Court orders company to pay 5 million yen for invalid fixed overtime pay

A court ordered a company to pay approximately 5 million yen in unpaid overtime wages to an employee. The court ruled the company's fixed overtime pay system was invalid. The employee argued that the fixed overtime pay was insufficient for actual hours worked. The court found the company's system lacked the necessary requirements for a valid fixed overtime agreement, specifically the ability to distinguish overtime pay and its purpose as compensation for overtime. The ruling highlights that fixed overtime pay must clearly separate regular wages from overtime compensation and genuinely compensate for extra hours. If these conditions aren't met, employees may be able to claim significant back pay.