Up to 3.41 million people, accounting for about 5 percent of Japan's total labor force, are estimated to be working as freelancers, according to a recent survey conducted by the government.
Analysts expect the number of freelancers to grow amid the government's push for more flexible working arrangements to address the country's labor shortage, as more companies are allowing employees to take on second or side jobs to increase their incomes.
The government plans to take steps to support such self-employed workers, including submitting a bill to the Diet next year for a new law aimed at enhancing transparency in business practices.
The government recognizes the need to assist freelancers who tend to be pressured into disadvantageous contracts when negotiating with companies, officials said.
The Cabinet Office survey showed that freelancers accounted for 19.1 percent of workers in the construction industry, 10.7 percent in the retail and wholesale sector, 9.8 percent in the field of academic and specialist research.
The overall estimate, based on the Cabinet Office survey covering 50,000 workers, includes around one million salaried employees and housewives who take on freelance jobs.
It also includes people in their mid-30s to mid-40s who struggled to secure stable employment following the collapse of Japan's economic bubble in the early 1990s.
In systems development, for example, companies tend to outsource work to skilled individuals rather than training their own employees, while it is common in the construction and logistics sectors to hire individual contractors who do not receive the same benefits as full-time employees.
The popularity of new services such as Uber Eats, where individual contractors deliver food, has also added to the rise in freelance workers. Mizuho Financial Group Inc. and SoftBank Corp. are among major companies that have moved to allow employees to hold side jobs.