The term “Employee benefits” is widely used globally. The employee benefits vary across different countries such as the types of schemes, insurance and subsidies. The purpose of employee benefits is to increase the economic security of employees and reduce the likelihood of retention. In Japan, they are known for their competitive strength in the world market as well as an innovation hub. While employees in Japan strives to work hard and cater to better success in the economy, these employees are provided with employee benefits.
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Fukuri Kosei (Employee Benefit System in Japan)
Japan has its employee benefits practice called Fukuri Kosei, and this term is used when we talk about benefits given to employees of companies in Japan. Fukuri Kosei contains 2 types of employee benefits, which are “Statutory Benefits” and “Non-Statutory Benefits”.
Statutory benefits under Fukuri Kosei
Most companies with legal entities in Japan are obliged to provide statutory benefits for their permanent and contract employees. Statutory Benefit is about “Social Insurance”, which are various types of insurances to protect employees in the company.
Social Insurance
Social Insurance is a statutory insurance scheme to ensure all employees, who are
eligible for this scheme, in Japan to have a stable and secure livelihood as an
employee in Japan. Social Insurance contains below 4 types of insurances, and most
companies in Japan are required to provide them to their employees.
Health Insurance
This insurance is mainly to provide medical care benefits for the employees or their family members in the case if they fell sick or met with certain injuries in which these bills are claimable.
Employees Pension Insurance:
This insurance focuses on providing funds for employees if they are met with certain criteria. There are three types of Employee Pension Insurance such as Old-Age Pension, Disability Pension and Survivor’s Pension. The type of pension you are receiving depends on your eligibility and the conditions which you fall under.
Industrial Injury Insurance:
This insurance applies to all employees who are working in Japan. The purpose is to ensure employees are granted insurance if they suffer from injuries or fell sick during work. Besides, the family members also get to receive the benefit.
Employment Insurance:
This insurance is to support unemployed employees. The amount of benefit given will be based on the age as well as the number of years they have been working for the company.
Please visit “Social Insurance in Japan” for more information.
Non-statutory employee benefits under Fukuri Kosei
In comparison to statutory benefits, non-statutory benefits are optional benefits given by companies. Companies can decide whether they would want to provide such benefits for their employees, however, there is a market standard practice for it, and companies may face difficulties employing local talents if you do not provide sufficient employee benefits.
Below are some of the non-statutory employee benefits that are commonly practiced by Japanese companies.
Housing-related benefits
This benefit aims to provide support and reward employees to work harder. Under the housing-related benefits, employees can get housing subsidies and homeownership assistance. For instance, employees can get 50% rent subsidies or have access to a cheaper alternative if they were to buy or rent a house.
Medical care and health benefits
The purpose of this benefit is to ensure that employees are able to maintain their health and get the necessary subsidies for medical or hospitalization fees. Besides, employees are also entitled to various exercise or massage activities to provide relaxation for their busy lifestyle.
Congratulations and Condolences benefits
These benefits are provided to ensure that the employees feel a sense of belonging to the company. When employees are included, they will have the perception that the company cares for them as individuals. As a result, they will feel more motivated to work harder and achieve better success for the company.
Under the congratulations and condolences, benefit include expenses for marriage, childbirth and entry to school. Likewise, compensation for injury and illness is also included.
Culture, Sports, and Recreation benefits
In Japan, employees are known to have a stressful work life and the purpose of these benefits is to improve the well-being of the employees. The activities include company trips, discount for drinking, and recreational activities.
Furthermore, club activities are also included. For example, mountain climbing and dance club. There is also a unique activity called the Ramen club where employees will go out to eat ramen noodles together. Having such activities can increase the bonding between the employees as well as employers.
Other Employee Benefits in Japan
Although these benefits are not classified under Fukuri Kosei, there are a few more employee benefits that are commonly practiced by companies in Japan.
Leave Entitlement
Employees who are working in Japan are also entitled to common benefits such as leave entitlement and allowances. For leave entitlement, it includes annual paid leave, maternity leave, child care leave, nursing care leave and menstrual leave. On the other hand, employees are provided with allowances in the areas of transportation, overtime, housing, retirement, family and self-development.
Employees in Japan are entitled to several types of paid leaves, and also there are “Statutory Leave Entitlement” and “Non-Statutory Leave Entitlement” in Japan. And here below are some of the statutory leaves that all the companies in Japan have to provide.
Annual paid leave:
Companies are obliged to provide annual paid leave for both permanent and contract employees. Often part-time workers are also entitled to have annual leave.
Maternity leave
Female employees who are experiencing pregnancy and childbirth can be entitled to maternity leave.
Child care leave
For male and female employees who has a child of up to 1-year-olds are entitled to this leave. This leave can also be shared among the parents and the benefit is covered by the labour insurance and the company.
Nursing care leave
Employees with family members who require care will be entitled to this leave. The amount of leaves depends on the number of family members they have to take care of.
Menstrual leave
Female employees who are experiencing or struggling with extreme menstrual pains are able to take leave from work.
Please visit "Leave Entitlements in Japan" for more information.
Employee allowances
In Japan, it is also common for Japanese companies to provide their employees with different types of allowances. All the allowances below except for Overtime Payment are Non-Statutory, hence employers are able to decide it based on your company’s policy.
Transportation allowance:
Due to the long travelling distance from employees home to the work location in most cases, companies will provide transportation allowance for their employees.
Overtime allowance:
Employees who worked more than 40 hours per week are entitled to overtime allowance.
Housing allowance:
Employees who are required to transfer to other countries for work are entitled to this leave. The companies will usually reimburse a down payment for their employees.
Retirement allowance
This allowance caters to employees aged 60 and above where they are able to get monetary support.
Family allowance
Employees who are facing financial difficulties in supporting their family can be granted this allowance.
Self-development allowance
Employees who are considering upgrading their skills, as well as further their studies, are entitled to this allowance.
Please visit "Employee Allowances in Japan" for more information
Summary
To summarise, employees who are working in Japan are entitled to various employee benefits. The benefits such as Fukurikosei consist of statutory and non-statutory benefits. Additionally, there are also other benefits such as leave entitlement and allowances. If you are looking to start a career in Japan, these are some of the basic employee entitlements you should know. You can find out more on our EPS ‘’advice’’ tab to acquire more information on Japan’s industry as well as work-related news.
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