Prime Minister Fumio Kishida pledged on Friday to require big firms to disclose wage gaps between men and women as a centrepiece of his "new capitalism" agenda to be compiled this summer that seeks to balance economic and social concerns.
The new rule would affect 17,650 firms with more than 300 employees, aiming to rectify long-time gender-based inequalities, according to a draft plan submitted to Kishida's new capitalism panel for debate on Friday.
Since taking office last October, Kishida has pushed hard for disclosure rules on gender pay gaps to encourage women's participation in the labor force, in part to help address Japan's chronic labor shortage.
"In order to resolve wage disparities between men and women, we'll swiftly put in place revisions to the system in the law," Kishida told Friday's panel meeting. "We will prepare to implement it this summer."
Japanese firms have been resisting such disclosures, fearing they would reveal significant disparities.
The new rules are also expected to pressure Japanese companies to review traditional seniority-based career development and promotion practices.
Japan lags behind other advanced countries in gender-based pay equality, with women's earnings averaging only 78% of men's, compared with the 88% median figure among all OECD countries.
Britain, France and Germany already require larger companies to report on pay equality on a regular basis.
Japan's new rules will require companies to disclose women's pay as a percentage of men's, with separate reporting for individual subsidiaries and a breakdown of full-time employees versus contract or irregular employees.