Japan to require large companies to disclose gender wage disparity

Prime Minister Fumio Kishida speaks at a May 20 meeting of a council working on making his pet project of new capitalism a reality. The government will require large companies to disclose gender wage disparities that have given Japan the worst record among Group of Seven nations, according to Koichi Ueda.

At a May 20 meeting of a council that is trying to turn his pet project of new capitalism into reality, Prime Minister Fumio Kishida announced the policy decision to further the role of women in the workplace.

Kishida indicated that work would continue, so the new system is in place this summer.

It would cover around 18,000 companies with more than 300 employees. In addition to disclosing the difference in remuneration between female and male workers, firms will be required to disclose the wage disparity between their regular and irregular employees.

The information will be made available through the websites of each company or through a special database set up by the labor ministry. The intent is to allow job seekers to verify wage disparity levels at companies they are interested in.

Companies that don't comply with the directives issued by regional labor bureaus will be shamed by having their names publicly disclosed.

Under the current system to promote female participation in the workplace, companies are required to choose two items from a wide-ranging list, such as their ratio of female employees, and disclose that data.

The wage disparity item will be included in the list but will be mandatory for companies with more than 300 employees.

A labor ministry council will look at the details, and ministerial directives will be revised to reflect the change.

The government is considering requiring listed companies to include the wage disparity figure in their annual financial statements. That would require a revision of the Cabinet Office directive, and the change could be in effect from 2023.

The median wage of female employees in Japan is 22.5 percent less than the median wage of male employees, the worst figure among G-7 nations, according to government documents.

Some G-7 nations have rules for disclosing gender wage disparity.

Experts attribute the situation in Japan to a variety of labor practices.

They say that a larger percentage of women hold down irregular jobs, which offer lower pay rates than those for workers in regular positions.

Another factor that is a factor in the decision to marry or raise a family is due to the fact that many women tend to leave the workplace to marry or raise their families, depriving them of the chance to gain the seniority that is a key factor in the wages at Japanese companies.

The small number of female executives with high salaries also contributes to the large wage disparity.

The degree to which women are allowed to advance at a company is something that investors look at when making decisions about where to put their money.