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Social security schemes applied to part-time employees
Friday, 18 July 2014 00:00

Currently in Japan, social insurance scheme only covers full-time employees. However, the scheme will be expanded to cover even part-time employees starting from October 2016. Social insurance scheme requires that the employee and employer bear 50-50 of the monthly contribution. The expansion of the scheme aims to help provide fair compensation and address the low pension/no-pension problems for part-time employees as well as secure more finance source for Japan’s social security system.

As such, any employees who fall in the following are defined as part-time employees:

Working time: over 20 hours/week

Monthly salary: 88,000 yen or above (Yearly income: 1,060,000 yen or above)

Working period: over one year

Not applicable to student workers

One who satisfies all the conditions stated in ①~④ can be covered by the scheme.

As a transitional measure, company with 501 employees or above

Once effective, the major impacts of the scheme on both employee and employer can be known as follows:

i) Increase in personnel expense and office work burden for employer as it requires the employer to bear half of the social insurance contribution monthly.

ii) Likelihood of request for working time adjustment (more or less working hours) from the part-time employee so as to avoid or offset against the social insurance portion assumed by the part-time employee or even their leaving the job if conditions unmet.

 

Until the effective date, there is still enough time left for the employer to prepare well to deal with any problem may arise then.

 


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