The highest ranking Japanese person on Forbes’ most recent Billionaires List is Tadashi Yanai, the president of Fast Retailing Co., which operates the huge discount clothing chain Uniqlo. Yanai placed 66th on the list with $13.3 billion. His inclusion in the world’s most prestigious business magazine’s prestigious list is appropriate in that Fast Retailing has promoted an image of being more internationally oriented than other major Japanese companies, with its insistence that management be fluent or at least conversant in English and employment policies that have resulted in one of the highest percentages of female management of any company in Japan. When recruiting new talent, Fast Retailing pushes its global outlook and hints that ambitious new employees could see themselves transferred to Paris after only 18 months on the job. Consequently, the company has became a top draw for university graduates, who see it as a forward-looking company that rejects the insularity Japanese firms are known for.

Coincidentally, the weekly economics magazine Toyo Keizai recently ran a cover feature critical of Fast Retailing titled “Hihei suru shokuba” (“The worn-out workplace”). The article describes the company as a different sort of employer than its image would have you believe, dwelling on labor practices that follow all the worst stereotypes of Japanese corporations. Apparently, this isn’t news. Fast Retailing is suing Bungei Shunju for publishing an unflattering book about the “Uniqlo Empire,” asking for ¥200 million in damages and halting sales of all remaining copies. Toyo Keizai seems to have gotten Uniqlo’s cooperation up to a point. In addition to talking to a number of former and current employees (anonymously, of course), they interviewed executives who gave them some startling statistics, such as the turnover rate. In 2007, 37.9 percent of all new regular employees quit the company within three years. This portion rose to 53 percent by 2009. Moreover, 43 percent of employees who take sick leave cite mental stress as the reason. It’s common for new grads to become disillusioned with company life, but that’s pretty high for a company with Uniqlo’s appeal.

The problem is the workload. Company policy prohibits any full-time employee from working more than 240 hours in a month, or 80 hours overtime. Any violation of this rule will result in immediate “suspension.” One store manager told the magazine that he worked 23 12-hour days last December for a total of 276 hours. If he had reported those hours he would have been punished and probably demoted, so he only reported 240, the rest being what in Japan is referred to as service zangyo, or voluntary overtime with no pay. However, Fast Retailing also forbids service zangyo, so the aforementioned store manager would have had to hide the fact that he lied on his time card. The punishment for working overtime for free is even harsher than it is for working more than 240 hours: instant demotion and disqualification for any management positions in the future. And a manager who compels any of his subordinates to work free overtime is fired without discussion.

These contradictory rules place a particularly heavy physical and emotional burden on Uniqlo employees, who are required to follow the company manual to the letter. All the inventory in a Uniqlo store must be displayed for sale, which means constant work for everyone involved, moving merchandise around and restocking. Also, Uniqlo now has bargain sales from Friday to Monday on a regular basis, entailing more man-hours. If the employees reach their limit of hours worked, then the manager has to pull them off the schedule and do the work herself, which means she will likely exceed her own limit. And since one of the company’s credos is that employees are never supposed to say “I can’t do it” or make excuses, managers have to somehow get the work done without causing anyone to notice that they’re working themselves sick. Store managers are deemed to be kanri kantokusha, a Labor Standards term meaning “part of management.” Management employees do not have to follow hourly protocols the way regular staff do, which means they don’t get paid overtime anyway. This is the same distinction that McDonald’s used to deny overtime pay to a branch manager some years ago. Uniqlo store managers have no independent decision-making capacity the way normal management does. They must follow the manual as strictly as the rank-and-file and have no say in corporate policy.

More significantly, their pay doesn’t justify all that extra work. Uniqlo has 18 salary grades, and rookie store managers are fourth from the bottom. They earn about ¥4 million a year, which explains the early turnover. However, the most surprising revelation in the article is that Uniqlo employees, staff and managers alike, have to practice rote greetings and exhibit pre-determined workplace behaviors while on the job, thus proving that Fast Retailing adheres to the kaisha (corporate) culture these brave new workers wanted to avoid in the first place.

Tags: Fast Retailing, overtime pay, service zangyo, Tadashi Yanai, Uniqlo

Yen for Living is produced by Philip Brasor, a freelance writer-for-hire, and Masako Tsubuku, a freelance translator and interpreter. They are currently working together on a book about Japanese housing that will probably never be finished. In the meantime they have their own blog on the subject: Cat Foreheads & Rabbit Hutches. You can read more by Philip at philipbrasor.com.