From October 2024, part-timers who work at least 20 hours per week at companies with more than 50 employees (covered by workers’ pension program) will be required to enrolled in social insurance (health insurance, pension program). This article takes up key points about this change.
[1] Applicable companies
The amendment to the law on the pension program enacted in 2020 stipulates that part-timers whose weekly work hours are at least 20 hours must be enrolled in social insurance. This change, implemented in October 2022 targeting companies with more than 100 employees, will also be applied to firms with more than 50 employees in October 2024.
“More than 50 employees” in this case refers to employees enrolled in the workers’ pension program. If a company is an applicable places of business (a company enrolled in social insurance) and the number of employees covered by the pension program is expected to exceed 50 for at least six months during the preceding 12-month period, it will be treated as “specified applicable places of business”
Therefore, firms that had more than 50 employees under the pension program for six months during the period from October 2023 to September 2024 will be considered as “specified applicable places of business” as of October 2024. Please note this rule is not applied according to the number of employees under the pension program as of October 2024.
In the case of incorporated companies, the number of employees enrolled in the pension program under the same corporation number will be counted. As for private offices, the number of insured employees in each applicable office will be checked.
[2] Applicable workers
With the amendment, part-timers become applicable to compulsory insurance coverage, if their scheduled weekly or monthly work hours are less than three-fourths of full-time employees and by satisfying all of the three conditions below.
1. Workers whose scheduled weekly work hours are 20 hours or more
“Scheduled weekly work hours” means work hours in average weeks described in the company’s work rules or employment contract, etc. Since work hours are not always determined on a weekly basis, the number can be calculated based on monthly work hours, dividing monthly work hours by 12/52 (number of months / weeks in a year).
2. Workers paid at least 88,000 yen per month
This means workers whose basic wages including salary and allowances are at least 88,000 yen. In the case of workers paid hourly wages, their wages are converted to monthly wages. The following items are not included in basic wages;
One-time allowances, allowances paid for a period exceeding one month, e.g. marriage allowances or bonuses.
Extra wages paid for overtime, holiday work and late-night work
Allowances excluded from the calculation of minimum wages, e.g. perfect attendance / diligence awards, commutation allowances, family allowances.
3. Workers who are not students
Workers attending universities, high schools, special technical schools or other technical schools (with courses no less than one year) are excluded from insurance enrollment. However, following workers are applicable.
Workers who have obtained a graduation letter and have been employed before graduating and are expected to be employed continuously after graduation.
Workers on a leave of absence from school
Workers attending part-time classes, such as evening courses of universities or high schools
[3] Measures to be taken by companies
Companies likely to become “specified applicable places of business” should check part-time workers applicable to compulsory insurance coverage. Since they will have to start paying insurance premiums, some part-timers might reduce work hours or change their working conditions to be exempted from insurance enrollment. There may also be workers who prefer to adjust their wages to ensure their payment will not decrease after deduction of insurance premiums.
Some companies will find it difficult to deal with the requests of individual part-timers, but it is crucial to avoid a personnel shortage caused by work hour adjustment since it might affect company operations.
[4] Career development subsidy
The Labor Ministry has established a new course in the existing career development subsidy program to support workers who will be newly enrolled on insurance programs. Starting October 1, 2023, companies who have part-time workers newly enrolled in insurance programs receive a subsidy of maximum 500,000 yen per worker.
To receive subsidies, companies need to satisfy certain requirements and submit a “career development plan.” If your company is considering applying for a subsidy, please make preparations in advance.
The Labor Ministry has a special website for part-timers’ insurance enrollment, providing pamphlets and videos for companies or workers who will be enrolled in insurance. Please check the links below.
[Reference]
Japan Pension Service, “Expansion of compulsory coverage of health insurance and pension programs for short-time workers”
https://www.nenkin.go.jp/service/kounen/tekiyo/jigyosho/tanjikan.html
https://www.nenkin.go.jp/oshirase/topics/2021/0219.html
Labor Ministry, “Special website for the expansion of compulsory coverage”
https://www.mhlw.go.jp/tekiyoukakudai/
*The content is based on laws and regulations as of the date of this article.
