• Fostering a Better Workplace
• Improving the organizational climate
• Diversification of Work Arrangements

• Wages
• Labor-Management Relations

At Epson, our hope is to enable both our businesses and our employees to grow as we realize our aim of achieving sustainability and enriching communities. To this end, we seek to create an organizational climate in which diverse personnel are encouraged to engage in free and open communication, thereby enhancing the quality of relationships, maximizing the power of the team, and allowing both the company and its employees to continually grow. We are also working to foster a better work environment, one that meets the needs of employees working under a variety of arrangements.
In addition, we are addressing such issues as the management of working hours, health and productivity, diversity, equity & inclusion, and harassment prevention in order to create a satisfying work environment.

Epson seeks to create an environment that encourages free and open communication, thereby improving the quality of relationships and solidifying an organizational climate that promotes the continuous growth of both employees and the company.
To attain this goal, Epson began conducting annual employee motivation surveys in 2005 to assess the state of the organizational climate. In 2020, this survey was replaced with an organizational climate assessment survey. Survey results are reported to the president and other members of executive management, and workplaces are provided with feedback. Managers analyze the survey results to find out the state of the organizational climate. They then act to address issues and challenges.
Team and organization performance is an important factor for improving the quality of relationships, yet this was an area where survey scores were consistently low. Epson thus launched a company-wide effort to improve in this area. As a result, FY2020 score of 3.62 rose to 3.68 in the second half of FY2021, nearly reaching the target of 3.7. To support management's efforts, Epson brings together managers from organizations across the company to discuss issues. These discussions provide insights into underlying problems and encourage behavioral changes. Epson has also set up an advisory service for managers and arranges mentors.
To encourage executive management to take the initiative in changing the organizational climate, Epson has made organizational management and harassment prevention efforts a component of manager selection and dismissal decisions, as well as compensation evaluations.

In addition to improving the quality of relationships, we are working to create an even more vibrant environment where all employees take initiative and experience job satisfaction. As part of this, we will begin conducting engagement surveys from FY2022 and will improve workplaces based on the results.

Epson specifies its work goals and work culture. Our goal is for all employees to maintain and improve their physical and mental health while working efficiently in a vital, rewarding work environment, without excessive labor demands. In this way, the company will develop in perpetuity, raising its corporate value and ensuring a win-win relationship with its employees.

Seiko Epson has been driving additional work reforms since 2017. In Phase I (FY2017-2019), we prioritized the management of overtime and the prevention of long working hours. In Phase II (FY2020-2022), we have been introducing a wider range of work arrangement options. The introduction of a work-from-home option was a particularly important move, one made swiftly in response to COVID-19. Over time, however, issues with the system became apparent. To help resolve them, employees were surveyed and the issues were discussed with the labor union. The outcomes will be used to shape policies that will enable us to create a healthy and vibrant work environment in Phase III, which will begin in FY2023.
The diversification of work arrangements is bringing a wide range of issues to the forefront in areas such as human resources management and organizational operations. Everything from health to how we communicate and how we evaluate/appraise personnel are affected. As a part of our efforts to create a healthy and vibrant work environment, we will also review our human resources systems and provide management with support.

<Measures to accommodate diversification of work arrangements>

Remote work system

Seiko Epson introduced a system in FY2018 that gives time-constrained employees the opportunity to work from home so that they can provide care to dependents, including children and other sick or ill family members. In 2020, the remote work option was expanded to encompass all employees. This allows employees to work from home even if they are not constrained by childcare or nursing/caregiving responsibilities.
Employees can also work remotely from approved locations outside the home, providing even greater flexibility. Or, when their child gets sick, they can work a certain minimum number of hours while their children are sleeping. Whereas parents previously may have had to take paid leave for these situations, they now can work more flexibly around them. Effective from July 2022, Seiko Epson expanded the work location options so that employees can also work from the home of their parents or their spouse's parents or at the home of their spouse who lives separately.
In addition, the company will begin to pay a work-from-home allowance from October 2022 and better align the system with the situation.

Time Off by the Hour

From October 2022, employees will be allowed to request time off by the hour at any time during the workday. This is meant to strike a better balance between work and the care of a child or family member or with one's own medical care. Enabling employees to take up to five days' worth of annual paid leave by the hour will help to improve the work-life balance.

Flex Time without Core Hours

Epson will amend its flex-time system to eliminate the requirement to be present during core hours. This change will take effect in March 2023 to provide greater flexibility in the use of the system that is available to many employees. The elimination of core time will give employees a wider range of options about when to start and end the workday.

Seiko Epson is creating an environment that facilitates a better work-life balance so that employees can continue to work with peace of mind while adapting to changes in their situation. In FY2022, we will extend the period during which employees are eligible to work reduced hours to care for a child or sick or injured family member. We will also encourage all fathers to take paternity leave.

Childbirth and Childcare Support

To create an environment in which all employees, regardless of gender, are able to advance their careers if they wish to do so, we are also strengthening childcare support equally for both men and women so that they can continue to work after the birth of a child. Specifically, we offer time off, leaves of absence, shorter working hours and other benefits so that they can give attention to their children and achieve a healthy work-life balance. Thanks to improvements such as these, 100% of women have opted to take childcare leave in recent years.

<Childcare Leave Trends>

^* Data for Seiko Epson Corporation employees as of March 20, 2022.
^*1 Including individuals who took wellbeing leave.
^*2 Number of individuals granted childcare leave/ eligible individuals.
(Individuals who have had a child and are eligible for childcare leave)
^*3 Numbers in parentheses indicate employees who took wellbeing leave.

Responding to employee caregiver needs

With advancing population aging, the number of people requiring care is on the rise. Consequently, the number of employees acting as caregivers for their families is also on the rise. Aiming to eliminate turnover due to caregiver needs, Epson provides the following types of support to caregivers.

• Launched a website related to caregiving to provide information related to in-house programs and nursing care insurance systems.
• Conducting nursing care preparation seminars to equip employees with the knowledge that will enable them to respond calmly to sudden nursing care needs.
• We contracted with an outside advisory service that employees can privately consult about caregiving issues.
• Enable the use of the following programs to support balance between work and caregiving.
  

<Caregiving Program>

Epson's Wellbeing Leave Program

Seiko Epson introduced a special paid leave program in March 1998 that allows employees who do not use all their annual paid vacation days during the year to stockpile the remainder, up to 60 days, in a separate account. They have the option of using special paid leave days in the event of personal injury or illness, or to care for children or family members, or to participate in school events for their children in elementary and middle school.

Seiko Epson has been acting to more closely manage working hours and prevent long working hours in conjunction with the work reforms that it began introducing in 2017. In addition to ensuring legal compliance by familiarizing employees with an operations manual for managing working hours, we monitor in-out times and hours spent at work with automated tracking systems. We also remind personnel of the importance of maintaining reasonable working hours.

<Working hour and paid leave targets and results>

FY2022 target for annual total working hours per employee: 1,845 hours

FY2022 target for days of paid leave taken: 20 days (100% usage)

Epson's wage standards are compliant with the local labor regulations in the countries where we operate. Our standards provide for things such as suitable wages, allowances, and extraordinary pay.
The Epson Group Human Rights Policy states "Epson promotes equality of opportunity and treatment in respect to employment, occupation, and remuneration, with a view to eliminating any discrimination." In Japan, Epson pays its people based on the principle of equal pay for equal work, regardless of type of employment, as required by law. The wage system does not discriminate by age or gender.

In Japan, for regular employees who are not in management positions, we have introduced a qualified grade-based system wherein compensation is determined by the employee's job and competencies. For leaders, we have a system wherein the compensation is determined by their job, which is given based on their competencies, and the level of roles they are fulfilling. We have a role-based grade system for managers wherein compensation is determined by the size of the person's role. The suitability of non-management employee and leader wages and the wage system are reviewed once a year by a committee made up of members of management and the labor union.

In every country and region outside Japan, we establish rules that are compliant with all local wage-related regulations governing things such as minimum wages, legal benefits, and overtime. Wages, deductions, and so forth are calculated based on these rules, and employees receive an electronic or printed pay stub showing the details of each pay period. Payment is made on directly to employees on the appointed date.

As a union shop, Seiko Epson requires all regular employees, except those in management or in certain other management-related positions, to join the labor union.^*1

A labor-management council forms the basis of the labor-management relationship. Held regularly and as needed, this council is where management explains important management matters to labor union representatives and where the two sides discuss proposed changes to employment conditions. In addition to the labor-management council, Seiko Epson has formed labor-management committees, the safety and health committee, as well as some other committees, to discuss and solve issues related to things such as working styles, family support, and benefits and wages.

Informal discussions are also held on the division and department level to provide a venue for bidirectional communication between employees and managers. Management communicates its thoughts and wishes to employees as well as get direct feedback from them.

^*1 Rate of joining the labor union among all regular employees: 86.4%