Japan’s Employee Benefits News Q3 2024
Japan’s Employee Benefits News for Q3 2024 includes many new requirements for employers that pertain to people with disabilities, unemployment benefits, the expansion of social insurance coverage, a minimum wage increase, a rise in retirement age, and an extension of flexible working options for working parents.
Increased mandatory employment rate for people with disabilities
The mandatory employment rate at which employers must hire people with disabilities has increased from 2.3% to 2.5%, and it will further increase again to 2.7% on July 1, 2026. The requirement now applies to companies with 40 or more regular employees (those who work 30 hours a week or more with employees who work between 20 and 30 work hours per week, counted as 0.5).
Unemployment benefits increased
Effective August 1, 2024, unemployment insurance benefits were increased by approximately 1.7% across the board following the Employment Insurance Act. This change reflects the annual change in Japan’s basic wage.
All employers are required to participate in unemployment insurance as part of the compulsory social security insurance program. All employees are enrolled in unemployment insurance when they start working. Involuntarily unemployed individuals are eligible for unemployment benefits so long after 6 months of contributions in the previous 12 months.
Expansion of social insurance coverage
From October 2024, part-time workers at companies with 51 to 100 employees will now qualify to be covered by the Japanese social insurance program.
Minimum wage increase
Nationwide average hourly wage to 1,055 yen per hour as of Oct 1, 2024 (part-time jobs)
Retirement age raised
As of April 2025, it will be mandatory for companies in Japan to ensure employment until age 65.
Extension of flexible working options to working parents
From April 1, 2025, there will be changes affecting all employers and their employees with young children, with additional measures applying to employers with 100 or more employees, requiring:
- Employers to offer new work style options to parents
- Expand the availability of childcare leave
- Disclose information on leaves, benefits, and usage
The legislation was approved on March 12, 2024.
From April 1, 2025, employers will be required to offer working parents (who have been working for their employer for at least 1 year) with children aged 3 to the start of elementary school with a selection of work style options. These options include policies such as:
- Remote working
- Flexible starting and ending times
- Shorter working days
- Additional leave options, and more
- Employers must offer at least 2 options
For parents with children under the age of 3, employers will be required to allow them to work from home.
Currently, parents can apply for an exemption from required overtime until their children turn 3 years old. Under the new legislation, effective 1 April 2025, that exemption will be extended until the child reaches elementary school.
Currently, 5 days of childcare leave per year (sometimes called parental leave) are available to parents with children who have not yet started school. Effective 1 April 2025, the leave will be available until the child completes third grade. In addition, the leave would be available to allow parents to attend nursery school entrance ceremonies or look after their child while the school is closed due to infection.
Required disclosure
Under the new legislation, this requirement will be extended to employers with 300 or more employees. In addition, employers with 100 or more employees will be required to establish a target percentage for how many employees use childcare leave.
Employers are required to inform employees of the childcare leave system and all benefits available to them once an employee informs their employer that they or their spouse are pregnant.
Employers will also be required to provide employees aged 40 or higher, who may find themselves choosing between working and caring for an elderly parent, with information on support available, such as flexible work or leave entitlements. Employers must make an effort to allow teleworking in such cases.
This article about Japan’s Employee Benefits News for Q3 2024 is provided by Cornes, Asinta’s benefits consulting Partner in the country. If you need support with your employee benefits in Japan, please contact Asinta, and we will put you in touch with the local experts at Cornes.