“Disability Employment Businesses” in Japan to Face Regulation Following Inappropriate Practices; Health Ministry to Require Registration

From The Asahi Shimbun

31 August 2026

TOKYO – The Ministry of Health, Labour and Welfare announced on the 31st that it plans to introduce regulations, including mandatory notification requirements, for businesses that provide workplaces for people with disabilities to be employed by companies. The move comes after reports of inappropriate practices, including businesses effectively leaving the management of disabled employees entirely to outside operators.

A regulatory proposal was presented to a subcommittee of the Labour Policy Council and was broadly approved. The ministry aims to submit a bill to amend the Act on Employment Promotion etc. of Persons with Disabilities to the ordinary session of the Diet next year.

“Disability employment businesses” are services that provide employees with disabilities hired by companies with workplaces separate from their employers’ main business operations. These include farms and satellite offices. However, some have been criticized for deviating from the principle that people with and without disabilities should “work together” and instead being used solely to help companies meet their legally mandated employment quotas. Until now, there have been no specific legal regulations governing these businesses.

Under the proposed regulations, disability employment businesses would be defined as businesses that, among other things: (1) have people with disabilities work at locations different from the usual workplaces of the company’s other employees; and (2) provide assistance with employment management. The government is considering formally defining these as “businesses providing assistance with the employment of people with disabilities, etc.” 

Operators would then be required to notify the government of their activities. The ministry would also establish guidelines for operators, requiring them to assign personnel knowledgeable about the employment of people with disabilities and provide education and training for staff. Ultimately, the guidelines would include examples of proposals and support aimed at helping employees transition to working within their own companies. If inappropriate practices or other problems are identified, the government would be authorized to request reports and issue guidance, advice, or recommendations.

Companies that employ people with disabilities would also be required to report the names of the businesses they use, the locations where their disabled employees work, the number of employees involved, the nature of their work, and other information. These reports would be required in conjunction with the annual employment-status reports that companies submit as of June 1.

Japan’s statutory employment quota for people with disabilities has been raised in stages, reaching one person with a disability for every 37.5 employees as of July this year. According to a survey conducted by the ministry through industry associations in April and May, 24 disability employment business operators responded, and a total of 11,612 people with disabilities were working at workplaces operated by these businesses.

Regarding the employment of people with disabilities, some companies actively assign work related to their core business to disabled employees. On the other hand, some companies have been criticized for failing to take an active role in developing employees’ skills or careers, or for using crops grown at farms operated by disability employment businesses as employee welfare benefits. These practices have become a source of concern.