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Japan to Require Pay Gap Disclosure By 2023

Making history in Asia, large companies in Japan will soon be required to disclose gender pay gaps among their employees. HR Policy Global members explored this new initiative to help women’s participation and advancement in the workplace and how global companies should approach their gender pay equality goals. If you missed it, you can review the recorded session here.

The discussion was led by Yuichiro Mori and Chizuru Yoshida at Jones Day Tokyo, Shawn Cramer, International Total Rewards Leader at GE Aviation, and Michelle Swinden, Director of Asia Affairs at HR Policy.

Traditionally, Japanese women have been underrepresented in the workforce after marriage due to lack of family and childcare support. But labor shortages due to a declining population have driven new efforts to attract women to the workplace. A new amendment to the Promotion of Women’s Participation and Advancement in the Workplace Act is the most recent step that the government has taken and will be effective through the end of March 2026, with a possibility to extend.

Under this amendment, all companies employing more than 301 workers in Japan are required to:

  • Compare the average pay of female employees to male employees and separately disclose the gender pay gap among permanent (regular) workers and non-permanent (non-regular) workers.

    • The calculation should include base wage, bonus, and allowance.

    • The pay period will be from January 1 to December 31, 2022.

    • Specific pay data of subgroups, such as job titles or roles, does not need to be disclosed.

    • Companies have discretion whether to include retirement and commuting allowances in their analysis.

  • Analyze and identify gender gap issues and set targets relating to the advancement of women in the company. Create and publish the General Employer Action Plan and file to the Labor Standards Inspection Office.

  • The data analysis must be published by March 30, 2023 through the company website or by another means.

Mr. Cramer discussed GE’s journey on gender pay equity and highlighted the growing expectations for pay transparency. He also shared a few considerations global employers should keep in mind while implementing a plan to close the gender pay gap:

  • Embed pay equity as a sustainable process where progress is continuously tracked;

  • Participate in a co-audit of policies/current approaches. Ensure other processes won’t cause conflicts with the gender pay equity plan;

  • Integrate into total rewards education initiatives; and

  • Aim for continuous improvement. 

Wenchao Dong

Director, Global Affairs, HR Policy Association

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Contact Wenchao Dong LinkedIn

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