On December 20, 2016, the Japanese government issued the "Draft Guidelines for Equal Pay for Equal Work" ("Draft Guidelines"), which provide its interpretation as to which differences in working conditions between regular employees and non-regular employees are considered reasonable (please see the February 2017 issue for more information). The Action Plan, in order to ensure the effectiveness of the Draft Guidelines, addresses the following: (i) the development of the laws on which employees will rely, such as the rules for equal treatment of regular and non-regular employees, in the event that they seek a judicial ruling; (ii) making it an obligation for employers to provide an explanation of working conditions, including an explanation of the nature of the working conditions of non-regular employees and the reasons for differences between the working conditions of non-regular and regular employees; (iii) the development of an administrative alternative dispute resolution process; and (iv) the development of laws relating to dispatched workers, including imposing an obligation on companies hiring dispatched employees to provide the dispatching agencies with information regarding the working conditions of its regular employees, such as their payment.

The Action Plan is not legally binding. However, businesses should pay close attention to legal reform developments related to the Action Plan, since, in the event that existing laws are amended in accordance with the Action Plan, businesses may be forced to substantially reconsider their work rules and labor–management agreements.