Employment Insurance System: Strengthening Safety Nets for Nonregular Employment Imperative

Part-time work allows for flexible work styles, but there is no security in the event of unemployment or taking time off from work, and it is easy for such employees’ lives to become unstable. As the number of nonregular workers increases, it is important to strengthen the employment-related safety net.

The Health, Labor and Welfare Ministry has compiled a set of proposals to review the employment insurance system. The ministry aims to submit related bills to the current Diet session.

The employment insurance system covers those who work at least 20 hours per week, and about 44 million people were enrolled in the program as of the end of fiscal 2022. The main pillar of the proposed revisions is to lower this requirement to 10 hours or more per week.

The aim is to extend the safety net to people who work shorter hours and support their livelihoods in the event of unemployment or other emergencies.

If the revisions are realized, 4.88 million people would be newly enrolled in the program.

Those enrolled in the employment insurance system receive benefits based on their last wages when they become unemployed or take childcare leave. Education and training benefits are also available for people to acquire qualifications to advance their careers.

The financial resources for employment insurance consist of premiums paid by workers and their employers based on workers’ wages, as well as contributions from state coffers. The premium rate is currently 0.6% of wages for workers and 0.95% for companies.

If a part-time worker joined the employment insurance system, they and their employer would face a new financial burden from paying premiums, but there are significant benefits to joining, including coverage in the event of unemployment. The government needs to carefully explain this point and spread understanding.

During the COVID-19 pandemic, employment adjustment subsidies were provided to companies that did not lay off employees but retained them as absent from work. Maintaining employment through measures like this is another important role the employment insurance system plays.

In addition, the proposed revision of the employment insurance system includes measures to support a better balance between work and childcare to combat the declining birth rate.

Currently, the benefit provided by the employment insurance system for those who take childcare leave is 67% of the remuneration before the leave.

Under the proposed revision, the benefit rate will be increased for couples who both take childcare leave immediately after the birth of their child, so their take-home pay will not be reduced. If the wife is a housewife, her husband will be able to maintain his income even if he takes childcare leave.

This is an understandable move to encourage men to take such leave.

Additionally, a new benefit provision system will be established for people who work shorter hours while raising children. To compensate for the loss of wages due to shorter working hours, 10% of wages will be subsidized until the child turns 2 years old.

In Germany and Northern Europe, the expansion of flexible work arrangements for couples raising children is said to have helped increase the birth rate. Effective measures should be adopted in Japan as well.

(From The Yomiuri Shimbun, Feb. 4, 2024)