What is social insurance?
It has two meanings: a broad sense and a narrow sense. Let us first confirm what each means.
Social insurance in the broad sense
There are four types: Health Insurance, Employees' Pension Insurance, Employment Insurance, and Workers' Accident Compensation Insurance.
Social insurance in the narrow sense
It consists of two types: Health Insurance and Employees' Pension Insurance, while Employment Insurance and Workers' Accident Compensation Insurance are called labour insurance.
Companies and employees do not choose whether to enroll; if the applicable conditions are met, enrollment is required in principle.
First, under what circumstances does the obligation to enroll in these forms of social insurance (in the broad sense) arise?
Social insurance enrollment obligations
Health Insurance and Employees' Pension Insurance
【Covered businesses】
For corporate business establishments, enrollment is compulsory in principle for all establishments, regardless of the number of employees.
A sole proprietorship is subject to compulsory enrollment if it regularly employs five or more people.
However, among sole proprietorships, there are voluntarily covered businesses that are not subject to compulsory coverage. Voluntarily covered businesses include sole proprietorships with fewer than five employees, and sole proprietorships in 【primary industries, service industries (restaurants, beauty salons, etc.), legal services, and religious activities, regardless of the number of employees】.
To become a voluntarily covered business, consent must be obtained from at least half of the employees, procedures must be completed with the pension office, and approval must be received.
The reason voluntarily covered businesses exist is that Health Insurance has a public alternative in National Health Insurance, and Employees' Pension Insurance has National Pension Insurance; this is why the option is “voluntary.”
For Employees' Pension Insurance, the above applies, as do vessels enrolled in Seamen's Insurance.
【Covered workers】
Daily or weekly working hours must be at least 3/4 of those of regular employees, and monthly working days must also be at least 3/4 of those of regular employees.
However, these are only guidelines for judgment. If an overall assessment of the actual circumstances finds that a worker is comparable to a regular employee, that person will be an insured person.
Quite a few people see this as “insurance that regular employees enroll in,” but the form of employment (regular employee, part-timer, etc.) is irrelevant, so take care.
Workers' Accident Compensation Insurance and Employment Insurance
【Covered businesses】
Workers' Accident Compensation Insurance → all business establishments that employ workers
Employment Insurance → all business establishments where workers are employed
※ Both types of insurance exclude certain primary-industry sole proprietorships.
【Covered persons】
Workers' Accident Compensation Insurance → all workers employed by a covered business.
Employment Insurance → prescribed weekly working hours of at least 20 hours and an expected period of employment of at least 31 days. However, people newly employed at age 65 or older, among others, cannot enroll.
Businesses and employees to which the above applies must complete the necessary procedures.
Actual procedures for enrolling in social insurance
Health Insurance and Employees' Pension Insurance
Within five days of the event triggering enrollment, submit a New Coverage Notification (a consent form is required for a voluntarily covered business), together with the required attachments, to the pension office with jurisdiction over the business establishment.
At the same time, complete and submit an Acquisition of Insured Status Notification with the information for the person enrolling (and, for a person with dependents, a Dependent Change Notification). If these documents are not submitted, a health insurance card will not be issued.
They may be submitted in person at the counter, by post, or electronically.
Employment Insurance and Workers' Accident Compensation Insurance
Submit a Labour Insurance Relationship Establishment Notification (within 10 days of hiring) to the Labour Standards Inspection Office, and a Labour Insurance Estimated Premium Declaration (within 50 days of hiring) to the Prefectural Labour Bureau with jurisdiction, attaching a certified registry copy in each case.
As labour insurance premiums must be paid within 50 days, I recommend completing the procedures early.
For Employment Insurance, it is also necessary to attach the required documents and submit an Employment Insurance Establishment Notification to the Hello Work office (Japan’s public employment service) with jurisdiction over the business establishment within 10 days of the date of establishment.
At the same time, complete and submit an Acquisition of Insured Status Notification with the information for the person enrolling.
Note that you cannot complete procedures to establish Employment Insurance unless labour insurance has been established, so complete that first.
The procedures may be a little troublesome, but if they are neglected, an administrative investigation may require you to pay premiums retroactively for two years, and in the worst case, you may face penalties.
Moreover, if an employee gives birth, is injured, has an accident, or dies, various allowances and benefits will not be paid.
Both the company and its employees are exposed to risk, so put the necessary arrangements in place before trouble arises.