Outline of Japan Employment Insurance System-Company Formation_Trademark Registration_Tax Service - Hong Kong CPA

KNOWLEDGE

Hot Labels

hong kong company singapore company u.s. business bank account hong kong catering business

Service Scope KAIZEN CPA provides Audit , Accounting, Tax Advisory, Hong Kong Company Formation, Offshore Company Registration, China Company Formation, Trademark Registration, Tax Service.

Outline of Japan Employment Insurance System

【Font：L M S】

Outline of Japan Employment Insurance System

Employment insurance (in Japanese, “雇用保険”) in Japan is mainly designed to provide financial assistance to unemployed workers, workers who have difficulty in continuing employment, and workers who have stopped working for the purpose of raising children, etc., aiming to promote employment and improve the living and working conditions of workers. In addition, employment insurance offers various financial assistance for those workers who wish to have education and training to improve their working ability. Generally speaking, Employment Insurance is one of the most important social insurances in Japan, which is aimed at preventing unemployment, improving employment status, increasing employment opportunities, developing working ability, and improving the welfare of the workers.

Employment insurance was the predecessor of unemployment insurance. Unemployment insurance was established in 1947 to safeguard the livelihood of the unemployed, providing unemployment benefits to unemployed workers in response to the difficulties caused by unemployment. 27 years later, the Japanese government has based on the original basis, incorporating the employment improvement division, the ability development division, and the employment welfare division into one insurance system and established employment insurance, which replaced the unemployment insurance system. Thereafter, the employment insurance system has been reformed several times to become a system that is more comprehensive and systematized for today.

From 1 January 2022, the “Employment Insurance Multi Job Holder System” (in Japanese, “雇用保険マルチジョブホルダー制度”) for workers over the age of 65 has come into effect, raising widespread attention in Japan and overseas

In this passage, referring to the information from the Japan Ministry of Health, Labour and Welfare, Kaizen will briefly introduce the Japan Employment Insurance System for the reference to current and potential clients. In addition, Kaizen do provide services on Japanese social insurance service and payroll service, please contact our consultants for further information.

Employment Insurance

Employment insurance is a mandatory social insurance administered by the Japanese government for unemployment and employment assistance, in principle applicable to all business entities that have hired employees. Employment insurance is supported by the Employment Insurance Act (in Japanese, “雇用保険法”), and the insurer is the Japanese government, financed by premiums paid by employees and employers, in addition to the national treasury. Employment insurance is collectively called labour insurance (in Japanese, “労働保険”), together with the industrial accident compensation insurance (in Japanese, “労働者災害補償保険”).

Structure of Japan Employment Insurance System

Japan Employment Insurance System categorized into three main categories:

(1)

Benefits for Unemployment (in Japanese, “失業等給付”)

There are four types of unemployment benefits as follows:

(a)	Benefits for insured person who seeking for employment. (i) Job Applicant Benefits for Generally Insured Persons (in Japanese, “一般被保険者の求職者給付”): Including, basic allowance, skill acquisition allowance and lodging allowance (contains lecture receiving allowance and transportation allowance), and injury and disease allowance. (ii) Job Applicant Benefits for Continuously Insured Elderly Persons. (in Japanese, “高年齢継続被保険者の求職者給付”) (iii) Job Applicant Benefits for Specially Insured Persons in Short-Term Employment. in Japanese, (“短期雇用特例被保険者の求職者給付”) (iv) Job applicant benefits for Insured day workers. (in Japanese, “日雇労働被保険者の求職者給付”)
(b)	Benefits for promoting employment (in Japanese, “就職促進給付”). (i) Employment promotion allowance (in Japanese, “就業促進手当”): Including, re-employment allowance, reemployment settlement allowance, and job-seeking allowance for regular employment. (ii) Relocation expense. (in Japanese, “移転費”) (iii) Wide area job-seeking activity expenses (in Japanese, “広域求職活動費”): Including, short-term training fee, job-seeking services fee)
(c)	Educational training benefits (in Japanese, “教育訓練給付”).
(d)	Continuous employment benefits (in Japanese, “雇用継続給付”) (i) Continuous employment benefits for the elderly (in Japanese, “高年齢雇用継続給付”): Including, continuous employment benefits for the elderly, re-employment benefits for the elderly (ii) Nursing care leave benefits (in Japanese, “介護休業給付”)

(2)

Childcare leave benefits (in Japanese, “育児休業給付”): Including, basic childcare leave benefits and re-engagement benefits for persons taking childcare leave.

(3)

The two programs.

(a) Employment stabilization programs.
(b) Human resources development program

Applicable Place of Business (in Japanese, “適用事業所”)

Applicable place of business is a place of business that has the obligation to enroll its employees in employment insurance. Even if there is only one employee, as long as the employee meets the requirements for the employment insurance, the place of business to which the employee belongs is an applicable place of business.

For a business place with fewer than five employees, service businesses such as beauty salons and restaurants, as well as individual business establishments operating in the fishery, forestry, agriculture, and aquaculture industries (even if they have more than five employees) are considered as a "temporary voluntary applicable business place for purposes of employment insurance" (in Japanese, “雇用保険暫定任意適用事所”). When more than 50% of the employees agree to participate in the insurance, the employer can submit an application, and it will be recognized as a “voluntary applicable business place for purposes of employment insurance” (in Japanese, “雇用保険任意適用事所”). after the application has been approved.

Notably, business entity employing ship's crews is special. Even if crew members and laborers other than crew members work at the same facility under an employment contract with the same employer, it is considered as having more than two separate applicable business places, provided that crew members and laborers other than crew members cannot be enrolled in the one applicable business place at the same time. In addition, employers in the fishery, forestry, agriculture, and aquaculture industries that have crew members are recognized directly as applicable place of business.
Insured Person

An employment insurance insured person is a laborer who is employed by an applicable place of business, but those who meet the requirements of Article 4 or 6 of the Employment Insurance Act, or Article 3-2 or 4 of the Regulations for Enforcement of the Employment Insurance Act, are not considered as an insured person. Once a laborer meets the requirements of employment insurance, he/she is mandatorily enrolled as a participant with no right to refuse, regardless of whether his/her intention to participate or not.

Premiums

According to the Employment Insurance Act, Article 68, the premiums refer to the Act on the Collection, etc. of Insurance Premiums of Labor Insurance (in Japanese, “労働保険の保険料の徴収等に関する法律”), the initial premium rates for Employment Insurance are shown in the table below:

Industry Segmentation	Premium Rate	Benefits for Unemployment	The Two Programs	Contribution
Industry Segmentation	Premium Rate	Benefits for Unemployment	The Two Programs	Employer	Employee
General Industry	1.55%	1.2%	0.35%	0.95%	0.6%
Agriculture, Forestry and Fisheries/Japanese Sake Production Industry	1.75%	1.4%	0.35%	1.05%	0.7%
Construction Industry	1.85%	1.4%	0.45%	1.15%	0.7%

Notably, industries in the agriculture, forestry and fishery industries which will not be closed or reduced in size due to season changes, designated by the Minister of Health, Labour and Welfare, are regarded as “general industries,” include breeding of cows, horses, chickens and pigs, as well as dairy farming, gardening, aquaculture in inland waters, and industries employing boat crews.

According to the Act on the Collection, etc. of Insurance Premiums of Labor Insurance, Article 12, (8) and (9), the Minister of Health, Labour and Welfare may adjust the insurance premium rate within the range of 0.4% up or down based on the opinion of the Labour Policy Deliberation Council, and may also adjust the ratio of the portion on the two program within the range of 0.05% up or down under prescribed conditions, and the adjusted rate will be effective for one year at the most.

For example, the premium rates for FY2020, affected by the COVID-19 outbreak, are shown in the table below:

Industry Segmentation	Premium Rate	Benefits for Unemployment	The Two Programs	Contribution
Industry Segmentation	Premium Rate	Benefits for Unemployment	The Two Programs	Employer	Employee
General Industry	1.35%	1.0%	0.35%	0.85%	0.5%
Agriculture, Forestry and Fisheries/Japanese Sake Production Industry	1.55%	1.2%	0.35%	0.95%	0.6%
Construction Industry	1.65%	1.2%	0.45%	1.05%	0.6%

Duration

An insured person who does not apply for Employment Insurance benefits within the application period can submit an application before the expiration date and will still be able to receive the benefits as long as the conditions for the benefits are met. According to the Ministry of Health, Labour and Welfare, the following table shows the validity period of each type of benefit under the Employment Insurance System:

Benefits	Validity Period
Unpaid Benefits for Unemployment	Within 2 years from the day after the eligible person's death
Benefits for employment	Within 2 years from the date of employment
Benefits for re-employment	Within 2 years from the date of employment in a position that lasts for more than 1 year
Benefits for promoting employment stabilization	Within 2 years from the day following the day on which 6 months have elapsed since the day of employment on which the re-employment allowance was received.
Benefits for stabilized employment	Within 2 years from the next day of stabilized employment
Relocation Expenses	Within 2 years from the next day of relocation
Wide area job-seeking activity expenses	Within 2 years from the next day after the date of completion of the wide area job-seeking activity expenses
Short-term training fee	Within 2 years from the next day after the completion of the course
Job-seeking services fee	Within 2 years from the next day of using job-seeking services fee
General educational training benefits	Within 2 years from the day after the completion of the course.
Professional educational training benefits	Within 2 years from the day following the last day of the payment period notified by the Hello Work (in Japanese, “公共職業安定所”); When additional payment is made, within 2 years from the date of employment as a general insured person after completing the training and obtaining the qualification.
Educational training support benefits	Within 2 years from the day after the last day of the payment period
Continuous employment benefits for the elderly	Within 2 years from the next day of the last day of the month of payment
Re-employment benefits for the elderly	Within 2 years from the next day of the last day of the month of payment
Childcare leave benefits for the period giving birth	Within 2 years from the date of childbirth (or the expected date of childbirth if the birth occurs before the expected date) after 8 weeks.
Childcare leave benefits	Within 2 years from the next day of the last day of the month of payment
Nursing care leave benefits	Within 2 years from the next day upon the end of the leave.

Benefits Restrictions

To prevent unnecessary dependence and laziness, the Employment Insurance System has established a benefit limitation system (in Japanese, “給付制限”) avoiding workers who receive benefits becoming unduly dependent. The benefit limitations (including, but not limited to):

(1)	Improper Reasons for Separation from Employment From October 1, 2020, workers who leave their jobs with an improper reason, after the second separation from employment within 5 years, will not be able to receive job applicant benefits for 2 months from the date of leaving their jobs. If a worker leaves his/her job more than 2 times within 5 years, from the 3rd time he/she leaves his/her job, he/she will not be able to receive job applicant benefits for 3 months from the date of leaving his/her job. If a laborer is dismissed because he or she has taken on significant responsibilities, no matter how many times he or she has left his or her job within five years, he or she will not be able to receive job applicant benefits for three months from the date of his or her departure from his or her job. When a worker who has left his/her job with improper reason attends a public vocational training course designated by the Director of the Hello Work during the period of benefit restriction, the restriction will be lifted during the period of attendance. During the period of benifit restriction, unemployment will not be recognized. The determination of whether the reason for leaving the job is proper does not affect the number of days for which benefits are payable. If an insured person with less than one year's participation leaves his/her job with an improper reason, a strict judgment will be made based on objective information.
(2)	Improper Refusal of Employment If an insured person who is eligible for benefits refuses job referral, job guidance, job training, etc. from Hello Work without a proper reason, he/she will not be able to receive job applicant benefits for one month from the date of refusal. The following cases are considered to be improper refusal of employment: (a) After enrolling in a career course instructed by the Director of Hello Work and before completing the course, withdrawal from the course due to one's own unfavourable reasons. (b) After attending a career course instructed by the Director of Hello Work, intentionally behaved in a manner that violated the regulations, resulting in dismissal from the school. (c) Failure to present at the company on the date specified by Hello Work. (d) Intentionally acting in a manner unfavourable to the hiring process during an interview, leading to a result that not being hired by a referred company. However, if the job referred by the Hello Work is objectively unsuitable for the laborer in terms of working ability requirements, form of work, location of work, or if the wage level is significantly lower than the market level, as well as if in the event of a strike or lockout at the company, the refusal of the laborer to accept the job does not apply to the above mentioned regulations.
(3)	If a laborer is found to have obtained Employment Insurance Benefits by fraudulent means, such as false declarations, he / she will not be able to receive the benefits for the remaining payment period. If the laborer has a compelling reason for obtaining the benefits, he / she may be able to keep a certain amount of the benefits. The government has the right to claim partial or full return of benefits from those who have fraudulently claimed the benefits and may even request up to two times the amount of benefits based on the principle prescribed by the Minister of Health, Labor, and Welfare. Furthermore, if a worker is found repeatedly separating from the same employer for three continuous times within 3 years, while the worker receiving benefits even once, the above penalties will be applied if the worker is again employed by the same employer during the period of payment of the benefits.

Kaizen with experienced team of professionals, providing services of company formation, registration, and application for several types of permits/licenses and subsequent maintenance, tax planning and auditing services, please consult our consultants for more details.

Referenced from：

1. e-Gov 法令検索 -雇用保険法

2. 厚生労働省 -雇用保険制度

Disclaimer

All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.

If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:
Email: info@kaizencpa.com
Tel: +852 2341 1444
Mobile : +852 5616 4140, +86 152 1943 4614
WhatsApp/ Line/ WeChat: +852 5616 4140
Skype: kaizencpa

KNOWLEDGE

Hot Labels

SHARE

Outline of Japan Employment Insurance System

Related Articles