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

What is Workers' Accident Compensation Insurance?

Overview

Workers' Accident Compensation Insurance (hereinafter referred to as "Workers' Compensation") is a workplace-based compulsory coverage system that provides exclusive remedy for employees against employers for personal injuries, diseases, or deaths arising out of and in the course of employment and commuting to and from work.

Workers' Compensation is a compulsory coverage system in that all employers employing at least one employee is required by law to participate in the system. Employee, under the context of this law, is defined as an employee for the purpose of Labor Standards Law: any individual employed in an enterprise or an office and is paid wages, regardless of the type of occupation. Put another way, anyone who works for, and under the control of, another for hire, is considered an employee.

The system generally affords exclusive remedy for employees against employers for personal injuries, diseases, or deaths arising out of and in the course of employment and commuting to and from work. Employees recover without regard to fault, and the employer is spared the possibility of large tort verdicts.

Workers' Accident Compensation Insurance ordinarily does not require lengthy and costly hearings, attorney's fees, and while issues of fault do creep into compensation decisions, ordinarily compensation is assured when a work related injury or death is demonstrated.

Enrollment

Although employers are required by law to register with the Labor Standards Inspection Office with jurisdiction over its business location when it employs its first employee, employees are automatically covered under the insurance from the first day of employment regardless of whether his or her employer has appropriately completed the paper works.

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

Insurance Premium Rate

Insurance premium is fully paid by the employer. No premium is deducted from employee's paycheck like other types of social insurance.

The economic and social theory underlying Workers' Compensation is that the cost of employment related injuries, diseases and deaths ultimately should be borne by the purchasers' and consumers' products and services.

In other words, built into the cost of any products and services is the employer's insurance premium for the cost of workers' compensation.

Thus, the costs of employment related injuries, diseases and deaths are properly distributed throughout society.


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Workers' Compensation Benefits

- Medical Compensation Allowance
- Absence Compensation Allowance
- Disability Compensation Allowance
- Survivor's Compensation Allowance
- Funeral Expenses
- Injury/Sickness Compensation Allowance
- Nursing Compensation Allowance
- Secondary Medical Examination Allowance


Medical Compensation Allowance

When a covered employee is injured or become sick due to events arising out of and in the course of employment or commuting to and from work, he/she is entitled to an allowance to compensate for medical expenses.

Benefit is offered in the form of actual medical services. Covered employee is entitled to examination and treatment at government designated medical institutions free of charge.

Absence Compensation Allowance

When a covered employee is absent from work for more than 3 days (does not have to be consecutive) due to injury and sickness arising out of and in the course of employment or commuting to and from work, he/she is entitled to receive an allowance to compensate for loss of income for not being able to work.

Allowance is equivalent to approximately 60% of the average daily wage for each day absent, for a maximum period of one year and 6 months. Amount is subject to adjustment if the employee receives payments from his/her employer or from another source.

Disability Compensation Allowance

When a covered employee is left with disability after cure of injury or sickness arising out of and in the course of employment or commuting to and from work, he/she is entitled to receive annuity or allowance depending on the degree of disability to compensate for the loss of future income.

Employees diagnosed with disability degrees 1 to 7 are entitled to receive payment in the form of annuity. Annuity amount is equivalent to approximately 131 to 313 days worth of average wage, depending on the degree of disability.

Employees diagnosed with disability degrees 8 to 14 are entitled to receive lump-sum payment. Payment is equivalent to approximately 153 to 245 days worth of average wage, depending on the degree of disability.

Survivor's Compensation Allowance

When a covered employee dies due to injury or sickness arising out of and in the course of employment or commuting to and from work, his/her survivor(s) is entitled to receive annuity or allowance depending on the existence of survivors qualified to receive annuity.

Survivors must have lived with and financially supported by the deceased employee to be qualified to receive annuity. Below is the order in which qualified survivors are entitled to receive annuity:

1. wife
2. child (children) under the age of 18 or with disability
3. parents(s) over the age of 60 or with disability
4. grandchild (grandchildren) under the age of 18 or with disability
5. grandparents(s) over the age of 60 or with disability
6. sibling(s) under the age of 18 or over the age of 60, or with disability
7. husband between the ages of 55 and 60
8. parent(s) between the ages of 55 and 60
9. grandparent(s) between the ages of 55 and 60
10. sibling(s) between the ages of 55 and 60

Annuity is equivalent to approximately 153 to 245 days of average wage, depending on the rank above.

If qualified survivors did not exist at the time of employee's death, lump-sum payment is made to the employee's survivor(s) in the following order:

1. spouse
2. child (children), parent(s), grandchild(grandchildren), and grandparent(s) financially supported by the deceased employee
3. child (children), parent(s), grandchild (grandchildren), grandparent(s), and sibling(s) other than those above

Lump-sum payment is equivalent to approximately 1000 days of average wage.

Funeral Expenses

When a covered employee dies due to injury or sickness arising out of and in the course of employment or commuting to and from work, his/her survivor(s) to who will be preparing funeral for the deceased employee is entitled to receive payment to compensate for expenses associated with the funeral.

Benefit amount is 315,000 yen plus approximately 30 days of average wage. However, if this does not total 60 days of average wage, then approximately 60 days of average wage.

Injury/Sickness Compensation Annuity

When a covered employee is left with disability after a year and 6 months treatment of injury or sickness arising out of and in the course of employment or commuting to and from work through Medical Compensation Allowance, he/she is entitled to receive annuity to compensate for the loss of future income.

Annuity payment is equivalent to approximately 245 to 313 days of average wage, depending on the degree of disability.

Nursing Compensation Allowance

When a covered employee receiving Disability Compensation Annuity or Injury/Sickness Compensation Annuity requires nursing on regular basis, he/she is entitled to receive allowance to compensate for expenses associated with receiving nursing services.

Allowance amount is equivalent to the actual amount paid for nursing services but limited to 104,590 yen.

Secondary Medical Examination Allowance

When a covered employee is diagnosed with irregularity in cerebral and heart examination caused by work, he/she is entitled to request further medical examination.

Benefit is offered in the form of actual medical services. Covered employee is entitled to further examination at government designated medical institutions free of charge.