked (Labor Standards Act, Article 38-3, paragraph 1). It can be used only for work — research and development, systems design and the like — whose method must be left largely to the worker's discretion.

The amendment in force from 1 April 2024 (Ministry of Health, Labour and Welfare Ordinance No. 39 of 2023) tightened the entrance to this system. Where an agreement alone once let an employer bring workers in as a group, the consent of each individual is now required, and the agreement must set out the procedure for that consent and the route to withdraw it.

Whether a company's work qualifies, and whether its current agreement meets the new requirements, cannot be settled by an article. What follows is the shape of the system and what the April 2024 amendment adds.

Who can the professional-type discretionary work system be used for?

The type of work decides it. This is not a system for anyone.

Article 38-3, paragraph 1 limits it to work prescribed by ordinance as work whose method must be left largely to the worker's discretion, so that it is difficult for the employer to give concrete instructions on how the work is carried out or how time is allocated. The covered types are listed in Article 24-2-2, paragraph 2 of the Ordinance for Enforcement of the Labor Standards Act, with the details designated by notification of the Minister.

From 1 April 2024, "the investigation or analysis of mergers and acquisitions at a bank or securities firm, and advice based on it" (M&A advisory work) was added, bringing the total to 20 types (Ministry Notification No. 115).

Category	Main covered work
Listed in the Ordinance	Research and development of new products or technology; analysis and design of information systems; gathering and editing of articles; the devising of designs; producers and directors of broadcast programmes and films
Designated by Ministry notification	Copywriter, systems consultant, creation of game software, securities analyst, development of financial products, university research, certified public accountant, lawyer, architect, real estate appraiser, patent attorney, tax accountant, small-business consultant, M&A advisory work (added April 2024)

Sales staff and general clerical workers do not qualify, however busy they are. Bringing in someone whose work does not fall within the covered types leaves room for a finding that the system itself is invalid. Redistributing the working hours themselves over a month or a year is a different scheme, set out in choosing between variable working hours and flexitime.

Why did the April 2024 amendment make individual consent mandatory?

Because being made to work under deemed hours has a heavy effect on the worker.

Once the system applies, wages are calculated on the hours fixed in the agreement, however many hours are actually worked. Run in line with its purpose, that supports freedom in how one works; run without matching reality, long hours may not be reflected in pay. The amendment therefore set as a requirement that the person to whom it applies accepts it knowingly.

Under Article 24-2-2, paragraph 3, item 1 of the Ordinance, the agreement must now state:

• that the consent of the covered worker must be obtained before having them work under deemed hours
• that a worker who does not consent must not be dismissed or otherwise treated disadvantageously

The Ministry's guidance states that consent should be obtained after explaining the outline of the system, the evaluation and wage systems that apply to the worker, and the placement and treatment if consent is not given. In practice, consent is obtained from each worker in writing.

Can a worker who once consented withdraw it later?

Yes. The amendment went as far as requiring the procedure to be in the agreement.

Article 24-2-2, paragraph 3, item 2 of the Ordinance requires the procedure for withdrawing consent to be set in the agreement — where the withdrawal is directed, in what form, and which working-hours system the worker returns to. And, as with a worker who never consented, disadvantageous treatment on the ground of withdrawal is prohibited.

Consent is therefore not something taken once at the entrance and done with; a covered worker can step out of the system at any time. The employer must prepare, in advance, the route for attendance management and wage calculation after a withdrawal.

What must be newly added to the labour-management agreement?

Consent, withdrawal and records are the axes. The April 2024 items layer onto the original agreement items.

Item to set in the agreement	Basis	April 2024 amendment
Covered work	Act, Article 38-3(1), item 1	As before
Deemed working hours	Same, item 2	As before
Giving no concrete instructions on method or time allocation	Same, item 3	As before
Health and welfare measures	Same, item 4	Menu of measures reorganised
Grievance-handling measures	Same, item 5	As before
Obtaining consent; no disadvantageous treatment of those who do not consent	Ordinance, Article 24-2-2(3), item 1	New
Procedure for withdrawing consent	Same, item 2	New
Period of validity of the agreement	Same, item 3	As before
Keeping records of consent, withdrawal, health/welfare and grievance handling	Same, item 4	Consent and withdrawal added to the records

Records are kept during the period of validity of the agreement and for three years after it ends (the Ordinance text says five years, but a transitional measure applies three years for the time being). The Ministry's guidance states that the period of validity itself should be no more than three years. A company running the system under an existing agreement is safest concluding a fresh agreement in line with the amendment rather than waiting for the current one to expire.

When are the filing and the report of health and welfare measures made?

The filing is once, when the agreement is concluded; the professional-type system has no periodic report. This is a major difference from the planning-type system.

Article 38-3, paragraph 2 of the Labor Standards Act requires the concluded agreement to be filed with the head of the competent Labour Standards Inspection Office. The filing uses Form 13 (Ordinance, Article 24-2-2, paragraph 4) and is submitted each time the agreement is concluded or renewed. Health and welfare measures are set in the agreement and carried out, and their implementation is kept as a record, but there is no duty for the professional-type system to report that content to the Inspection Office periodically.

By contrast, the planning-type discretionary work system (Article 38-4) requires the resolution of a labour-management committee to be filed and then requires periodic reporting on matters such as the state of the covered workers' hours and the implementation of health and welfare measures. Even within "discretionary work", the procedure is heavier for the planning type. Which one suits a company turns on the covered work and the structure it can put in place.

Who handles the agreement, the filing and any dispute?

The work divides by stage. Here is the line.

• Preparing the labour-management agreement, aligning the rules of employment and wage regulations, filing the agreement with the head of the competent Labour Standards Inspection Office, designing the health and welfare measures, and designing the procedure for selecting the majority representative → the domain of the Certified Social Insurance and Labour Consultant
• Negotiation or litigation once the propriety of deemed hours or unpaid overtime becomes contested → consult a lawyer (Bengoshi)
• Tax treatment of wages and year-end adjustment → we connect you with a tax accountant (Zeirishi)

The Labor Standards Act is listed in item 1 of Appended Table 1 of the Certified Social Insurance and Labour Consultant Act; preparing applications under it falls under Article 2, paragraph 1, item 1, filing under item 1-2, and advice and guidance on labour management under item 3.

What can 四葉社会保険労務士事務所 do?

What this office takes on is judging whether the system can be introduced, and lining up the documents in line with the April 2024 amendment.

• Determining which of the 20 covered types a company's work falls under (or does not)
• The way consent is obtained (matters to explain, a consent-form template) and the design of the withdrawal procedure
• Preparing the agreement and filing it with the competent Labour Standards Inspection Office on Form 13
• Amending the rules of employment and wage regulations, and reworking the calculation of deemed hours and late-night and holiday premiums
• Designing the health and welfare measures and grievance-handling measures, and the record forms
• Organising the comparison with the planning-type system

The following are not handled here.

• Negotiation or litigation once the propriety of deemed hours or unpaid overtime becomes contested → we refer you to a lawyer (Bengoshi)
• Tax treatment of wages and year-end adjustment → we connect you with a tax accountant (Zeirishi)
• Company registration procedures → we connect you with a judicial scrivener (Shiho Shoshi)
• Preparing licence and permit applications → 四葉行政書士事務所 accepts this as a separate business entity
• Leases of premises or company housing → 四葉不動産株式会社 accepts this as a separate business entity

四葉不動産株式会社, 四葉行政書士事務所 and 四葉社会保険労務士事務所 each accept work as an independent business entity, under a separate contract. Where another professional is introduced, you contract with them directly, and this office receives no referral fee.

Consultations are free of charge. Fees are set out in the fee schedule; see also our services and how a consultation proceeds. Overtime ceilings themselves are covered in overtime limits are set by the Article 36 agreement, and the filing of the rules of employment in how many employees make rules of employment mandatory.

Frequently asked questions

Q. We already run the professional-type discretionary work system. What should we do about the April 2024 amendment?
A. You conclude a fresh labour-management agreement. The amendment in force from 1 April 2024 (Ministry Ordinance No. 39 of 2023) now requires the agreement to state that consent is obtained and that a non-consenting worker is not treated disadvantageously (Ordinance, Article 24-2-2, paragraph 3, item 1) and the procedure for withdrawing consent (item 2). The agreement setting these out is filed on Form 13 with the competent Labour Standards Inspection Office. Even if the current agreement still has time to run, the system's application is at risk if the new requirements are not met, so it is safest to update it without waiting for expiry.

Q. If a worker does not consent, how do we treat them?
A. You do not apply the discretionary work system to them and manage them under ordinary working-hours management (based on actual hours). Dismissal, demotion, a pay cut or any other disadvantageous treatment on the ground of not consenting is prohibited (Ordinance, Article 24-2-2, paragraph 3, item 1). The same applies to a worker who later withdraws consent: disadvantageous treatment for the withdrawal is not permitted.

Q. If the work qualifies, can we stop managing working hours?
A. No. Even under deemed hours, the employer must grasp the state of working hours and, in line with what it grasps, carry out health and welfare measures (Article 38-3, paragraph 1, item 4). The deeming covers the calculation of scheduled hours; premium wages are still required separately for late-night work (10 p.m. to 5 a.m.) and holiday work. "Discretionary work means no overtime pay at all" is a misunderstanding.

Q. Should we choose the professional type or the planning type?
A. It divides by the work covered and the structure you can put in place. The professional type is limited to the 20 types set by the Ordinance and notification and can be introduced with a labour-management agreement and a filing (Form 13). The planning type covers planning, drafting, investigation and analysis on business operations and requires a labour-management committee and resolution, filing of the resolution, and periodic reporting (Article 38-4). The procedure is heavier for the planning type; which suits your company is something we organise after a consultation.

Basis for this article

• Labor Standards Act (労働基準法, Act No. 49 of 1947), Article 38-3, paragraph 1 — where the agreement sets item 1 (covered work), item 2 (deemed hours), item 3 (no concrete instructions on method or time allocation), item 4 (health and welfare measures), item 5 (grievance-handling measures) and item 6 (other matters prescribed by ordinance), a worker put to the item-1 work is deemed to have worked the item-2 hours
• Same Act, Article 38-3, paragraph 2 — applying Article 38-2, paragraph 3, the agreement is filed with the administrative agency (the competent Labour Standards Inspection Office)
• Same Act, Article 38-4 — the planning-type discretionary work system: the labour-management committee resolution, its filing, and periodic reporting as prescribed by ordinance
• Ordinance for Enforcement of the Labor Standards Act (労働基準法施行規則, Ministry of Health and Welfare Ordinance No. 23 of 1947), Article 24-2-2, paragraph 2 — the covered types of work, including those designated by the Minister
• Same Ordinance, Article 24-2-2, paragraph 3, item 1 — consent must be obtained and no disadvantageous treatment of a worker who does not consent; item 2 — the procedure for withdrawing consent; item 3 — the period of validity of the agreement; item 4 — keeping records of health/welfare measures, grievance handling and consent/withdrawal during the period of validity and after it ends (five years in the Ordinance text, three years for the time being under a transitional measure)
• Same Ordinance, Article 24-2-2, paragraph 4 — the agreement is filed on Form 13
• Ministry of Health, Labour and Welfare Notification No. 115 adding M&A advisory work to the covered work (in force 1 April 2024)
• Ministry of Health, Labour and Welfare, "Explanation of the professional-type discretionary work system" (March 2024) — that consent should be obtained after explaining the outline, evaluation and wage systems and the treatment if consent is not given; that the period of validity should be no more than three years; record-keeping
• Certified Social Insurance and Labour Consultant Act (社会保険労務士法, Act No. 89 of 1968), Article 2, paragraph 1, items 1, 1-2 and 3, and item 1 of Appended Table 1
• Statutory texts were confirmed on 2 September 2026 from the e-Gov law data API (law IDs 322AC0000000049, 322M40000100023 and 343AC1000000089). The Ministry's guidance and notification were confirmed the same day

This article does not determine whether any particular case qualifies. 四葉社会保険労務士事務所 can advise on organising the covered work of the professional-type discretionary work system, designing the consent and withdrawal procedures, preparing and filing the agreement on Form 13, amending the rules of employment and wage regulations, and designing the health and welfare and grievance-handling measures. Negotiation or litigation once the propriety of deemed hours or unpaid overtime becomes contested is not handled by this office; we refer you to a lawyer (Bengoshi). Tax treatment of wages and year-end adjustment are matters we connect you with a tax accountant (Zeirishi) for, and registration with a judicial scrivener (Shiho Shoshi). Licence and permit applications are accepted by 四葉行政書士事務所, and leases of premises or company housing by 四葉不動産株式会社, each as a separate business entity. If a different professional is needed, each is contracted separately, and there is no referral fee. Frequently asked questions are collected in the FAQ.

This article is general information. Individual determinations are made by a qualified professional after a consultation, in light of individual circumstances. Written by Joji Uramatsu (Shakai Hoken Roumushi, Gyoseishoshi, Registered Real Estate Transaction Specialist).