October 28, 2022

Employers in Japan with 301 or more employees will have to disclose annually the gender pay difference between male and female employees within three months, for financial years ending on or after 8 July 2023. Smaller employers — with 101 to 300 employees — will have to report on certain gender balance information. The first reporting period will cover the 2022 financial year (1 April 2022 to 31 March 2023). The measures are included in the Act on the Promotion of Women’s Participation and Career Advancement in the Workplace that took effect on 8 July 2022. According to a 2022 survey by the Organization for Economic Cooperation and Development (OECD), the gender pay gap in Japan is 22%.

Highlights

Disclosure of information. Depending on their workforce size, employers must disclose information included in two categories.
 

  • Category 1 includes the progress achieved by the organization in expanding the professional opportunities for female workers, including a report on the gender pay gap. Other topics include the percentage of female hires, the gender balance of job applicants, the percentage of women in different grades, the gender balance of different job types or roles, and the number of men and women employed as part of reemployment or mid-career hiring initiatives.

  • Category 2 includes steps taken to improve employees’ work-life balance. Other topics include the difference in average continuous service between men and women, the percentage of men and women continuously employed over the 10 years before and after hiring, the percentage of employees (by gender) taking parental leave, the average monthly overtime hours (by gender and by employment category), and the percentage of male and female workers taking paid leave (by employment category).

Workforce size. Employers with 301 or more regular employees will have to disclose information on at least two items (including a gender pay gap analysis) featured in Category 1, and on at least one item from Category 2. Employers with 101 to 300 regular employees must disclose information from at least one item in each category.
 

Gender pay gap analysis. Employers with 301 or more regular employees must analyze the average wages of regular female workers as a percentage of the average wages of regular male workers (rounded to the first decimal place) for the total population, and for each employee category (full-time, part-time and fixed-term). Temporary agency workers are excluded from the act’s scope.
 

  • Pay includes base salary, overtime allowances and bonuses, but excludes retirement benefits and commuting allowances. 

  • Employers can voluntarily disclose additional gender pay gap information including an analysis of the reasons for the pay gap, details on their employment categories, pay differences between comparable male and female workers (due to their tenure, role, etc.), differences between full-time, part-time and fixed-term workers when analyzed on an hourly basis, and an analysis of the gender pay gap over multiple financial years. 

Disclosure of gender pay gap. Employers with 301 or more employees must include the gender pay gap analysis in their annual “general employer action plans,” along with information about the measures taken to improve workplace gender equality, and an analysis of the employment situation of female employees. Employers must communicate their plan internally and externally and submit them to the prefectural labor bureaus.
 

Consequences for noncompliance. Though sanctions will not apply to noncompliant employers, the Ministry of Health, Labor and Welfare could publicly name those companies.
 

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