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Labor Shortage in Japan Means “Equal Work, Equal Pay”

Labor Shortage in Japan Means "Equal Work, Equal Pay"

The Japanese have reformed legislation that was enacted last year and will force firms to follow the principle of “equity work, equal pay” irrespective of job status of their workers. This system starts for workers beginning in April 2020. Many firms will increase wages of workers on irregular contracts to be on part with regular full-time workers who do the same work under the same conditions. These firms are adapting to the acute labor shortages and are improving conditions to ensure that they do not lose workers to competitors. 

The government has adopted a guideline – starting in December – and will be implemented that forces firms to pay those who have the same experience and the same skills to be paid equally. Currently, there are scales for pay and the full-time employee does have some advantages over others, who may very well be doing the same work. 

The courts have ruled that some regular full-time employees are receiving paid holiday, as well as other benefits that favor them, while some who are doing the same work, are paid less and have fewer holidays and benefits. Domestic companies are suffering from severe manpower shortages and there are some firms that might be using overseas labor but again, this is a sensitive topic in Japan. Businesses have promised to play a more proactive role in brining labor conditions in line with the norms of 2019. 

Each company will follow guidelines but it will be the firm`s decision on how to implement these new directives from the government. 

Team Classiarius

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