JPN-Journal.com News/Laws for Foreigners Working in Japan

What is Employment Insurance?


Overview

Employment Insurance is a workplace-based coverage system that provides unemployment compensation to employees who become unemployed through no fault of their own.

Japan's employment insurance system has its origin during the economic chaos immediately following the Second World War when unemployed workers flooded the harbors of Japan.


Enrollment

An employer is required by law to register with the Labor Standards Inspection Office having jurisdiction over its business location when it employs its first employee. However, employees are automatically covered under employment insurance from the first day of employment regardless of whether his/her employer has appropriately registered with the Labor Standards Inspection Office.

The underlying concept is that it would be unfair and against public policy to deny employment insurance coverage simply because the worker's employer neglected to comply with the law.

Part-time employees are covered when his/her work hours, work days and other working conditions are specified in employment handbooks, employment contracts and other agreements, and:

(1) period of employment is expected to be more than a year, and
(2) his/her work hours exceed 20 hours a week.


Insurance Premium Rate

The current insurance premium rate is 1.5% of a covered employee's gross monthly salary, shared between employee (0.6%) and employer (0.9%). Employee's share of premium is deducted from his/her paycheck and employer makes a contribution.


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Employment Insurance Benefits

- Unemployment Benefit
- Employment Promotion Benefit
- Educational Training Benefit
- Employment Continuation Benefit


Unemployment Benefit

Unemployment Benefit is by far the most requested benefit under the Employment Insurance system. The benefit is provided when a covered employee becomes unemployed through no fault of their own or for personal reasons.

To qualify for benefits an applicant must show that he/she:

1. has been covered for at least 6 months during the year immediately prior to becoming unemployed;

2. is able and available to work; and

3. has appropriately deregistered from employment insurance under his/her former employer.

Benefit amount ranges from 90 to 360 days of "basic daily allowance" and is determined based on age, number of months covered under the system and reason for being unemployed.

"Basic daily allowance" is calculated by dividing the total fixed salary (exclude bonuses, commissions and other payments that are not predetermined) for the 6 months immediately prior to becoming unemployed by 180, and multiplying that amount by 50% to 80%, depending on amount and age.

Minimum floor and maximum ceilings are set for basic daily allowance. As of August 1, 2009 the flooring is at 1,648 yen, and ceilings are determined as follow based on age:

Under the age of 30 or over 65: 6,290 yen
Between ages 30 and 45: 6,990 yen
Between ages 45 and 60: 7,685 yen
Between ages 60 and 65: 6,700 yen

To receive benefits, the applicant must register with Hello Work (government operated employment service office) having jurisdiction over his/her address.