How the disability-employment exclusion rate fell in 2025 — covered industries and the practical impact

In short: From April 1, 2025, the disability-employment exclusion rate was cut by a uniform 10 percentage points for every industry for which a rate is set. As a result, industries whose rate had been 10% or below dropped out of the exclusion-rate system. Because the exclusion rate deducts a fixed share from the number of regular workers used to apply the statutory employment rate, the cut means that, for covered industries, the number of persons with disabilities they must employ effectively rises.

For HR and labor staff who handle disability employment in industries that have an exclusion rate — construction, transport, medical care, and the like — this article organizes, from a Shakai Hoken Roumushi's viewpoint, what the April 2025 cut changed: the covered industries, the calculation, and how to prepare. It also makes clear where reports and levies are ultimately filed.

What is the disability-employment exclusion-rate system?

The Act on Employment Promotion etc. of Persons with Disabilities requires each ordinary business operator to employ persons with disabilities in a number at least equal to the number of regular workers multiplied by the statutory employment rate (Article 43). The exclusion-rate system is a mechanism that, for industries where employing persons with disabilities is generally considered difficult (for example, where mechanization is hard), deducts a share corresponding to a set rate (the exclusion rate) from the number of regular workers used to apply the statutory rate.

From the standpoint of normalization, the exclusion-rate system was abolished in principle by the 2002 amendment, but because an abrupt end would have a large impact, it survives as a transitional measure "for the time being" under the supplementary provisions of the amending act, and has been cut in stages toward reduction. The covered industries and rates are set by Cabinet Order.

Time	Revision of the exclusion rate
April 2004	Uniform 10-point cut for each covered industry (kept as a transitional measure after abolition in principle)
July 2010	Uniform 10-point cut for each covered industry
April 1, 2025	Uniform 10-point cut for each covered industry; industries at 10% or below drop out

The exclusion rate applies per workplace (establishment). If the head office is not in a covered industry but only a factory is, the exclusion rate is applied only to the regular workers of that factory.

How far did the exclusion rate fall in April 2025?

From April 1, 2025, the rate for each exclusion-rate industry was cut by a uniform 10 points. As a result, industries whose rate had been 10% or below fell to 0% or below and dropped out of the exclusion-rate system. For those industries, the statutory number of persons with disabilities is now calculated on the full number of regular workers, with no deduction, just like other ordinary business operators.

The post-cut rates differ by industry. Representative examples follow. For the full, accurate list of covered industries and rates, check the list published by the Ministry of Health, Labour and Welfare.

Exclusion-rate industry (post-cut, examples)	Exclusion rate (from April 1, 2025)
Non-ferrous metal primary smelting/refining; freight forwarding (excluding collection-and-delivery consolidated transport)	5%
Construction; steel; road freight transport; postal services (including correspondence delivery)	10%
Port transport; security services	15%
Railways; medical services; geriatric health-care facilities	20%
Forestry (excluding hunting)	25%
Metal mining; child welfare services	30%
Road passenger transport	45%
Ship operation by seafarers and the like	70%

The statutory employment rate for private companies is itself being raised, reaching 2.7% from July 1, 2026. The staged increase of the statutory rate and how regular workers are counted are summarized in what a company should check before the disability employment rate rises to 2.7%.

Which industries are covered, and how does the statutory number change?

The covered parties are establishments in industries for which an exclusion rate is set by Cabinet Order — including construction, steel, road freight transport, postal services, port transport, security, railways, medical care, and forestry. Which industry your establishment falls under, and its post-cut rate, should be checked against the MHLW/Hello Work list.

When the exclusion rate falls, the number deducted decreases, so the number of regular workers used as the base for the statutory rate rises — and with it the required number of persons with disabilities (the statutory number). Concretely (fractions are rounded down):

Case	Regular workers	Exclusion rate	Base after deduction	Statutory number (example calculated at 2.7%)
Before the cut	1,000	20%	800	21 (800 × 2.7% = 21.6)
After the cut	1,000	10%	900	24 (900 × 2.7% = 24.3)

With the same workforce, a 10-point cut raises the base by 100 and the required number by 3 in this example. For industries that dropped out of the system, the deduction disappears, so the increase is larger still. The actual calculation also reflects how regular workers are counted (requirements such as 20 hours or more a week), the 0.5-person counting of short-time workers, and how persons with disabilities are counted by disability type, severity, and scheduled weekly hours. Calculate your own numbers against the primary sources and with a Shakai Hoken Roumushi.

What should you prepare for the cut?

The cut is a change that raises the number of persons with disabilities a covered industry must employ. We recommend checking the following.

• Redo your calculation at the post-cut rate: for each establishment, confirm the industry and the post-cut exclusion rate, and recompute the base after deduction and the statutory number. For industries that dropped out, compute with no deduction.
• Grasp the gap against your current situation: compare the current number counted by disability type, severity, and scheduled weekly hours with the required number. If there is a shortfall, reflect it in your hiring plan.
• Prepare hiring and job retention: prepare how you post jobs, carve out tasks, provide reasonable accommodation, and set up a consultation structure. For the working conditions shown at hiring, see also what must be stated in a job posting.
• Arrange work rules and internal structure: confirm that rules on working hours, breaks, and safety and health can accommodate the way persons with disabilities work. For maintaining work rules, see from how many employees are work rules mandatory, and what is not.

Have a question about your situation?

Tell us about your social insurance, payroll or employment enquiry.

Chat on LINEContact us

In construction, where sole proprietors ("one-person masters") and multiple employers are mixed on site, counting regular workers itself needs care. For sorting out social insurance and special enrollment in workers' accident insurance, see also the obligation to enroll in social insurance in construction and special enrollment for sole proprietors.

Where are reports and levies filed?

The exclusion-rate calculation is the premise of the disability employment status report and of the disability employment levy. The filing points are as follows.

What to do	Where to file
Disability employment status report (as of June 1 each year; in principle by July 15)	To the Minister of Health, Labour and Welfare via Hello Work (Article 43, paragraph 7)
Declaration/payment of the disability employment levy; application for adjustment allowance and reward money	Japan Organization for Employment of the Elderly, Persons with Disabilities and Job Seekers (JEED)
Calculating the rate, checking the system, and maintaining work rules	Shakai Hoken Roumushi (our office can help)

How the levy, adjustment allowance, and reward money work is summarized in what a company should check before the disability employment rate rises to 2.7%. The final confirmation of whether you are subject to the report or the levy is made by the competent Hello Work, Prefectural Labour Bureau, and JEED.

四葉社会保険労務士事務所 can advise on calculating the statutory number reflecting the exclusion rate, grasping the gap against your current situation, and maintaining the status report, work rules, and hiring structure. Consultation is free; fees are in the fee schedule, and frequently asked questions in the FAQ.

Frequently asked questions

Q. How did the exclusion rate change in 2025?
A. From April 1, 2025, the rate for each exclusion-rate industry was cut by a uniform 10 points. As a result, industries whose rate had been 10% or below dropped out of the exclusion-rate system. The rate was also cut by a uniform 10 points in April 2004 and July 2010, so it has been revised toward reduction.

Q. What increases when the exclusion rate falls?
A. The deduction from the number of regular workers used as the base for the statutory rate decreases, so the base rises and the required number of persons with disabilities (the statutory number) rises. For example, at an establishment with 1,000 regular workers, a cut from 20% to 10% raises the base from 800 to 900.

Q. Where can I check whether my industry is covered?
A. The covered industries and the post-cut rates are set by Cabinet Order, and the MHLW/Hello Work publishes a list. Construction, steel, road freight transport, postal services, port transport, security, railways, medical services, forestry, and others are among the covered industries. Because the rate applies per establishment, judge it by the establishment's industry.

Q. Where do I file the status report and the levy?
A. The disability employment status report is filed to the Minister of Health, Labour and Welfare via Hello Work, for the situation as of June 1 each year, in principle by July 15. Declaration and payment of the disability employment levy, and applications for the adjustment allowance and reward money, go through the Japan Organization for Employment of the Elderly, Persons with Disabilities and Job Seekers (JEED).

Sources

• Act on Employment Promotion etc. of Persons with Disabilities, Article 43: the disability-employment obligation of an ordinary business operator (employ persons with disabilities in a number at least equal to regular workers × statutory rate). Paragraph 7: report the disability employment status as of June 1 each year, in principle by July 15, to the Minister of Health, Labour and Welfare via Hello Work.
• Exclusion-rate system: abolished in principle by the 2002 amendment but kept, under the supplementary provisions of the amending act, as a transitional measure "for the time being"; the covered industries and rates are set by Cabinet Order, deducting the rate-equivalent number from regular workers. Applied per establishment.
• Cuts to the exclusion rate: a uniform 10-point cut for each covered industry in April 2004, July 2010, and April 1, 2025. The April 1, 2025 cut dropped industries at 10% or below out of the system.
• Post-cut rates (examples): non-ferrous metal primary smelting/refining and freight forwarding (excluding collection-and-delivery consolidated transport) = 5%; construction, steel, road freight transport, postal services (including correspondence delivery) = 10%; port transport, security = 15%; railways, medical services, geriatric health-care facilities = 20%; forestry = 25%; ship operation by seafarers and the like = 70%; etc. The accurate industries and rates follow the MHLW published list.
• Statutory employment rate for private companies: 2.7% from July 1, 2026 (2.5% before).
• Disability employment levy system: administered by JEED.
• MHLW: employment of persons with disabilities (guidance on the statutory rate and exclusion rate). Accessed October 9, 2026.
• Business of a Shakai Hoken Roumushi: Article 2 of the Certified Social Insurance and Labor Consultant Act.

This article does not decide whom to consult. Calculating the statutory number reflecting the exclusion rate, grasping the gap against your current situation, the status report, and maintaining work rules and the hiring structure are the business of a Shakai Hoken Roumushi. The final confirmation of which exclusion-rate industry your establishment falls under, and of whether you are subject to the report or the levy, is made by the competent Hello Work, Prefectural Labour Bureau, and JEED. If you consult 四葉社会保険労務士事務所, fees are in the fee schedule and frequently asked questions in the FAQ.

This article is general information. The application of the exclusion rate and whether your own calculation and procedures are needed are decided by a qualified professional after a consultation, in light of the latest primary sources (the Ministry of Health, Labour and Welfare, Hello Work, JEED, etc.) and individual circumstances. Written by Joji Uramatsu (Shakai Hoken Roumushi, Gyoseishoshi, Registered Real Estate Transaction Specialist).