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LABOR LAW SEMINAR

Introduction to Labor & Employment regulations in Japan

2006.12.7(Thu)
Risks of Dismissal and Working Hour Issues




Useful Likns for understanding Situations for Labour area in Japan

Social insurance and Labor insurance systems in Japan

Japanese social and Labor insurance systems comprise following systems:

Labor Insurance
  • Workers' Accident Compensation Insurance (Rousai Hoken)

    To see Law provisions(pdf):

    The Labor Standards Law stipulates an employer shall have a duty to pay the employee's medical care expenses and temporary disability compensation, when he/she is injured or suffers an illness attributed to his/her employment.
    However, compensation in cases of the employer's inability to pay is not guaranteed. For this reason, it is mandatory for an employer, regardless of a corporation or individual, who hires employee, even if an employee is only one, to join the Workers' Accident Compensation Insurance.

    If an employer has joined the Workers' Accident Compensation Insurance, the compensation will be dealt with by this insurance when an employee is injured on the job.
    Only the compensation for temporary disability for the first 3 days shall be directly covered by the accident compensation system of the Labor Standards Law.

    All the premiums shall be born by the employer.

    The premium rate is 5/1000 to 129/1000 depending on the category of business.

    A benefit shall also be provided in case the employee is injured due to an accident while he/she is commuting.

  • The Employment Insurance System (Koyo Hoken)

    To see Law provisions(pdf):

    The employment insurance system shall provide benefits which ensure displaced employees a stable life until they find a new job.
    This insurance shall also be provided to foreign employees. However, oversees public servants, those who are covered by any overseas unemployment compensation system, and those who are expats to establishments in Japan after being hired abroad, are unable to join this insurance system. The insurance enrollment procedures will be undertaken by employers at the appropriate public employment security office.

    Insurance Premiums
    Insurance premiums shall be paid by both employer and employee, each of their share defined according to the employee's salary/wages.
    1. Ordinary enterprises  19.5/1000
      (employer 11.5/1000, 1.15%, employee 8/1000)
    2. Enterprises concerning Agriculture, Forestry and Fishery, and Brewing  21.5/1000
      (employer 12.5/1000, 1.25%, employee 9/1000)
    3. Construction Industry
      22.5/1000 (employer 13.5/1000, 1.35%, employee 9/1000)
Social Insurance

  • Health Insurance and Employees' Pension Insurance
    The purpose of these systems is to help employees to maintain a stable life by providing employees or their families with medical or pension benefits for an illness, injury or old age and other problems. Premiums are determined in accordance with the insured person's salary.

    Health Insurance and Employees' Pension Insurance apply to all corporations and individual offices which regularly employ 5 or more persons. Those who are required to join this insurance, are employees who work regularly for an applicable company, and an employees' ordinary working days or hours are three quarters or more of those of full - time employees.
    The monthly premiums are determined in accordance with the employees' wages, and are shared equally between the employer and the insured person. As the employer must pay both the shared premiums together each month, the employee's premium shall be deducted from his/her monthly wages and bonus.

    Insurance premiums are calculated by multiplying the monthly standard remuneration and“ bonus” payments with the premium rates.

    Health Insurance Premiums
    • The non-insured for long-term nursing care insurance;
      82/1000, 8.2% (subsidized equally by employers and employees)
    • The insured for long-term nursing care insurance(For those age 40 to 64);
      94.3/1000, 9.43% (subsidized equally by employers and employees)
    Welfare Pension Insurance Premiums
    • 146.42/1000, 14.642% (subsidized equally by employers and employees)

    Exemption from Insurance Premiums

    If an employee takes childcare leave from work, both employee and employer may be exempt from contribution payment for the duration of the leave, upon application.


National Health Insurance and National Pension

National Health Insurance and National Pension apply to those who are self -employed, agriculture, forestry and fisheries and also for others unemployed. Individuals are required to file at one's regional government office.

National Health Insurance premiums (tax) should be paid by each household. Premiums (tax) are computed based on the total amount of inhabitant tax of all members of one household. Monthly premiums for the National Pension are ¥13,860 per person over 20 years old (as of Apr. 2006).



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