The Supreme Court has finalized a landmark ruling that bars companies from using arbitrary job titles, such as “contract employee,” to pay workers lower salaries than “regular employees” for the same duties.
The decision, which affirms the principle of “equal pay for equal work” and protects all full-time, permanent workers on indefinite contracts, could force a re-evaluation of corporate pay structures across the country.
The lawsuit was filed by a woman in her 50s from Aomori Prefecture who worked at an off-track betting parlor in Towada city, run by Tohoku Eizo, a subsidiary of Television Iwate Corp.
Hired in 2002 on a permanent contract, she worked the same full-time schedule as a regular employee but was classified as a contract worker.
She argued that her base salary, bonus and housing and family allowances were all significantly lower than those of her regular employee counterparts at another location.
She left the job at the end of July 2025 and sought about 36 million yen ($226,000) in damages for the disparity.
The ruling closes a subtle but significant loophole in Japan’s 2018 work style reforming laws.
Those laws forbid unreasonable pay gaps between non-regular staff, such as part-time or fixed-term workers, and “ordinary workers.”
But the legal definition of an “ordinary worker” is broad. It includes not only traditional management-track “seishain” (regular employees) but also other permanent staff whose roles are limited by location or duties.
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