Prime Minister Fumio Kishida addresses a May 20 session of a council that is working on making his pet project of new capitalism a reality. The government will soon require large companies to disclose gender wage disparities that have given Japan the worst record among the Group of Seven nations, according to Koichi Ueda.
The policy decision to further the role of women in the workplace was announced by Prime Minister Fumio Kishida at a May 20 meeting of a council working to turn his pet project of new capitalism into reality.
Kishida indicated that work would continue, so the new system will be in place this summer.
It would cover around 18,000 companies with more than 300 employees. In addition to disclosing the difference on 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 disregard this obligation or ignore 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 must choose at least 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 it will be mandatory for companies with more than 300 employees.
A labor ministry council will discuss 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. The change could be in effect from 2023, and it would require a revision to the Cabinet Office directive.
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.
There are a number of labor practices that contribute to the situation in Japan.
They note that a larger percentage of women hold down irregular jobs, which offer lower pay rates than those for workers in regular positions.
Another factor is the fact that many women tend to leave the workplace to marry or raise families, depriving them of the opportunity to acquire the seniority that is a key factor in determining wages at Japanese companies.
There is a small number of female executives with high salaries that contribute to the large wage disparity.
Major companies are beginning to reconsider the disparity issue because of the degree to which women are allowed to advance at a company. It is something that many investors look at when making decisions about where to place their money.