“Black kigyo”, literally “Black companies”, are companies characterized by exploitative and borderline illegal working conditions, as opposed to “white companies” where working conditions and benefits for the employees are standard or better than average.

The fragile perception of black and white “kigyo”.

The term “black” conveys the negative aspects of these companies, which often exhibit excessive working hours, low pay, inadequate benefits, harassment, and a poor work-life balance.

Employees are frequently subjected to extended workweeks, leading to high levels of stress and potential health problems. The intense work culture in these companies often results in limited time for personal and family activities, which has degenerated into “karoshi”, “death for overwork” that have sadly made the news in Japan.

Japan has also a very strong culture based on work and not being a nuisance to colleagues and superiors. Furthermore, if other employees accept unhealthy work conditions, the social pressure of fitting in might be strong on the individual, who ends up treating those work conditions as normal – just because everyone else around is accepting them.

Furthermore, rather than output and performance, the Japanese working system rewards input in the form of commitment and loyalty to the company, which falls back to working long hours and sacrificing their personal time for the “greater good” of the company.

What Are the Elements for a Company to Be Classified as “Black”?

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1. Long Working Hours

The average “black kigyo” employee works an average of 80 hours overtime or more in a month. Considering there are about 20 working days a month, the overtime exceeds four hours every single day.

Article 36 of the Labor Standards Act​ states that the maximum allowable overtime work, often referred to as the "limit," is set at 45 hours per month and 360 hours per year, with no exceptions unless under extraordinary special circumstances. Even if there is an agreement between labor and management to extend the limit due to extraordinary special circumstances, the annual cap cannot surpass 720 hours. This averages out to no more than 80 hours per month over several months, including work on holidays, and no more than 100 hours per month, again including work on holidays.

Furthermore, it's stipulated that the 45-hour monthly limit should not be exceeded for more than 6 months in a given year. This framework is designed to regulate and restrict overtime work to ensure the well-being and safety of employees.

The cherry on top is that even though employees in black companies end up working so much overtime every month – since that is also illegal –those overtime hours are hardly ever compensated.

2. Lack of Holidays and Insufficient Paid Time Off

A notable trait of black companies is their scarcity of holidays. If you often find yourself complaining about the lack of time off, perhaps realizing that your last day off was spent sleeping and recovering from stress, that could indicate that the company you are working for is indeed quite black.

In a standard scenario where days off align with the calendar, an employee would be able to have around 120 days off per year. The annual average for holidays is also approximately 120 days. Therefore, a company offering less than 100 days off annually is considered to have a limited holiday allowance.

Moreover, if the number of holidays drops below 80 days, it strongly suggests that the company falls into the category of a black company concerning holiday provisions. With only 80 days off per year, this translates to approximately 6 days off per month or 1 to 1.5 days off per week. Insufficient time off can contribute to an unhealthy work-life balance and is a key indicator of poor working conditions.

3. Ambiguous Employment Contracts and Harassment

So-called black companies often have ambiguous employment contracts, and employees may encounter various unfamiliar terms.

While the standard understanding is that overtime pay is applicable when working beyond the usual 8-hour workday, there are instances where exceptions may apply, and “black companies” might exploit those ambiguities. In addition, being traditional Japanese companies very hierarchical, it is not rare to witness superiors putting pressure on subordinates to the point of power harassment.

It's crucial for employees to carefully review and understand the terms of their employment contracts to ensure fair compensation and proper treatment in the workplace.

4. The Job Turnover Rate Is High

Working conditions in that company are so stressful and unfair that no matter what, it is hard to last long. If the rate of turnover is high and there a not many senior company employees, the chance is high that you are looking at a black company – or at least at a very stressful job.

The “Most Evil Corporation of the Year” Award

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The “Most Evil Corporation of the Year” award is a project aimed at identifying and highlighting top companies in Japan with issues such as overwork, overtime practices, power harassment, false contracting, and discrimination against dispatched workers (commonly referred to as black companies). This initiative began in 2012 and ended in 2019 with the latest published ranking.

The project was overseen by the "Black Company Awards Planning Committee," consisting of members such as labor union executives, NPO representatives, writers, lawyers, and university professors. The committee focused on pinpointing “black” enterprises, with the objective of "broadly communicating the background and social structure issues" contributing to the existence of black kigyo. Their ultimate goal was to raise awareness and to further create a work environment in Japan where everyone can feel safe and heard.

Since its inception in 2012, the award ceremony has been an annual event, with winning companies invited – but of course, as of now – no company has attended the ceremony.

Black Kigyo in Japan and the Pursuit of Workplace Justice

"Black kigyo" denotes Japanese companies with exploitative practices, embodying excessive work hours, scant holidays, unpaid overtime, and high turnover.

In recent years, advocacy for improved conditions has become stronger and stronger, and we are finally starting to see some positive changes in terms of more flexible and diverse working styles. Younger generations, in particular, are not willing to fulfill an outdated image of employees that has persisted in Japanese companies for decades, sacrificing precious personal time and putting mental well-being at risk.