The Sustainable Development Goals (SDGs) are exerting a growing influence on legal and corporate practices globally, and Japan is no exception. For U.S. companies employing workers in Japan, understanding how these global goals, particularly those related to labor, are shaping Japanese labor law and workplace expectations is increasingly vital. This isn't just about compliance; it's about fostering productive, equitable, and sustainable work environments aligned with both international norms and evolving domestic standards.

At the forefront of this intersection are SDG 8 (Decent Work and Economic Growth) and SDG 5 (Gender Equality). These goals are not abstract ideals but are actively informing new labor law policies and encouraging shifts in corporate labor relations practices in Japan. The overarching aim is to create a labor market that is both dynamic and fair, ensuring that economic progress benefits all members of society.

The Core Concept: "Decent Work" in the Japanese Milieu

A central theme underpinning SDG 8 is the promotion of "decent work." As conceptualized by the International Labour Organization (ILO), decent work involves opportunities for work that is productive and delivers a fair income, security in the workplace and social protection for families, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives, and equality of opportunity and treatment for all women and men.

In Japan, the pursuit of decent work is being interpreted and advanced within the context of its own unique labor environment, which has traditionally been characterized by long-term employment systems (though these are evolving), a strong emphasis on company loyalty, and, more recently, challenges related to an aging workforce, labor shortages in certain sectors, and disparities between regular and non-regular employees. The Japanese government and various stakeholders are increasingly looking to the decent work agenda as a framework for addressing these contemporary labor market issues in a manner that aligns with global sustainability objectives.

Key Japanese Labor Law Policies and Trends Influenced by SDGs

The spirit of the SDGs is evident in several key areas of Japanese labor law and policy, reflecting a move towards more equitable, flexible, and rights-respecting workplaces.

1. Working Style Reform (Hatarakikata Kaikaku)

One of the most significant labor initiatives in recent years has been the "Working Style Reform" (Hatarakikata Kaikaku). This comprehensive set of reforms, enacted progressively, aims to tackle several long-standing issues in the Japanese workplace, directly contributing to SDG 8. Key elements include:

• Addressing Long Working Hours: Historically, long working hours have been a pervasive issue in Japan. The reforms introduced legal caps on overtime work, enforceable with penalties. This aims to improve work-life balance, employee health (SDG 3), and overall productivity. The specific caps vary depending on the industry and company size, with special provisions and grace periods for certain sectors like construction, transportation, and doctors, which are gradually coming under stricter regulation through 2024 and beyond.
• Promoting Flexible Work Arrangements: The reforms encourage more flexible working styles, including telework (remote work) and flexible hours (flextime systems). The COVID-19 pandemic significantly accelerated the adoption of telework, and while challenges in implementation and management remain, it's seen as a way to enhance work-life balance and potentially broaden labor force participation (e.g., for caregivers). As of April 2025, telework is being added as an official alternative measure for companies struggling to implement short-time working arrangements for employees with young children.
• Ensuring Annual Paid Leave Utilization: Companies are now legally obligated to ensure that employees who are entitled to 10 or more days of annual paid leave take at least 5 of those days each year.

These reforms collectively aim to create healthier, more sustainable, and ultimately more productive working environments.

2. Equal Pay for Equal Work and Addressing Disparities in Non-Regular Employment

A major focus of Japanese labor policy, aligning with SDG 8's call for full and productive employment and decent work for all, and SDG 10 (Reduced Inequalities), has been to address the "equal pay for equal work" principle, particularly concerning the treatment of non-regular employees (e.g., part-time workers, fixed-term contract workers, dispatched workers).

Legislation enacted as part of the Working Style Reform (effective for large companies from April 2020 and SMEs from April 2021) prohibits unreasonable differences in treatment (including wages, benefits, and working conditions) between regular employees and non-regular employees who perform the same work, if the differences are not justified by factors such as the scope of duties, level of responsibility, or potential for reassignment. Employers are also required to explain the reasons for any differences in treatment to their non-regular employees upon request. This aims to improve fairness and reduce a key source of inequality in the Japanese labor market.

3. Enhanced Harassment Prevention Measures

Creating a safe and respectful workplace is fundamental to decent work. Japan has strengthened its legal framework for preventing various forms of harassment:

• Power Harassment (Workplace Bullying): Amendments to the Act on Comprehensively Advancing Labor Measures (commonly known as the Power Harassment Prevention Act) made it mandatory for employers to take measures to prevent power harassment. These obligations initially applied to large companies from June 2020 and were extended to SMEs from April 2022. Employers must establish clear policies, provide consultation mechanisms, and respond appropriately to incidents.
• Sexual Harassment and Maternity Harassment: Existing laws addressing sexual harassment and harassment related to pregnancy, childbirth, and childcare leave have also been reinforced, emphasizing employer responsibilities for prevention and response.

These measures underscore a growing societal intolerance for workplace harassment and a commitment to ensuring psychological safety at work.

4. Promoting Diversity, Equity, and Inclusion (DEI)

SDG 5 (Gender Equality) and the broader principles of non-discrimination within SDG 8 are driving efforts to promote DEI in Japanese workplaces.

• Gender Equality: Despite progress, Japan still faces challenges in achieving gender equality in the workplace, particularly regarding the proportion of women in leadership positions and the gender pay gap. The Act on Promotion of Women's Participation and Advancement in the Workplace requires larger employers to analyze their situation regarding female participation, set voluntary targets, and disclose this information. Recent revisions, effective from July 2022 for companies with 301 or more employees, mandated the public disclosure of gender pay gap figures, further increasing transparency and pressure for improvement. Measures supporting childcare, such as the "Papa-Kyu" (paternity leave) system introduced from October 2022, aim to encourage greater male participation in childcare and create a more equitable sharing of family responsibilities. Further revisions to childcare leave laws are set for 2025, expanding eligibility and promoting flexible work options.
• Employment of Persons with Disabilities: Japan has a statutory employment quota system for persons with disabilities, and efforts continue to promote their inclusion and create supportive working environments.
• Foreign Workers: With an aging population and labor shortages, Japan is increasingly reliant on foreign workers. Ensuring their rights, fair working conditions, and integration into society are critical issues. The Technical Intern Training Program, while intended for skills transfer, has faced criticism regarding potential human rights abuses. The government is currently in the process of reforming this system, aiming to replace it with a new program focused on both skill development and securing a necessary workforce, with enhanced protections for trainees. Discussions are ongoing as of early 2025 regarding the specifics of the new system.
• LGBTQ+ Rights: While national-level legislation explicitly prohibiting discrimination based on sexual orientation or gender identity is still lacking, awareness is growing, and some local governments have introduced partnership systems. Some leading companies are voluntarily implementing inclusive policies.

5. Labor-Related Human Rights in Supply Chains

The responsibility of businesses to respect human rights, including labor rights, throughout their supply chains is a key tenet of the UN Guiding Principles on Business and Human Rights and is increasingly linked to the SDG agenda. Japanese companies, particularly those with international operations, are facing greater scrutiny and expectations to conduct human rights due diligence in their supply chains.

The Japanese government's National Action Plan on Business and Human Rights and METI's "Guidelines on Respecting Human Rights in Responsible Supply Chains" (published September 2022) encourage companies to identify, prevent, mitigate, and account for adverse human rights impacts, including forced labor, child labor, and unsafe working conditions, within their value chains. This extends beyond direct employees to workers employed by suppliers and sub-suppliers.

The Role of Social Dialogue and Labor Unions

Social dialogue—including negotiation, consultation, and simply the exchange of information between employers, workers, and their representatives—is a cornerstone of the ILO's approach to achieving decent work and is recognized as important for SDG implementation.

In Japan, labor unions have traditionally played a significant role in company-level labor relations, particularly in larger enterprises. While union density has declined over the years, unions continue to be important actors in negotiating wages, working conditions, and addressing workplace grievances. In the context of SDGs, labor unions have the potential to:

• Advocate for working conditions that align with decent work principles.
• Engage with management on sustainability issues that impact workers (e.g., "just transition" in the context of decarbonization).
• Participate in monitoring and promoting labor rights within supply chains, potentially through engagement in global framework agreements (GFAs) if their parent international federations are involved, though this is less common for enterprise-based Japanese unions directly.
• Promote DEI and anti-harassment measures within companies.

However, the reach of traditional enterprise-based unions may be limited concerning non-regular workers or workers in complex supply chains. New forms of worker representation and broader stakeholder engagement may be needed to fully address SDG-related labor challenges.

Corporate Best Practices and Ongoing Challenges

Many Japanese companies are proactively responding to the call for more sustainable and rights-respecting labor practices. Examples include:

• Implementing innovative working style reforms that go beyond legal minimums to genuinely improve work-life balance and employee well-being (e.g., significant telework options, flexible core times, enhanced leave policies).
• Investing in comprehensive DEI programs, setting ambitious targets for female leadership, and creating inclusive environments for diverse talent.
• Developing robust human rights due diligence systems for their supply chains, including supplier codes of conduct, audits, and capacity-building programs for suppliers.
• Actively engaging with employees through surveys and dialogue to improve job satisfaction and address concerns related to "hatarakigai" (meaningfulness and motivation at work).

Despite these positive steps, challenges remain:

• Deeply Ingrained Work Culture: Overcoming traditional norms around long working hours and hierarchical structures takes time and sustained effort.
• SME Resource Constraints: Smaller and medium-sized enterprises, which form the backbone of the Japanese economy and its supply chains, often lack the resources and expertise to implement extensive SDG-related labor initiatives.
• Complexity of Supply Chains: Ensuring decent work and human rights deep within multi-tiered global supply chains is a complex task.
• Effectiveness of "Equal Pay for Equal Work": Ensuring true substantive equality beyond formal compliance with the rules remains an ongoing challenge.
• Balancing Flexibility with Security: As work styles become more diverse (e.g., gig work, platform work), ensuring adequate protections and social security for all workers is a growing concern.

Practical Implications for U.S. Companies in Japan

For U.S. companies operating in Japan, the evolving labor landscape driven by SDGs presents several key considerations:

• Rigorous Compliance: Stay updated on frequent changes and nuances in Japanese labor law, including those related to working hours, non-regular employment, harassment, and leave entitlements. Ensure that local HR policies and practices are fully compliant.
• Adapting Global Policies: While maintaining global HR standards, adapt policies to the specific legal and cultural context of Japan. This may involve tailoring DEI initiatives, work-life balance programs, and grievance mechanisms.
• Talent Attraction and Retention: Demonstrating a genuine commitment to decent work, employee well-being, and DEI can be a significant competitive advantage in attracting and retaining skilled employees in Japan.
• Supply Chain Labor Risk Management: If sourcing from or partnering with Japanese companies, understand their labor practices and conduct appropriate due diligence to mitigate risks of human rights abuses in your value chain. This is increasingly important for maintaining brand reputation and meeting the expectations of your own stakeholders.
• Fostering a Positive Work Environment: Go beyond mere legal compliance to create a workplace culture that values employee contributions, promotes open communication, and supports employee development—all key aspects of "hatarakigai."

Future Outlook: A Continuing Evolution

The influence of SDGs on Japanese labor law and practice is not a static endpoint but a continuous process of evolution. Societal expectations regarding corporate responsibility for worker well-being and rights are likely to continue rising. We can anticipate:

• Further refinements to working style reforms, potentially with increased focus on mental health and outcomes-based productivity.
• Ongoing efforts to close the gap in treatment between regular and non-regular workers.
• Increased emphasis on human rights due diligence across supply chains, possibly with more explicit governmental expectations or even legislative developments in the longer term, mirroring global trends.
• Greater corporate transparency and reporting on labor practices and human capital management.

Conclusion

The Sustainable Development Goals are providing a significant impetus for positive change in Japanese labor law and corporate practices. The pursuit of "decent work" and greater equality is not just a matter of social responsibility but is increasingly recognized as essential for long-term business sustainability and national economic vitality. For U.S. companies, navigating this landscape successfully means embracing these principles, ensuring robust compliance, and actively contributing to the creation of workplaces where all employees can thrive. This proactive approach will be key to building a strong, reputable, and sustainable presence in Japan.