Complying with Japan gender pay gap reporting
This article provides information on legally required pay equity reporting in Japan. It gives an overview of which employers need to take action, what the deliverables are, how to get started, and how to use the PayAnalytics software to help meet the local requirements.
In response to Japan's significant pay gap, and their standing compared to the G7, in 2021, the government has made efforts to increase female workforce participation, but progress is hindered by a lack of women in managerial roles and the prevalence of irregular, lower-paying jobs for women, the government has announced its most recent revisions to the Act on
Promotion of Women’s Participation and Advancement in the Workforce (APWPAW).
The revisions were conducted by Japan’s Ministry of Health, Labor and Welfare (MHLW), published on July 7, 2022 and for the fiscal year 2022, their revision took effect in April 2023.
In this article, we will break down the Japan Gender Pay Gaps Reporting and help you to answer four questions:
Whom does it apply to?
What are the requirements specifically to pay equity?
How does PayAnalytics help you to meet the requirement?
Which steps should you take next?
This is an attention message.
Please keep in mind that the articles in the PayAnalytics Help Center do not offer legal advice.
1. Whom does it apply to?
The reporting requirement in Japan applies to employers with 101 or more employees, with additional requirements for employers with 301 or more employees.
2. What is the requirement?
The revisions require companies to set at least one or two numerical targets, depending on the company size:
The first category is providing opportunities for female workers. For example, companies can set targets for the percentage of female workers hired, the percentage in management, or the percentage on the board of directors.
The second category relates to work-life balance. The target could for instance relate to average monthly overtime, parental leave acquisition rate by gender, or percentage of employees taking paid leave.
The requirement for companies with 301 or more employees:
The differences in pay between men and women (gender pay gap) are to be disclosed annually within three months following the end of the fiscal year. Companies are to disclose the gender pay gap in the "Status of Employees" section of their annual securities reports.
The pay gap analysis must include differences in annual wages based on specific employee groups: all workers, regular employees (full-time and permanent), and other employees (part-time and/or fixed-term). This last group is noteworthy because part-time and contract workers typically have less legal protection than regular employees.
General employer action plans must be formulated and internally disseminated. The action plans should contain the pay gap analysis along with two or more numerical targets listed in two categories (see above).
Action plans must be shared and made accessible to the general public and submitted to prefectural labor bureaus for review.
The requirements for companies with 101-300 employees:
General employer action plans must be formulated and internally disseminated. The action plans should contain one or more numerical targets, listed in two categories.
Action plans must be shared and made accessible to the general public and submitted to the prefectural labor bureaus for review.
Companies are not required to disclose the differences in pay (gender pay gap) between men and women, but this requirement might be added in the future.
In the “General employer action plan”, companies should discuss how they plan to gain an understanding of women’s empowerment in their company and analyze the key issues. The action plan must include the time period, numerical targets, the detail of the efforts, and the timing of the implementation.
3. How does PayAnalytics help you to meet the requirement?
PayAnalytics contains a built-in report for the difference in pay between men and women, matching the requirement for employers with 301 or more employees.
Preparing your dataset:
Note that a dataset containing at least the following data needs to be imported before generating the report:
Unique employee ID (mandatory for all datasets),
Gender which for reporting purposes, constitutes either male or female, which are not further defined in regulations,
Grouping variable,
Compensation,
Indication whether employees are part-time or fixed-term employees.
Generating the report:
After completing the data upload, select your dataset and head to the Report section in the left navigation bar. Click Create new report, go to Government mandated reports and select the Gender pay gap (Japan) report, as shown in the following picture:
Gender pay gaps (Japan) report localization in the application
Once selected, you will be directed to the report configuration page, where you can choose the columns to group employees by, specify the column that indicates salary, and account for any part-time employees. After completing the configuration, simply click Generate Report to generate and review your report, as shown in the following illustration:
Generating the report
4. Which steps should we take next?
Beyond generating the Gender Pay Gaps report for Japan, PayAnalytics can help you analyze and understand equity within your organization from a broader perspective. By examining your current workforce diversity, including representation across different groups and pay levels, you can gain valuable insights into workplace equity. Additionally, you can analyze the diversity in hiring and attrition to understand how your workforce is evolving over time, and even identify any demographic disparities in raises or promotions. To explore these insights further, check out our Workforce Analytics report and see how it can help you track and understand changes in your organization’s workforce. Refer to Alternative Insights article Workforce analytics to learn more.
Conclusion and next steps
If you would like further support around Japan Gender Pay Gap Reporting, please don't hesitate to reach out for assistance through the Help Center support channel or reach out to our pay equity consultants at clientservicespe@beqom.com.