Amendments in the Employment Insurance Act in 2016, entitled workers aged 65 or over to employment insurance as of January 1, 2017. In April 2020, another change, concerning the exemption of employment insurance payment, takes effect.
1. Calculation of employment insurance premiums
As a rule, employment insurance premiums are paid both by the company and insured employees. The amount to be paid by an employee is calculated by multiplying his/her salary by the rate, designated according to the company’s type of business. The premium is deducted from the employee’s monthly salary.
However, workers who are 64 or older as of the first date of the fiscal year (April 1) are exempt from the insurance payment. The company is also exempted from the payment for the concerned employee, either.
2. Abolishment of premium payment exemption
With the law amendments in 2016, the coverage of the employment insurance was extended, while the clause regarding insurance payment exemption was abolished. Premiums will be collected by all the employees covered by employment insurance, starting April 1, 2020. The method of calculation for employees aged 64 or older as of the date is the same as other employees.
When calculating payroll for April 2020, please ensure that premiums will be deducted from all the employees, including those who had been exempted from the payment before. Please also be sure to submit applications of employment insurance entitlement for employees aged 65 or older.
