Mandatory disclosure of gender pay gap starting in Japan

How would you describe an excellent work environment for everyone? You may come up with many areas for improvement by comparing the ideal with reality. Among many issues, the gender pay gap remains a problem many countries must address.

In May, the Japanese government passed the law to mandate the disclosure of the gender pay gap for companies that employ 301 or more people regularly.

Obligation to disclose gender pay gap is effective from July

The government requires approximately 17,650 businesses to disclose their gender pay gap on their websites. This rule may also apply to companies with 101 to 300 employees after its enforcement.

According to an OECD study, the median income of women in Japan is 78% of the median income of men. Japan has the third-largest gap among OECD countries.

Unconscious bias behind gender pay gap

One of the causes of the gender pay gap in Japan is the employment environment, where it is often difficult for women to keep working full-time after childbirth or during parenting. Several women leave or change their jobs to ones with more flexible hours.

The government aims to establish a system that allows women to work full-time comfortably. However, will a change in the system solve the gender pay gap?

About the gender pay gap, American Express published an interesting study a few years ago. They surveyed 63,000 employees in group companies worldwide to determine wage gaps. American Express believed that gender wouldn’t make any difference in their wages because it was only linked to job responsibilities and performance.

However, upon examination, there were differences by gender for the same job responsibilities and accomplishments. After analyzing the reasons for the inequality in detail, the company found that they reflect unconscious biases in the evaluations. In 2020, by raising lower wages, American Express achieved equal pay.

For a long time in Japan, it was the norm for women to do housework and parenting while men worked to earn money. Although both parents in many families work in recent years, there still exists a custom that women are responsible for housework and childcare.

In fact, the utilization rate of parental leave for women is about 81%. In comparison, for men it is about 12% even though Japan’s childcare leave system is highly evaluated globally because it allows men to take childcare leave for a longer time than in other countries.

Objective surveys play essential role to eliminate pay gap

Mandatory publication of the pay gap is an important step toward achieving equal opportunities between men and women as well as women’s wellness. Each company needs to investigate and objectively determine the cause, as American Express has done. Most importantly, we should be aware of our own unconscious biases to create a society where people are valued equally for their achievements and responsibilities regardless of gender.