Unemployment insurance (Japan)

Unemployment insurance (雇用保険, koyou hoken), also known as 失業保険 (shitsugyou hoken) is the "user pays" system of unemployment benefits that operate in Japan. It is paired with Workers' Accident Compensation Insurance (労働者災害補償保険, rousai hoken) and referred to collectively as Labor insurance (労働保険, roudou hoken).^[1][2] It is managed by Hello Work.

System

Japanese unemployment insurance is closer to the US or Canadian "user pays" system than the taxpayer funded systems in place in countries such as the United Kingdom, New Zealand, or Australia. It is paid for by contributions by both the employer and employee.^[3]

Requirements

Workers enrolling in unemployment insurance must be working at least 20 hours per week, and to expect to be employed for at least 31 days. Employees who are dispatched to Japan from overseas and who already have coverage in a similar scheme are not required to enroll in Japanese unemployment insurance.^[4]

Procedures

On leaving a job, employees are supposed to be given a "Rishoku-hyo" document showing their ID number (the same number is supposed to be used by later employers), employment periods, and pay (which contributions are linked to). The reason for leaving is also documented separately.

Premiums

Premiums are calculated as a certain percentage of each worker's total wage. Under the latest revision in April 2012, the insurance premium rate is 1.35% (the employer paying 0.85% and the worker paying 0.5%) with the exception of a few kinds of jobs.^[5]

Payments

The circumstances under which an employee left their position affect eligibility, timing, and amount of benefits.^[6] The length of time that unemployed workers can receive benefits depends on the age of the employee, and how long they have been employed and paying in.^[7]

It is supposed to be compulsory for most full-time employees.^[8] If they have been enrolled for at least six months and are fired or made redundant, leave the company at the end of their contract, or their contract is non-renewed, the now-unemployed worker will receive unemployment insurance. If a worker quit of their own accord they may have to wait between one and three months before receiving any payment.

Rates

In July 2016 Japan's unemployment rate was 3%.^[9] Japan's unemployment rate has remained relatively low over the years. However July 2016 set the record low in twenty-one years. Despite this recent record low unemployment, Japan has record high job availability.^[10] Japan's unemployment rate might fall even lower based on their job availability.^[11] Japan's welfare state utilizes an egalitarian principle designed at providing equal aid to all individuals.^[12] This style facilitates maintaining low unemployment percentage, high job availability percentage, and a growing economy.^[13] Although unemployment rates are dynamic there are many intervening variables correlating to its growth or decline.^[14]

References