Provisional Translation

Guidelines for Integrated Three-Pronged Labor Market Reforms
May 16, 2023
Council of New Form of Capitalism Realization
1. Basic Concept○ The way we work has changed significantly. We are moving from an era in which "careers are
given by companies" to an era in which "each individual chooses their own career." It is importantthat we shift to a system which allows workers to re-skill of their own will and to choose theirjobs by clarifying the skills required for each job. By doing so, it will be possible to seamlessly
connect the internal labor market and the external labor market, thereby opening the door to hiringexperienced workers from outside a company and enabling workers to freely move both insideand outside of their company according to their own choice. This is also an urgent matter for thefurther growth of Japanese companies and the Japanese economy.
○ Wage levels in Japan have been stagnant for a long period of time (looking at the change in real
wages per person in developed countries, from 1991 to 2021 the wage level increased by 1.52
times in the U.S., by 1.51 times in the U.K., by 1.34 times in France and Germany, and by 1.05
times in Japan). During this period, companies have not invested enough in people, andindividuals have not engaged in adequate self-development.
○ New trends such as GX and DX will also greatly change required skills and labor demand. As weenter the era of 100-year lifespans, working periods are becoming longer, and, with the cycle ofrise and fall in various industries progressing in short periods of time, everyone will need to workto acquire new skills throughout their lives. On the other hand, it has also been pointed out that,in reality, many working individuals tend to take a passive attitude and become comfortable intheir current situation.
○ Behind this problem lies the employment system in Japan that formed after World War II, such as
the seniority-based wage system. Jobs and the skill standards required for them are also unclear,so objectivity and transparency in evaluations and wages are not sufficiently ensured. Because it
is difficult for individuals to understand how they will be rewarded for their efforts, in addition to
low engagement it is difficult for them to change jobs, and, even if they do change jobs, it isdifficult for this to lead to an increase in their salary. Additionally, even if individuals are
motivated, fairness in access to opportunities to improve their skills and to learn is not sufficiently
ensured.
○ In the face of labor supply constraints due to the declining population, it is necessary to reform
this system to create a society in which individuals who wish to do so, irrespective of employment
status, age, gender, or disability, while understanding the future labor market situation and theworking style options within it, can choose their own living and working styles and can voluntarily,
proactively learn and be rewarded for improvement of their treatment via promotions or salary1raises within their company or by changing to a job at a different company, and furthermore
realization of labor mobility for startups, etc.
○ There is no time to wait for change from the corporate side either. As companies have not been
investing enough in people, the wage gap with other countries has been widening, and in thecompetition for human resources there is a risk that Japan will fall behind not only amongdeveloped countries, but also in Asia. An increasing number of companies are introducing jobbased personnel systems from the perspective of competition to acquire human resources,
primarily in industries and companies that are competing in the global market, but they are notdoing so sufficiently quickly, and, with the recognition that human capital is the key to improving
corporate value, it is necessary to urgently respond to change and to drastically strengthen
investments in people.
○ In this kind of transformation, the relationship between workers and companies will change to
one of "choosing and being chosen," with both sides on equal footing. With each individual taking
a leading role and with the cooperation of the public and private sectors, it will be necessary tochange from an era in which careers are provided by companies to an era in which each individual
builds their career as they wish.
○ To this end, we will carry out an integrated three-pronged labor market reform: supporting skill
improvements through re-skilling, introducing job-based wages according to the actual conditionsof individual companies, and facilitating the transfer of labor to growth fields. It is imperative thatcompanies shift to an employment system that ensures objectivity, transparency, and fairness, andin this way, we will create a mechanism that structurally increases wages.
○ Additionally, in order to implement structural wage increases, the key will be the responses of
local governments and small and medium-sized enterprises (SME) and small businesses, which
account for 70% of Japan's employment and GDP. In parallel with this integrated three-pronged
labor market reform, just as there was a basic agreement at the March 15 exchange of views
between the government, labor, and management, we will share throughout society the idea that"in order to raise wages at SMEs and small businesses, it is essential to optimize transactions byappropriately passing on labor costs," and will also be necessary to secure funds for wage
increases and to thoroughly implement price pass-through measures to realize a virtuous cycle ofgrowth and wage increases.
○ In addition to this, through these efforts and efforts to support productivity improvements, we willtake measures to address regional labor shortages and to raise the minimum wage so that working
individuals can live with peace of mind.
○ An internationally competitive labor market will be created through bold efforts by the public andprivate sector to implement these reforms.
22. Goals○ By promoting an integrated three-pronged labor market reform, through structural wage increases
and while taking into account differences in economic conditions in each country, we aim tonarrow the wage disparity that exists between Japanese and foreign companies despite the factthat they are doing the same job. In addition, we aim to eliminate wage disparities due to factors
such as gender and age.
○ In the case of Japan, a comparison of wages before and after job changes shows that wages tend
to decrease after individuals change jobs. As such, through the formation and seamless connectionof internal and external labor markets, we aim to have the proportion of individuals whose wages
increase due to a job change exceed the proportion of those whose wages decrease.
○ The public and private sectors will confirm the progress of these initiatives and move forwardwith reform efforts.
3. Direction of the Guidelines○ In promoting this integrated three-pronged labor market reforms, it is important, as a prerequisite,
to ensure and expand the functions of the employment safety net, including re-skilling support
during employment and strengthening consulting and advisory functions, etc., and, while utilizing
the power of the private sector, the public and private sectors must work together to strengthen reskilling and matching functions. In doing so, the following three perspectives are important.
1) Only when the internal labor market is revitalized through personnel and wage system
reforms within companies will the external labor market (that is, the labor market as a whole)also be revitalized. Based on the recognition that human capital is the key to improving
corporate value and according to the actual conditions of individual companies, with thereview by labor and management of personnel and wage systems within companies will bepositioned at the core of the reforms, and in addition to gradually dispelling concerns aboutlabor mobility, through measures such as drastically strengthening investments in people wewill increase the number of companies that attract human resources who will return to themin the future, even if they change jobs at some point.
2) Amidst the changing realities of employment practices in Japan, these reforms are an attempt
to achieve structural wage increases while preserving employment stability for working
individuals in a new way. From the standpoint of working individuals, we will ensure theprovision of diverse careers and choices in treatment as an employee by ensuring smoothlabor mobility.
3) These reforms will also lead to growth opportunities for SMEs and small businesses. If, forexample, personnel systems within large companies become more flexible, then experiencethrough secondment to SMEs and small businesses for a certain period of time, side jobs, andmultiple jobs will come to be objectively recognized as skills. Human resource exchanges
between large companies and SMEs and small businesses will become even more active,3

leading to human resources support for SMEs and small businesses in regions facing labor
shortages. In conjunction with this, by thoroughly taking measures to pass on labor and othercosts, we will take all possible measures to ensure that the earnings of SMEs and small
businesses and that this will lead to wage increases. Additionally, by enhancing support for
re-skilling, etc., we will cut off the negative spiral in which economic disparities create
educational disparities, and this will then lead to the creation of a society in which everyone
can find a sense of purpose in their life.
○ Based on the above perspectives, the following reforms will be promoted as an integrated threepronged approach.
1) Support for improving abilities through re-skilling
2) Introduction of job-based wages according to the actual conditions of individual companies
3) Facilitation of labor movement to growth fields○ In conjunction with this, respect for diversity and correcting disparities will be prioritized, and wewill promote integrated efforts to raise the minimum wage, ensure proper transactions by passing
on labor costs, enforce equal pay for equal work between regular and non-regular workers,
improve the environment the re-skilling of workers at SMEs and small businesses, and enhancecareer education.
○ In doing so, because some of these reforms require time, the public and private sectors will confirm
their progress at regular intervals, and systemic reviews will be conducted while sharing timelines.
○ In addition, because the response to these reforms is expected to greatly differ by industry sector,
fine-tuned responses will be made in cooperation with the ministries and agencies overseeing eachindustry.
4. Support for Improving Abilities through Re-skilling(1) Expanding Direct Support for Individuals○ 75% of the government's re-skilling support measures for currently employed workers are mainly
via companies (77.1 billion yen (human resources development support subsidies, public
vocational training (training for currently employed workers), and operational cost grants for the
Human Resources Productivity Support Center)) and 25% is done via individuals (23.7 billion yen
in educational training benefits). In order to enable working individuals to make their own choices,within five years and while verifying the effects, we will make it possible for more than half of reskilling benefits to be provided directly to individuals and increase the ratio of currently employedworkers who are taking re-skilling courses.
○ In doing so, and based on the experience in developed countries that re-skilling subjects can beapplied regardless of industry while still being effective for workers' medium- to long-term careerdevelopment, more emphasis will be placed on off-the-job-training, including training courses run
by private educational companies and degree conferment programs run by universities, where
skills can be proven regardless of industry or company.
4

○ The use of digital certification and display systems ("open badges") will be encouraged as a way
to help visualize the history of skills acquired by individuals, regardless of their industry orcompany.
○ With regard to educational and training benefits for employment insurance, in fields where highwages can be obtained and fields where high employability is expected to improve (IT, data
analytics, project management, technical research, sales/marketing, management/planning, andtourism/logistics, etc.), consideration will be given to expanding the subsidy rate and subsidy
upper limit when individuals enroll in re-skilling programs, as well as to designing specific reskilling systems.
○ In particular, with regard to the portion of re-skilling programs that will be enhanced this time,
Hello Work and vocational training schools, etc. will confirm in advance the appropriateness of
their content for re-skilling so that workers (including currently employed workers) can, while
receiving consultations, appropriately select the content and method for taking re-skilling
programs according to their own know-how, skills, and intentions.
The role of career consultants will be strengthened, and, in the future, consideration will be given
to whether or not some career consultants in the private sector will also take on the role ofconfirming the appropriateness of support measures.
○ Efforts will be made to utilize online systems to streamline the procedures for receiving educationand training benefits.
○ We will also review the content of support measures for re-skilling via companies, and consider
enhancing those for which it is necessary. In doing so, we will provide re-skilling support for nonregular workers, etc., who have few opportunities for training within companies, by utilizing
flexible dates and implementation methods that make it easy to learn while working and that leadto career advancement according to the individual's wishes. Freelancers will also be provided withflexible and diverse training opportunities.
○ As part of efforts to achieve the new target of 500,000 Japanese students studying abroad by 2033,
we will encourage working adults to study at overseas graduate schools, which has been sluggish
in recent years. In doing so, we will take into consideration the fact that there are time constraints
for individuals who are currently working and we will promote efforts for online study abroad.
(2) The Necessity of Strengthening Investment in Japanese Companies' Human Resources○ Japanese companies' investment in human resources (excluding on-the-job-training) remained at
0.1% of GDP from 2010 to 2014, which is a level that is lower than that of developed countries
such as the U.S. (2.08%) and France (1.78%). And, in recent years, it has been on a downward
trend. As population decline intensifies labor supply constraints, companies that do not invest in
their people will find it increasingly difficult to attract talented human resources, which will
directly lead to a weakening of their corporate value and competitiveness.
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○ On the other hand, the experiences of other countries shows that companies that fully invest in
their people do not see an increase in turnover, but rather they are able to attract talented people
because those people have the opportunity to nurture themselves.
○ For this reason, it is important to keep in mind that companies themselves need to strengthen reskilling support for working individuals.
(3) Follow-Up and Review of the "Investment in Human Capital" Policy Package○ Based on these guidelines, we will follow up on the implementation status of the package eachfiscal year so that each of the package's support measures will be easier for workers to use, andthe results will be reflected in the budget for the following fiscal year.
○ Together with this, we will measure and analyze the effects on post-re-skilling improvements inthe treatment of employees and internal and external promotions and appointments, and then use
this information to improve measures.
(4) Review of Employment Adjustment Subsidy○ The current employment adjustment subsidy is a system that subsidizes the costs of employment
adjustments in the form of educational training, secondment, or absence from work(subsidizes
1/2 of the costs for large companies and 2/3 of the costs for SMEs and small businesses. In thecase of employment adjustments through educational training, an additional 1,200 yen per person
per day is provided).
○ Although this program has played an important role as a measure to maintain employment in theface of rapidly worsening economic conditions such as the Lehman’s collapse and the COVID19 pandemic, it has been pointed out that if the subsidy continues for a long period of time , it
may hinder the maintenance and improvement of workers' job skills and the smooth transition ofworkers to growing fields.
○ Therefore, in order to strengthen re-skilling of currently employed workers, we will conduct a
review of the subsidy rate, etc. so that it will be easier for employers to choose employment
adjustment through educational training rather than through absence from work. In the current
system, the benefit period of educational training or absence from work is up to 100 days in a one
year period and up to 150 days in a three year period. For example, if the employment adjustment
exceeds 30 days, then, as a general rule, educational training will be required, and in exceptional
cases where employment adjustment is made after that date through absence from work, we willconsider lowering the subsidy rate or otherwise revising the subsidy.

6(5) Expansion of Accredited Courses in Digital Fields, etc.
○ The number of digital-related courses (179 courses (as of April 2023)) in professional practiceeducation and training benefits will be expanded to more than 300 courses by the end of FY2025
in order to strengthen re-skilling in digital fields. In doing so, we plan to enhance courses related
to fields that are expected to grow in the future, such as generative AI, and that are in line withthe current era.
(6) Flexibility in the Mechanism for Deducting Re-skilling Expenses in Employment Income
Deductions○ The mechanism for deducting re-skilling expenses in employment income deductions (special
expenditure deductions) has been revised so that not only the employer, but also career consultants,
can provide proof that the re-skilling is related to job duties. Further flexibility in the system will
be considered while monitoring the utilization status of the new system.
5. Introduction of Job-Based Wages According to the Actual Conditions of Individual Companies(1) Introduction of Job-Based Wages that Suit the Actual Conditions of Individual Companies○ Through structural wage increases via the introduction of job-based wages that match the actual
conditions of individual companies, we will aim to reduce the wage disparity that exists between
Japanese and foreign companies for the same job, while taking into account the differences in
economic conditions in each country.
○ Within the next year and for the purpose of securing job-based wages for personnel at Japanesecompanies, we will develop case studies and present a variety of models to serve as references
for individual companies to refer to when introducing systems for the following: methods fororganizing and bundling jobs; personnel placement, training, and evaluation methods based onthese; posting systems; re-skilling methods; employee performance improvement plans (PIP);
wage systems; current legislation and judicial precedents about changes in working conditions;and leave systems, etc. In doing so, because the actual conditions of individual companies differ,
the reforms will have a degree of flexibility so that they can be adapted to the actual conditions atcompanies. Examples of SMEs and small businesses will also be introduced.
Additionally, when introducing job-based personnel (job-based wages), it is also possible tointroduce and apply them sequentially, considering not only skills, but also individual
performance and aptitudes.
○ Hereafter, these guidelines will present several examples of introductions, and also, in order topresent more diverse models, a subcommittee composed primarily of private sector practitioners
will, by the end of the year, compile a collection of case studies so that companies can concretely
refer to them.
(2) Ensuring Transparency of Salary and Employment Systems○ We will continue to disclose information in order to make the concept and status of salary andemployment systems visible to the capital and labor markets.
7○ In addition, the "Human Capital Visualization Guidelines " (formulated in August 2022), which
are used as a reference when companies make descriptions in their annual securities reports andintegrated reports, etc., will be revised by the end of the year based on the contents of theseguidelines.
(3) Introduction of Some Examples○ This section presents some examples of companies that are introducing job-based wages (jobbased personnel).
○ Purpose of introducing job-based wages (job-based personnel)"As overseas markets expand, in order to explore the needs of global society and customers andto provide services and solutions that resolve these issues, we need (1) growth-oriented humanresource management for both the organization and individuals through job-based systems, (2)allocation and recruitment of human resources from both inside and outside the company using
job descriptions, and (3) re-skilling using jobs." (electronics manufacturer H)"As a means for us to change from an IT company to a DX company, we have to move awayfrom a seniority-based personnel system and system to a job-based system that allows us to assign
the most appropriate personnel in order to realize an organizational design based on businessstrategy." (electronics manufacturer F)"In order to establish a globally competitive organization, through a job-based system we have to(1) appeal to outstanding external human resources, (2) shift to strengthening expertise in humanresources development, and (3) promote autonomous career development through visualizationof their career plan options." (cosmetics manufacturer S)○ Personnel Placement, Training, and Evaluation Methods"Individual job descriptions are made available to all employees, and the appropriate person is
assigned to the job based on discussions on such as "Who amongst our currently employees,
candidates (both internal and external) and applicants should we assign?" and "What are thespecific and objective reasons for placing them as the most suitable person?
By clarifying and publicizing the skills required for positions, (1) employees themselves canbecome aware of gaps between their current situation and the necessary skills/experience, (2)employees can formulate re-skilling plans in consultation with their supervisor to fill in thesegaps, and (3) employees can engage in re-skilling of their own initiative. In addition, by
establishing a certificate system for jobs such as 'digital jobs,' we foster an awareness amongst
the employees themselves of continuous learning.
For managers we have shifted from a uniquely Japanese compensation system that is tied topeople (abilities) to a compensation system that is tied to jobs (duties) and that is shared by theGroup both domestically and overseas, and employees' treatment has been determined by thecontent of their job and their performance (outcomes/behavior)." (electronics manufacturer H)"After reviewing our seniority-based personnel system and mapping all employees by job type8

and role, we are utilizing a posting system to optimally allocate human resources for each job
based on detailed job descriptions that were created for each individual position.
A system (1-on-1 meeting with supervisors and career coordinators) has been established so that
employees can consult about their careers and re-skilling content. Additionally, the re-skilling
method has also been changed from a focus on uniform training for each rank to instead focus on
on-demand education, wherein the content can be selected according to the employee's own
characteristics and desired job.
We have reviewed the ability-based compensation system, and for management positions thecompensation tied to the job has been reflected in their individual compensation as well. For
general employees we have set a more detailed salary range than before for each job responsibility
based on a benchmark of compensation levels in the external labor market so that evaluations
based on the employee's contributions and behavior are easily reflected in their compensation."(electronics manufacturer F)"Instead of regular, company-initiated transfers across job categories, personnel transfers are
essentially made within the same job category with an emphasis on strengthening expertise, anda posting system is used for transfers between job categories. Personnel who wish to be part ofthe management team in the future are expected to volunteer for postings and to gain experiencein multiple positions.
After clarifying the skills and expertise required for each job (duties), through career workshops
for all managers and career-track employees, goal-setting and evaluation processes, we have each
employee formulate a medium- to long-term career plan and then conduct re-skilling based onthat plan. An employee's supervisor helps them to formulate their career plan.
Individual goals corresponding to the outcomes and behavior expected of the job(duties) are set
in advance in consultation with the employee's superior, and then each employee's evaluation isdetermined according to the degree of achievement and reflected in their treatment." (cosmetics
manufacturer S)○ Posting System"Via job descriptions, we clarify the content of duties required for positions that we are recruiting
for and the skills that are required for those duties, and then we have simultaneous recruitment
from both within the Group and via recruitment of experienced hires. For in-house humanresources, the skills, qualifications, experience, and career wishes of personnel are visualized inadvance and within the scope of individuals' consent, and then matching is performed in light of
the job description." (electronics manufacturer H)
With a focus on transfers and promotions for executives through postings, and as a result ofsignificantly strengthening our posting system (such as by having all newly appointed section
manager positions being promoted via postings rather than via recommendations by superiors,and by expanding the scope of postings to be global), in three years 25% of our domestic
employees applied for a posting. For employees who do not pass, we always give them feedback
on what points they were lacking in, and have them use it to develop their own careers."(electronics manufacturer F)
9"When vacancies become available, we recruit personnel through postings within the company
as needed, and conduct personnel transfers based on the employee's own wishes, including labortransfers between occupations within the company." (cosmetics manufacturer S)○ Methods for Introducing Job-Based Wages (Job-Based Personnel)"When defining jobs (creating job descriptions), we referred to globally standardized job
definitions held by globally active external human resources consulting companies, and thenadjusted them for our company, which let us have a quick transition." (electronics manufacturer
H, electronics manufacturer F, cosmetics manufacturer S)○ Sequential Introduction"We introduced the system for managers from 2014. In 2020 we created job descriptions for alljobs and at all levels, and then from July 2022 we introduced the system for all employees."(electronics manufacturer H)"We introduced the system for managers from 2020. From 2022 we introduced the generalsystem." (electronics manufacturer F)"We introduced the system for managers from 2015. From 2021 we introduced the generalsystem." (cosmetics manufacturer S)○ Examples of Performance and Behavior Appropriateness Considerations
We base our evaluations on performance and behavior appropriateness, such as 'Doing what isright for yourself and others without hesitation,' 'Moving fast and learn from failure to succeed,''Empathize with customers and collaborate to create innovation,' 'Be respectful, actively speak
up, and listen to others' opinions,' 'Voraciously seek growth for yourself, for others, and for theorganization.'" (electronics manufacturer H)"We expect roles to proactively promote research and development of innovative technologies tosolve problems while also cooperating with teams and related departments based on accurately
grasping the latent needs and essential issues of society and companies." (electronics
manufacturer F)"Able to define/propose problems and take responsibility for implementing solutions", and"Absorbs a wide range of knowledge/experience, and has a desire to improve expertise as aprofessional." (cosmetics manufacturer S)
6. Facilitating the Movement of Labor to Growth Areas(1) Revision of the Unemployment Benefits System○ Looking at the unemployment benefit system from the perspective of facilitating labor movement
via an employee's choice, if a person leaves their job for personal reasons then they cannot receive10unemployment benefits for two or three months after applying for a job, which is different fromthe requirement for when the employee leaves their job at the discretion of the company. We will
make specific designs to relax the requirements for instances where an individual leaves a job
because of their own circumstances, such as treating cases where the applicant has been engaged
in re-skilling within, for example, one year from the time of application for unemployment
benefits as if it were a case of leaving their job at the discretion of the company.
(2) Review of retirement income tax system○ With regard to the taxation of retirement income, the deduction per year of service is increased
from 400,000 yen to 700,000 yen after 20 years of service, and it has been pointed out that thishas hindered the facilitation of labor mobility at an individual's discretion. We will review thistaxation system, paying attention to the impact of system changes.
○ With regard to iDeCo (Individual Defined Contribution Pension Plan), which allows individuals
to contribute and manage their own contributions and to take their pension assets with them when
they change jobs, a conclusion regarding raising the contribution limit and the upper age limit forstarting to receive benefits should be reached in conjunction with the fiscal verification of the
public pensions in 2024.
(3) Removing Barriers to Voluntary Retirement○ For private companies as well, it may be necessary to review labor practices, such as reducing
retirement benefits in the case of voluntary retirement in some companies, and not paying
retirement benefits if the number of years of service and age is below a certain standard.
○ One of the reasons for this is that it has been pointed out that the "The Model Rules of
Employment" established by the Ministry of Health, Labour, and Welfare stipulate restrictions
on retirement allowances based on length of service and that the treatment of voluntarily retirees
differently from those of company retirees, and as such the Model Rules of Employment will berevised.
(4) Sharing Public-Private Information on Recruitment, Job-Seeking, and Career Advancement○ In order to facilitate the smooth movement of labor to growth sectors, we will establish a system
to process, consolidate, and share basic information held by the public and private sectors on job
seeking and job offers, and career consultants (currently 64,000 people) will be able to provide
consultations on career development and job changes to workers based on this basic information.
○ Therefore,
1) Job opening/job seeking information held by Hello Work will be processed and consolidated,
2) Of the job offer information that is held by private human resources companies, the numberof job openings, wage trends (for recruitment), and the required skills for each job type and11region will be anonymized and aggregated, and the method for doing so will be considered at
the Japan Association of Human Resource Services Industry.
3) Information will be consolidated from private councils and Hello Work, etc., and basic
information will be provided to career consultants who meet certain requirements.
4) In the public sector, Hello Work will strengthen its consulting functions, such as bystrengthening the structure of its career consulting department, and will strive to enhancecontinuous consultation support from the time of employment.
○ These efforts will enable career consultants who work in the public and private sector and meetcertain requirements to provide advice and consultations based on objective data on job changes
and career advancement to currently employed workers and job seekers who are considering
career advancement in each job category and region, similar to how it is done in Denmark andother countries as part of flexicurity.
* In Denmark, the government collects objective indicators such as wages and job openings from the private sector
and specifies the outlook for each occupation every six months in the form of green, yellow, and red. Danish
caseworkers use this as a guide to help workers move to better jobs. Workers also receive consultations fromcaseworkers when they are paid subsidies such as unemployment benefits. Caseworkers have a variety ofbackgrounds, but individuals who have IT skills and who have undergone re-skilling for guidance are selected.

○ As for the public vocational training system, in addition to promoting greater efficiency for
operators of private education and training businesses by bringing applications online andutilizing employment data from Hello Work, we will promptly introduce a mechanism for directly
hearing the opinions of on-site private education and training business operators.
○ Additionally, we will consider methods for supplementing and comparing wages before and after
changing jobs for occupations recommended by Hello Work. On top of this, we will improve theoperation of the system so that recommendations are made that take into account the possibilityof wage increases before and after changing jobs, and the possibility of further increases according
to the individual's skill level.
○ In order for job seekers to consider SMEs and small businesses as one of their options, we willconsider how career consultants can effectively provide job seekers with qualitative information
about the strengths and attractiveness of individual SMEs and small businesses.
(5) Encouraging Side Jobs and Multiple Jobs
○ Side jobs and multiple jobs will be encouraged as a starting point for the smooth movement oflabor to growth fields. To that end, a trial environment will be developed so that individual
workers can transition to new careers with peace of mind, such as support for companies that
accept people for side jobs/multiple jobs and for companies that send their own employees out
for side jobs/multiple jobs.
(6) Development of Information Infrastructure Related to the Ministry of Health, Labour and Welfare12○ We will work to enhance the functionality and promote the use of the workplace information
website (Shokubalabo ("Workplace Lab")) operated by the Ministry of Health, Labour andWelfare. In addition, we will enhance the functionality of the Japanese version of O-NET (jobtag) and improve convenience for users with diverse attributes.
7. Respecting Diversity and Correcting Disparities(1) Minimum Wage
○ Last year, the minimum wage was raised to a record high, and this year the Minimum Wage
Council (consisting of individuals representing the public, capital, and labor sectors) will be asked
to have thorough discussions, including on achieving a national weighted average minimum wageof 1,000 yen per hour.
○ In addition, in order to correct regional disparities, the ratio of the minimum amount to the
maximum amount of the minimum wage will be increased.
○ After this summer, the policy for raising the minimum wage after reaching 1,000 yen per hour
will also be discussed at the Council of New Form of Capitalism Realization.
(2) Improving the Environment for Wage Increases at SMEs and Small Businesses, etc.
○ In order for SMEs and small businesses to raise wages, it is essential to support price pass-throughmeasures and productivity improvements to realize a virtuous cycle of growth and wage increases,
and through these efforts we will be able to prevail against regional labor shortages and in theinternational competition to acquire human resources.
○ Promoting Appropriate Price Pass-Through Measures and Proper Subcontracting Transactions
In order to realize wage increases for SMEs and small businesses, it is essential to optimize
transactions by appropriately passing on labor costs, and it is necessary to establish an appropriate
practice of passing on higher prices to the entire supply chain, including the securing ofappropriate resources for increasing wages that will not lose out to rising prices. To this end, we
will do further efforts to implement measures for pass-throughs and on optimizing subcontracting
transactions. On the issue of passing through labor costs in particular, the government, with thecooperation of the Japan Fair Trade Commission, will conduct a fact-finding survey for eachindustry and, based on these findings, will draw up guidelines by the end of the year on how laborcosts should be passed through. We will also request industry associations to revise andthoroughly implement their voluntary action plans.
○ Promoting Productivity Improvement Support Measures for SMEs and Small Businesses
In order to realize wage increases in SMEs, we will be strengthening efforts in preferential
treatment for companies with higher wages in tax systems and subsidies, and support for
productivity improvement through subsidies for replacing facilities and business restructuring,etc. In doing so, further measures, including the tax system, will be considered after sorting out
13the issues in order to promote wage increases even at corporations that are losing money.
In addition, with reference to the "Mikata" project that was conducted in the automotive industry,
we will implement re-skilling for suppliers' human resources and horizontally extend to otherfields with integrated support through subsidies for these SMEs and small businesses.
○ We will consider expanding support measures such as wage subsidies for when SMEs and small
businesses send their employees for re-skilling, even if the re-skilling is voluntary by individuals.
(3) Thorough Implementation of an Equal Pay for Equal Work System○ Even after the implementation of the equal pay for equal work system, which prohibits
unreasonable differences in the treatment between regular workers and non-regular workers
within the same company, there is still about 600 yen per hour gap between regular and nonregular workers.
○ Enforcement of the equal pay for equal work system is carried out by the 47 prefectural laborbureaus throughout Japan. Nationwide there are 321 Labour Standard Inspection Offices, but they
do not have the authority to provide guidance and advice. In order to strengthen enforcement ofequal pay for equal work, Labor Standard Inspection Offices have also been conducting trial
investigations since December 2022, and are required to report problematic companies to the
Labor Bureau.
○ Although it cannot be concluded that the wage gap of about 600 yen per hour is irrational, we will
follow up sequentially during the year to see the effect of the aforementioned surveys by the
Labour Standard Inspection Offices which was implemented in March 2023, on correcting wage
disparities, and after looking at the results, we will consider how to proceed. In doing so, if
necessary we will consider strengthening the systems of related organizations.
○ Under the current guidelines, the equal pay for equal work system aims to improve the treatmentof non-regular workers by comparing regular workers and non-regular workers, but this will bereconsidered by expanding the approach to employees with limited duties, employees with limited
work locations, and employees with limited hours. It should also be noted once again that theequal pay for equal work system applies to all workers, including foreign nationals.
(4) Follow-Up on the Mandatory Disclosures in the Act on the Promotion of Women's Active
Engagement in Professional Life
○ We will follow up on the state of gender wage gap after the enactment of mandatory disclosures(enacted in July 2022 for employers with 301 or more workers) in order to obtain direction onwhether or not to expand the scope of mandatory disclosures (for employers with 101 to 300
workers) under the Act on the Promotion of Women's Active Engagement in Professional Life.
(5) Enhancing Career Education○ To enhance career education during the Period for Integrated Studiesin elementary, junior high,14and high schools, we will disseminate implementation methods and good practices. In addition,
efforts will be made to enhance entrepreneurship education, including through extracurricular
activities by these schools.
○ Universities will also expand their curriculum to enhance career education.
○ In order to enhance human resource development and career awareness at universities andtechnical colleges, etc., we will actively recruit individuals who have practical experience atcompanies, etc., and significantly increase the number of practitioner-teachers that are invitedfrom companies, etc. Entrepreneurs from startups, SMEs, and small businesses will also be invited
as lecturers.
○ In addition, by promoting education and research that are integrated with corporate activities atuniversities and technical colleges, etc., we will advance both the social implementation ofresearch and the development of the advanced human resources that are necessary to compete in
the world.
○ We will strengthen support for efforts by companies to establish courses to develop humanresources in cooperation with universities or other higher education institutions.
(6) Promoting Coexistence with Foreign National Workers○ We will consider the specifics of a review of the Technical Intern Training Program, etc. based on
the discussions of the Advisory Panel of Experts for the Ideal Forms of the Technical Intern
Training Program and the Specified Skilled Worker System, with a view to giving a concrete
shape to the new system.
○ In addition, we will also improve the educational environment for the children of foreign nationals.
8. Reforming the System for Training and Evaluating National Public Employees○ In order to promote corporate labor market reform with the spirit of "taking the first step," it isnecessary for the government to update the system for training and evaluating national public
employees and to spread these trends to local public employees and incorporated administrative
agencies, etc.
○ Career paths and required skills also need to be reconsidered to fit the times. With the increasing
complexity of social issues and the sophistication of technology, national public employees are
increasingly being required to have high-level skills and expertise. Efforts should be made tosupport employees’ career development, such as providing opportunities to raise awareness of
their career paths based on such expertise, and sorting out their abilities that national public
employees acquire as they build their careers by planning systems and gaining a certain
experiences in the field.
○ In an environment where high-level skills and expertise are required, it is meaningless unless eachindividual national public employee takes action to improve their skills accordingly. As the15

current training programs are consisted primarily of classroom lectures, it should be updated, forexample, by increasing the number of participatory training programs, and appropriately
managing national public employees’ training attendance so that national public employees
receive the trainings that are required for their job responsibilities.
We will also consider how best to manage national public employees' job histories, the skills andexpertise that they have acquired, the results achieved, and their experience.

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