Working time
Rebalancing working time to meet modern workforce demands
China begins a gradual increase in its retirement age over a 15-year period, reflecting a global trend. French workers who fall ill while on holiday can now apply the days they were sick toward a future vacation. The Spanish cabinet’s push for a shorter work week is rejected by parliament, while Germany proposes greater flexibility on working hours. Japan considers prohibiting employers from requiring workers to work more than 13 consecutive days.
Key takeaways
- Governments facing demographic pressures are pursuing different strategies to keep older workers in the labor market, from legislative reform to financial incentives.
- Legislation in the Netherlands links the state pension age to life expectancy, while pension reform in France is stalled because of political instability.
- Many jurisdictions are prioritizing flexibility and well-being for employees.
- Discussions on shorter work weeks are taking place in Europe and Latin America.
Employees worldwide are experiencing a shift in working time expectations. Some older workers in Asia will be forced to put off leaving the workforce due to legislation that raises the retirement age. This reflects aging populations and lower birth rates in a region whose fertility rate is among the world’s lowest, leading to a shrinking workforce. These societal shifts have put added pressure on already stressed public pension systems.
Such demographic pressures are being watched closely by researchers, who observe the phenomenon by looking at a number called the dependency ratio, which measures the number of non-working people (aged 65+) with working people (aged 15-64). A dependency ratio of around 50-60 is generally viewed as sustainable for a modern economy, while anything above 70 signifies serious fiscal pressure, with more elderly people than there are workers to support them. The issue is relevant globally, not just in Southeast Asia. In developed economies, dependency ratios are not only increasing but are projected to reach an average of 73 by 2050, according to a study by UN Trade and Development.
But there’s some good news for the global workforce. In Germany, the government is offering incentives to those who work past the normal retirement age. Some countries are giving employees more flexibility when it comes to work and vacation time, and others are considering shorter work weeks.
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Retirement age increases reflect growing aging populations and lower birth rates.”
Retirement age and pension reforms
China implemented legislation on 1 January 2025 to increase the retirement age gradually over a 15-year period. This increase will continue until it reaches 63 for men (previously 60), 58 for women in management positions (previously 55), and 55 for women in non-management positions (previously 50).
As these changes begin to take effect, China is also offering options for flexible retirement and delayed retirement. A worker can retire up to three years earlier than the new guidelines state, so long as they have met the minimum pension contribution period. However, employees cannot retire below the previous statutory age of 60 for men and 55 or 50 for women. An employee can simply notify their employer in writing at least three months in advance of their intention to retire early; no company approval is needed. Meanwhile, employees can also retire up to three years past the new statutory age, but only if they and their employer mutually agree. Companies can set conditions, but cannot pressure the employee one way or the other, and employers are not required to agree to a delay.
Although no legislation on retirement age was passed in Singapore in 2025, a 2022 law will see it jump from 63 to 64 on 1 July 2026. The government aims to raise the retirement age to 65 by 2030.
In Germany, the government is offering incentives for workers who opt to work past the normal retirement age, but it is not compelling employees to work longer by formally increasing it. In October 2025, the cabinet agreed on a draft law to allow those who work past the typical retirement age to earn up to €2,000 (US$2,350) a month tax-free. This change is due to take effect at the beginning of 2026. The absence of compulsion reflects the coalition government’s fragility, allowing it to avoid a major parliamentary battle while still encouraging older workers to remain in the labor market.
When it comes to pensions in the Netherlands, the age at which an employee qualifies for the state pension is linked to projected national life expectancy, avoiding some of the political tensions experienced in countries that are asking employees to work longer. Legislation provides that from 2025 the state pension age will increase by eight months for every one-year increase in life expectancy. The pension age is set at 67 years until 2027, and will jump to 67 years and three months in 2028.
France is resisting the trend toward a gradual increase in retirement ages. The government introduced legislation in 2023 which gradually raises the retirement age from 62 to 64. This was unpopular and met with mass protests and strikes at the time. Now there is talk of the reform being suspended until 2028. The legislation suspending the reform is currently being discussed by parliament, although the absence of a parliamentary majority for any one party or alliance of parties makes it more difficult to pass.
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Governments are redefining how work is measured and managed.”
Favorable changes for employees
While many changes to working time are aimed at lessening the burden on public pension systems, others are designed to provide greater protections and flexibility for workers. In France, a Supreme Court decision confirmed that employees who fall sick while on vacation can now postpone the days of holiday during which they were unwell and take them at a later date, as long as they give the correct notification to their employer. Before the decision, workers were simply considered to be “out of luck” if they fell sick during a vacation. This change reflects European case law, which states that an individual’s right to take annual leave is separate from their need to take sick leave.
In a move that has the potential to benefit both employers and employees, Germany has proposed working time law reform abolishing a current rule which states that employees cannot work more than eight hours per day (extendable to 10 hours as long as the daily average doesn’t exceed eight hours over a six-month period). Instead, under the current plans, the new law would allow employees to work any number of hours per day, as long as the weekly average does not exceed 48 hours per week and an employer observes daily rest break requirements. By doing away with the daily cap, employees could have more flexibility to control their own work schedules, while employers could benefit from fewer compliance checks and the ability to adjust hours to reflect periods when they have higher demand. Having said that, some research suggests that longer daily working hours may have negative consequences for employees’ health.
Concerns about excessive working hours led to change in Japan, where the government is considering an amendment to the Labor Standards Law to prevent employers from requiring employees to work more than 13 consecutive days, removing previous exceptions that allowed for longer periods. This follows a years-long public debate about overwork and reflects growing attention toward the issue of mental health. Meanwhile, the government is also considering requiring employers to designate which days are statutory holidays, and paying premium rates if employees work on those days.
In Spain, conversations are taking place regarding the potential for a shorter working week. Although the Spanish cabinet passed a draft bill to reduce the work week from 40 hours to 37.5 hours in July 2025, the legislation was rejected by parliament in September after opposition parties and one regional group voted against it. The move reflects the current state of the government, which lacks a parliamentary majority and relies on the support of smaller parties to pass legislation.
Similar debates about a reduced working week are taking place in Mexico, reflecting a broader trend across Latin America. A proposed change would see the standard work week in Mexico drop from 48 hours to 40 hours. On 3 December 2025, President Claudia Sheinbaum sent Congress a bill to amend the Mexican Constitution and the Federal Labor Law to reduce the legal work week. This change will be implemented gradually, so that by 2030 the maximum work week will be 40 hours. If approved by Congress, the reform would come into effect by May 2026 and the work week would begin to reduce as of 1 January 2027. Reductions in working hours are already being seen in practice through collective bargaining agreements.
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Fragile European governments are making working time reform more difficult.”
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