Employment Equality in Japanese Labor Law: Legal Obligations of Companies Regarding Gender and Persons with Disabilities

In modern corporate management, adherence to compliance is a fundamental element that sustains business continuity and maintains corporate value. Particularly for companies that operate globally, a deep understanding of the legal systems in each country where they do business, especially labor laws, is essential. The Japanese labor law system, with its emphasis on ensuring equality in employment, imposes strict obligations on companies. Accurately understanding these legal obligations and reflecting them in human resource and labor management is not only crucial for avoiding legal dispute risks but also for creating a workplace environment where diverse talents can thrive, thereby enhancing the company’s competitiveness. This article focuses on the core aspects of employment equality under Japanese labor law, namely gender equality and the elimination of employment discrimination against persons with disabilities. Specifically, we will provide a detailed explanation of the legal obligations that company executives and legal professionals should comply with, based on relevant laws and case law. These include the principle of equal pay for men and women as stipulated by the Japanese Labor Standards Act, the broad equal employment opportunities defined by the Japanese Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment, and the prohibition of discriminatory treatment and the obligation to provide reasonable accommodations under the Japanese Act on Employment Promotion etc. of Persons with Disabilities—four major themes that are pivotal to compliance.

The Principle of Equal Pay for Equal Work Under Japanese Labor Law

Legal Basis: Article 4 of the Japanese Labor Standards Act

In the Japanese legal framework, the most fundamental provision guaranteeing equal pay between men and women is found in the Japanese Labor Standards Act. This law governs the basic working conditions for workers, and Article 4 explicitly states, “An employer must not discriminate in wages against a worker on the basis of the worker being female.” This provision embodies the principle of “equality under the law,” as guaranteed by Article 14 of the Japanese Constitution, in the realm of employment, specifically in the concrete labor condition of wages. It aims to correct the historically existing wage gap between men and women and to improve the economic status of female workers.

Scope of “Discriminatory Treatment”

The “wages” subject to the “discriminatory treatment” prohibited by Article 4 of the Japanese Labor Standards Act are extensive. Based on Article 11 of the same act, this includes not only basic salary but also bonuses, various allowances (such as family and housing allowances), and all other forms of compensation paid by an employer to a worker, regardless of the name.

“Discriminatory treatment” includes not only treating female workers less favorably compared to male workers but also more favorably. The intent of the law is to prohibit any differences based on gender. However, this principle does not prohibit all differences in wages. Differences in wages based on reasonable factors such as the individual worker’s job duties, skills, efficiency, experience, and length of service do not fall under the discriminatory treatment prohibited by Article 4. What is prohibited is setting wage differences solely or decisively on the basis that the worker is female.

Case Analysis: The Iwate Bank Case

To understand how the principle of equal pay for equal work is actually applied, the Iwate Bank case (judgment by the Sendai High Court on January 10, 1992) serves as an important precedent.

In this case, the bank’s salary regulations were in question. The bank provided family allowances to “employees who are heads of households,” but when both spouses worked at the bank, the husband was considered the head of the household regardless of his income, and the wife, a female employee, was not given the allowance. The bank argued that the criterion of being a head of household was unrelated to gender. However, the court determined that the application of this “head of household” criterion resulted in a substantive disadvantage to female employees based on gender and concluded that it violated Article 4 of the Japanese Labor Standards Act.

This case provides important implications for corporate personnel and labor management. Even if company regulations and policies appear gender-neutral in form, there is a risk of being deemed illegal discrimination if their implementation or substantive effects disadvantage a specific gender. Companies must carefully consider not only the wording of their wage systems and criteria for allowance payments but also the actual impact they have, taking care to ensure that unintended discrimination does not occur.

Ensuring Equal Opportunities and Treatment Between Men and Women Under Japanese Law

Legal Basis: The Japanese Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment

The central law ensuring equality between men and women at all stages of employment management beyond wages is the “Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment,” commonly known as the Japanese Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment. This law prohibits discrimination based on gender in all aspects of employment, from recruitment and hiring to retirement and dismissal.  

Prohibition of Direct Discrimination

Articles 5 and 6 of the Japanese Act on Securing, Etc. Equal Opportunity and Treatment between Men and Women in Employment explicitly prohibit discriminatory treatment based on gender. The specific acts that are prohibited are detailed in guidelines issued by the Ministry of Health, Labour and Welfare, and companies must strictly refrain from engaging in these behaviors.  

In recruitment and hiring, it is forbidden to exclude one gender from the pool of candidates (e.g., “Sales positions are open to men only”), to set different hiring conditions for men and women (e.g., requiring women to be unmarried), or to ask only female candidates about their plans for marriage or childbirth during job interviews.  

In terms of placement, promotion, and education/training, typical violations include limiting certain job roles (e.g., core business operations) to men and assigning women only to support roles, changing promotion criteria based on gender, and denying one gender the opportunity to participate in training programs for managerial positions.  

Regarding welfare benefits, it is also not permitted to set different conditions for men and women in measures such as housing loans or financial assistance for living expenses.  

Furthermore, discrimination based on gender is strictly prohibited in situations related to the termination of employment relationships, such as encouragement to retire, retirement age, dismissal, and renewal of labor contracts. For example, targeting only women for retirement recommendations during business rationalization or setting different retirement ages for men and women is illegal. There was once a practice of setting different retirement ages for men and women, but the courts have ruled that such discrimination is against the public order and morals stipulated in Article 90 of the Japanese Civil Code and is therefore invalid (e.g., Supreme Court decision on March 12, 1979 (1980)).  

Prohibition of Indirect Discrimination Under Japanese Employment Law

In addition to direct discrimination, the Japanese Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment (1985) also prohibits a more subtle form of discrimination known as “indirect discrimination.” As defined in Article 7 of the Act, indirect discrimination refers to measures that, while not explicitly based on gender, result in a considerable disadvantage to one gender and lack a reasonable justification. This provision is personalityized by its focus on the “impact” of a company’s policies, regardless of whether the intent behind them is discriminatory.  

Currently, under the Ministry of Health, Labour and Welfare Ordinance, the following three measures are specifically identified as potentially constituting indirect discrimination:  

1. Requiring a certain height, weight, or physical strength in the recruitment and hiring of workers.
2. Requiring the ability to relocate, which involves moving to a different residence, in the recruitment and hiring, promotion, or change of job type of workers.
3. Requiring experience in relocation for worker promotion.

For example, consider a nationwide company that imposes the requirement of “experience in relocation involving a move” as a criterion for managerial promotion. While this requirement does not explicitly concern gender, it may be more challenging for women, who often bear a greater responsibility for childcare and caregiving within the family, to meet this criterion compared to men. If the company cannot prove that having relocation experience is genuinely essential for performing managerial duties, this requirement could be deemed illegal indirect discrimination. Thus, companies are constantly required to re-evaluate their traditionally accepted personnel policies for their rationality and the unequal impact they may have on different genders.

Prohibition of Disadvantageous Treatment Based on Marriage, Pregnancy, Childbirth, etc., Under Japanese Law

The Japanese Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment (often referred to as the Gender Equality in Employment Act) provides strong protection, particularly for female workers who are susceptible to disadvantageous treatment based on marriage, pregnancy, childbirth, etc., as stipulated in Article 9. Specifically, it prohibits dismissal or other disadvantageous treatment of female workers for reasons such as getting married, becoming pregnant, giving birth, or taking legally mandated maternity leave.  

“Disadvantageous treatment” includes not only dismissal but also demotion, salary reduction, disadvantageous job transfers, and non-renewal of contracts (employment cessation).  

Of particular note is the provision regarding the dismissal of pregnant workers and those who have not passed one year after childbirth. Such dismissals are deemed invalid unless the employer can prove that the dismissal is not based on pregnancy or childbirth, etc. This shifts the burden of proof to the employer and represents a very strict regulation. When dismissing a female worker during this period, the company must be extremely cautious and able to objectively prove that the dismissal is completely unrelated to pregnancy or childbirth.  

Prohibition of Discriminatory Treatment Against Persons with Disabilities

Legal Basis: The Japanese Act on Employment Promotion of Persons with Disabilities

The fundamental law ensuring equal employment opportunities for people with disabilities is the “Act on Employment Promotion etc. of Persons with Disabilities,” known as the Japanese Act on Employment Promotion of Persons with Disabilities. Following a legal revision in 2013, from April 1, 2016 (Heisei 28), it became a legal obligation for employers to prohibit discrimination based on disability in the field of employment.

This law prohibits discrimination in recruitment and hiring under Article 34, and discrimination in wage determination, implementation of education and training, use of welfare facilities, and other treatments under Article 35. These provisions apply to all employers regardless of the size or type of their business.

Specific Examples of Prohibited Discriminatory Treatment

The “discriminatory treatment” prohibited by the law refers to unjustly depriving employment opportunities or setting unfavorable working conditions solely based on the presence of a disability. Specifically, the following actions are prohibited:

At the stage of recruitment and hiring, it is prohibited to reject an application solely because of a disability or to require abilities that are not essentially necessary for the performance of the job (for example, demanding a driver’s license from a wheelchair user applying for an office position), thereby effectively excluding persons with disabilities.

After hiring, setting lower wages for workers with disabilities compared to non-disabled workers doing the same job, solely based on the disability, or uniformly excluding them from opportunities for pay raises and promotions, constitutes clear discriminatory treatment. Similarly, it is prohibited to assign only auxiliary tasks without considering the abilities and aptitude of persons with disabilities or to deny them the opportunity for education and training that other employees receive.

However, measures aimed at actively hiring persons with disabilities, such as job postings exclusively for persons with disabilities, are recognized as “positive action” intended to correct discrimination and are not considered discrimination prohibited by the law.

Obligation to Provide Reasonable Accommodation for Persons with Disabilities Under Japanese Law

The Definition and Obligation of “Reasonable Accommodation” Under Japanese Employment Law

The Act on Employment Promotion of Persons with Disabilities in Japan goes beyond the passive duty of non-discrimination (duty of inaction) and imposes a more proactive duty (duty of action) on employers. This is the obligation to provide “reasonable accommodation,” as stipulated in Article 36-2.

“Reasonable accommodation” refers to the necessary and reasonable modifications and adjustments that an employer must make according to the individual personalityistics and circumstances of a worker’s disability. This ensures that workers with disabilities have equal opportunities and can effectively utilize their abilities, thereby removing workplace barriers (barriers) caused by disabilities.

The scope of accommodations that should be provided is diverse. For example, the following can be mentioned:

• Physical environment considerations: Adjusting desk heights for wheelchair users, removing obstacles in passageways, and installing ramps.
• Communication considerations: Introducing screen readers (screen reading software) for workers with visual impairments, using written communication or sign language interpreters during meetings with workers who have hearing impairments.
• Flexible changes to rules and practices: Creating easy-to-understand work manuals with diagrams and pictures for workers with mental or developmental disabilities, allowing flexible working hours for medical appointments, and providing quiet rest areas to alleviate sensory overload.

Exceptions to Obligations: “Undue Hardship”

The duty to provide reasonable accommodations is not unlimited. Under Japanese law, there is no obligation to provide such accommodations if they would impose an “undue hardship” on the employer.

What constitutes an “undue hardship” is objectively determined on a case-by-case basis, taking into account the following factors:

• The extent of the impact on business operations (whether it significantly impairs production activities or service provision)
• The feasibility of the accommodation (physical and technical constraints, human and systemic limitations)
• The cost and burden of the accommodation in relation to the financial status of the company
• The size of the company
• The availability of public support (such as subsidies) for implementing the measure

It is crucial to understand that even if a specific accommodation requested by a worker with disabilities is deemed an “undue hardship,” the company’s obligation does not end there. In such cases, the company must explain to the individual why the accommodation cannot be provided and engage in a thorough discussion to explore alternative accommodations that may impose less burden. This process of “constructive dialogue” is itself part of the obligations required by law. If a company unilaterally refuses to provide an accommodation and neglects this dialogue process, it could be evaluated as a failure to fulfill legal obligations. Therefore, when a request for accommodation is received, companies must establish an internal process to engage in sincere dialogue and seek solutions.

Comparison of Prohibition of Discrimination and Reasonable Accommodation

Two key legal obligations for companies regarding the employment of persons with disabilities in Japan, “Prohibition of Discriminatory Treatment” and “Duty to Provide Reasonable Accommodation,” are closely related yet distinct in nature. Understanding these differences accurately is essential for establishing an appropriate compliance framework.

As the table illustrates, “Prohibition of Discrimination” demands that all individuals, regardless of disability, are placed at the same starting line. On the other hand, “Reasonable Accommodation” requires providing individual support, such as installing ramps, when standing at the starting line itself is challenging, to enable participation in the competition. Only by fulfilling both of these obligations can a company truly achieve the employment equality sought by the law.

Summary

As outlined in this article, Japanese labor law imposes a wide range of legal obligations on companies to ensure equality in employment. The strict principle of equal pay for men and women under the Japanese Labor Standards Act, the comprehensive prohibition of direct and indirect discrimination set forth by the Japanese Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment, and the dual obligations of non-discrimination and the provision of reasonable accommodations required by the Japanese Act on Employment Promotion of Persons with Disabilities are all critical compliance items that cannot be ignored in modern corporate management. Adhering to these regulations not only manages legal risks but also lays the foundation for creating a fair and productive workplace environment where individuals with diverse backgrounds can fully utilize their abilities.

At Monolith Law Office, we have a proven track record of advising a multitude of domestic and international clients on complex legal issues such as those explained in this article. Our firm includes several English-speaking attorneys, some of whom are qualified in foreign jurisdictions, enabling us to provide smooth and professional support when global companies navigate the complex demands of Japanese labor law. We are fully prepared to assist with verifying the legality of your company’s HR policies, addressing individual employment issues, and mitigating legal risks in Japan.