The Cabinet Office has released “the Grand Design and Action Plan for a New Form of Capitalism (2023 revised draft,)” pledging to have the Minimum Wage Council, formed by the government and labor and management representatives, discuss raising of the weighted nationwide average minimum wage to 1,000 yen or higher. Recently, the Central Minimum Wage Council released the guideline for regional minimum wages for fiscal 2023. This article looks into the flow of determining the guideline and minimum wages.
[1] Guideline for fiscal 2023 regional minimum wages
This year, prefectures have been classified into three ranks: A (6 prefectures), B (28 prefectures) to C (13 prefectures), and a target amount of wage increase was set for each rank. Specifically, prefectures in A rank are advised to raise minimum wages by 41 yen, prefectures in B rank by 40 yen, and C rank by 39 yen.
If minimum wages are raised according to the guideline, the weighted nationwide average minimum wage will be 1,002 yen, in a largest 41-yen increase since the guideline system was started in 1978, and a 4.3% jump, compared with 3.3% last year. (The increase last year was 31 yen.)
[2] How to determine minimum wages
The Central Minimum Wage Council is tasked to study the situation around minimum wages, have discussions and make a proposal. Regional minimum wage councils examine the proposal and file an objection, if required, or answer to the proposal. The final decision will be made by the directors of prefectural labor bureaus. The Central Council’s proposal has just been released this year.
Minimum wages will be finalized after regional councils’ deliberation, but they are expected to go for large increases. Companies should start examining their employees’ wages to ensure they will be above the legal standard.
Reference
Labour Ministry, “Guideline for the revision in fiscal 2023 regional minimum wages”
https://www.mhlw.go.jp/stf/newpage_34458.html
*The information is valid as of the date of this article.
