Employment Insurance, called Koyo Hoken (雇用保険) in Japanese, is one of five essential social insurances in Japan. It helps provide benefits to ensure stable livelihood of people who have become unemployed or unable to work.
Table of Contents
- What is Koyo Hoken (雇用保険)?
- Who Are Covered by Employment Insurance in Japan
- Benefits Provided by Employment Insurance in Japan
- How to Apply for Employment Insurance in Japan
- Unemployment Rate in Japan
- Find a Job in Japan with WeXpats
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What is Koyo Hoken (雇用保険)?
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Koyo Hoken (雇用保険) is “Employment Insurance” in Japan. Also known as Shitsugyo Hoken (失業保険) or “Unemployment Insurance”, it is one of five essential social insurances provided to employees in Japan. Labour Insurance (労働保険, Roudou Hoken) refers collectively to Koyo Hoken and Workers’ Accident Compensation Insurance.
Koyo Hoken is managed by Hello Work. Its main purpose is to support the livelihood of those who have become unemployed or whose incomes have reduced due to childcare, nursing care, etc. Apart from the most common unemployment benefit, Koyo Hoken also covers childcare leave, nursing care leave, jobseeker support services, etc. benefits.
Koyo Hoken is a mandatory insurance system for employees in Japan, funded through contributions from both employers and employees. Businesses also benefit from Koyo Hoken. There are subsidies provided to businesses that hire people who have difficulty finding employment, such as people with disabilities, single mothers, and elderly people.
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Who Are Covered by Employment Insurance in Japan
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Employment Insurance is mandatory for those who work 20 hours or more a week, and are expected to be employed for 31 days (1 month) or more.
The following groups of people are not eligible for employment insurance:
- Representative Directors and Directors of Company (excluding those who hold positions similar to employees)
- Freelancers / Self-employed
- Civil Servants
- Cohabiting Relatives
- Domestic Servant
- Daytime Students
Benefits Provided by Employment Insurance in Japan
Employment Insurance in Japan provides a range of benefits, helping individuals not only during periods of unemployment but also in cases where continuing work becomes difficult due to child-rearing or when looking to change jobs. Key benefits include:
Basic Allowance / Unemployment Allowance (失業給付)
Financial assistance for those who have become unemployed to help support their livelihood until they find a new job. To receive this benefit, you must have been enrolled in employment insurance for at least 6 months or 12 months, depending on the reason for loss of employment. The amount of allowance claimable is generally 50% to 80% of your income.
Skill Acquisition Allowance
An allowance for those who are eligible to receive basic allowance and are going to take designated vocational training. Consists of two types of allowances for attendance and commuting. This allowance is provided to help jobseekers improve their skills for the purpose of reemployment.
Sickness and Injury Benefit
Financial assistance for those who are eligible for unemployment benefits are applying for a new job but find themselves unable to work for over 15 consecutive days due to illness or injury.
Elderly Job Seeker Benefit
A lump sum payment for elderly (aged 65 or older) who become unemployed. If the insured period is over 1 year, then 50 days worth of allowance will be provided. If less than 1 year, then 30 days worth of allowance will be provided.
Reemployment Allowance
A lump sum payment is paid to those who are receiving basic allowance if they are re-employed with at least 1/3 of designated basic allowance receiving days remaining and meet the payment requirements. If there is at least 1/3, then 60% of the remaining allowance will be paid. If at least 2/3, then 70% of the remaining allowance will be paid.
Wide Area Job Search Expenses
Subsidies will be provided for travel and accommodation expenses incurred when eligible recipients begin wide area job hunting activities through referrals by Hello Work to find work.
Relocation Cost Benefit
Costs to relocate in order to take up a job introduced by Hello Work will be covered.
Continued Employment of Elderly Workers
For the continued employment of elderly workers, 15% of wages to elderly people will be covered in the event that their wages are reduced to less than 75% due to reemployment, etc. The benefit rate is scheduled to be reduced to 10% in 2025.
Childcare Leave Benefits
Financial assistance for those who take childcare leave is provided until the child turns 1 year old.
Nursing Care Leave Benefits
Financial assistance for those who take time off work to provide nursing care to family members.
How to Apply for Unemployment Allowance in Japan
As mentioned above, the unemployment allowance (or basic allowance) is financial support provided to those who have become unemployed.
Unemployment allowance is administered by Hello Work, who will review your application and decide whether you satisfy the requirements to receive the benefits. The duration and amount of allowance is determined by your period of employment and salary amount.
The conditions to satisfy to receive the benefit include:
- Insured for at least 12 months (1 year) before losing your job or insured for at least 6 months before losing your job on account of company bankruptcy or restructuring
- Willing and able to seek new employment
To apply for unemployment allowance, visit the Hello Work office in your jurisdiction with the following:
- Separation Notice (雇用保険被保険者離職票, Koyou Hoken Hihokensha Rishokuhyou) - from previous employer
- Employment Insurance Card (雇用保険被保険者証, Koyou Hoken Hihokenshashou) - from previous employer
- Certificate of Job Search (求職票, Kyuushokuhyou) - from Hello Work
- Photograph (2x)
- Savings Account Book
- Residence Card (or other form of identification e.g. Japanese driver’s licence, passport, health insurance card)
- Personal Seal
The timing when you start receiving benefit payment also depends on the reason for leaving your job. If you lost your job due to the company’s circumstances, then you can receive benefit payments after a 7 day waiting period. However, if it is due to personal circumstances, then there is an additional 2 month wait.
Unemployment Rate in Japan
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During the COVID-19 pandemic, Japan's unemployment rate initially remained lower than that of many other countries but still rose from its usual levels. Pre-pandemic, Japan had a consistently low unemployment rate of around 2.4% to 2.5%. However, as the pandemic's economic effects began to take hold, it increased to around 3% in the second half of 2020, peaking at 3.1% in October 2020.
As of September 2024, Japan’s unemployment rate is 2.4%, down slightly from 2.5% in August and consistent with a trend of low unemployment over recent years. This rate is lower than Japan’s long-term average of 2.72% and reflects a relatively stable labour market, bolstered by economic policies aiming to maintain employment despite inflationary pressures and increased wage demands.
To Close
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Koyo Hoken (雇用保険), Japan’s employment insurance is a system that supports and encourages those who are willing and able to find a new job after losing employment. It helps stabilise residents’ livelihoods until they become independent once more. For those who are interested in working in Japan, be reassured that all is not lost when one loses their job, and with time and effort, one can regain their footing again.
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