When working in Japan understanding your employment contract in Japan goes beyond just the job duties. It is essential to understand the employment contract and the various types of insurance coverage available to employees. It includes the different types of insurance you’re covered by, providing vital financial security during challenging times.

In this article, we will discuss the different insurance options, including social insurance and labor insurance- the crucial safety nets, and how they provide financial support during challenging times. Whether you are a Japanese citizen or a foreign national, knowing your rights and obligations regarding insurance is crucial for a smooth and secure work experience.

Japanese employment contracts typically include coverage under two main insurance systems: social insurance (社会保険 – Shakai Hoken) and labor insurance (労災保険 – Rōsai Hoken). These programs offer financial support for various situations, including illness, aging, unemployment, and work-related injuries.

Understanding Social Insurance (社会保険 – Shakai Hoken):

Social insurance plays a vital role in providing financial assistance when faced with difficulties such as illness, aging, unemployment, or job loss. Just like paying taxes, joining social insurance is mandatory for both Japanese citizens and foreign nationals who meet the eligibility criteria. Designed to alleviate financial burdens and ensure mutual support within the society, the social insurance provides a safety net for various life events:

● Health insurance (国民健康保険 – Kokumin Kenko Hoken): Covers medical expenses for illness and injury.
● Pension insurance (厚生年金保険 – Kōsei Nenkin Hoken): Provides income replacement after retirement.
● Long-term care insurance (介護保険 – Kaigo Hoken): Offers financial assistance for long-term care needs.

Exploring Labor Insurance (労災保険 – Rōsai Hoken):

Labor insurance encompasses two types of coverage: Employment insurance and Workers’ compensation insurance. Its purpose is to protect employees in various situations and prevent financial hardships. Unlike social insurance, employers are responsible for enrolling their employees in labor insurance, which offers two key benefits:

● Employment insurance (雇用保険 – Koyō Hoken): Provides financial assistance to those who lose their jobs, including both voluntary resignations and dismissals.
● Workers’ compensation insurance (労災保険 – Rōsai Hoken): Covers medical expenses and income replacement for work-related injuries or illnesses.

Employment Insurance (雇用保険 – Koyō Hoken) Explained:

Employment insurance offers financial assistance to individuals who have lost their jobs until they find new employment. It covers not only cases of dismissal but also situations where employees voluntarily leave their positions. However, the waiting period for receiving benefits is longer for those who left their jobs voluntarily compared to those who were dismissed.

To be eligible for employment insurance benefits, certain conditions must be met:

● For voluntary resignations: The individual must have been enrolled in employment insurance for at least 12 months within the 2 years preceding their resignation date.
● For dismissals or other employer-initiated terminations: The individual must have been enrolled in employment insurance for at least 6 months within the 1 year preceding their termination date.
● The individual must not have secured new employment.
● The individual must actively search for new job opportunities.
● Once a suitable job is found, the individual must be ready to start working immediately.

The process of applying for employment insurance benefits is done through the local Hello Work office, where individuals will need to obtain a “Certificate of Employment Termination” from their former employer. This document is usually issued within 2 to 3 weeks after leaving the company. If you have any questions or need further information, it is recommended to visit the nearest Hello Work office.

For more information about Hello Work, visit the official website: Hello Work

Additional Coverage for Life Events

Apart from job loss, individuals may be eligible for financial support through employment insurance during periods of absence from work due to childcare or family caregiving responsibilities.

Take away

Understanding the insurance coverage provided under employment contracts in Japan is crucial for both employees and employers. Social insurance and labor insurance serve as safety nets, providing financial support during challenging times. By familiarizing yourself with the eligibility requirements and application processes, you can ensure that you receive the necessary assistance when needed. Remember to consult official government resources for detailed information on insurance coverage and your rights as an employee in Japan.

Key takeaways:

● Employment contracts in Japan typically include social and labor insurance coverage.
● Social insurance is mandatory for eligible employees, while employers enroll workers in labor insurance.
● These programs offer financial support for various situations, including illness, aging, unemployment, and work-related injuries.
● Understanding eligibility and application processes is crucial for accessing benefits.

For more information on labor insurance, visit the official website of the Ministry of Health, Labour and Welfare: Ministry of Health, Labour and Welfare

※Translated from a Japanese article. Find the original article here.