The Japan Times has a good summary of the issues surrounding the changes to the visa renewal process starting in April 2010. I blogged about this a while back, but the Japan Times column covers some of the implications of having to enroll in an insurance scheme in order for foreigners to renew their work visas.
Louis Carlet, deputy secretary of Nambu, laid it down for everyone in the room to understand. There are a few basic things that all foreigners in Japan have to know, he explained: first, that everyone over the age of 20 in Japan is required to enroll in an approved Japanese government health insurance scheme and pension fund. If you are under 75 and working at a company that employs more than five people, this most likely means the shakai hoken (social insurance) program; if you are unemployed, self-employed or retired, the equivalent system is the kokumin kenko hoken and kokumin nenkin (national health insurance and pension). The only people exempt are sailors, day laborers, and those working for companies employing less than five people, or for firms without a permanent address (e.g. a film set).
The two systems cover different ground, all of which is explained in detail at www.sia.go.jp/e/ehi.html. Roughly, shakai hoken consists of two parts: kenko hoken (health insurance), which covers 70 percent of your medical costs and 60 percent of lost wages due to illness, and kosei nenkin (pension insurance), which provides a pension after age 65 for those who have paid into the system. The two are inseparable, and anyone enrolled in shakai hoken through their employer automatically pays into both. The kokumin kenko hoken (national health insurance) and kokumin nenkin (national pension) package offers similar coverage but is not provided through an employer.
The bottom line is that all residents of Japan (except those mentioned above) have to be enrolled in one or other of the two systems. The revised visa laws, therefore, should pose no threat to anyone's visa renewal, because every foreigner in Japan should already be enrolled.
It has long been standard practice within eikaiwa to skirt enrollment of instructors by limiting the working hours in contracts. For example, the contracts Chris and I signed back in the day stated that we agreed to teach up to 28 hours of classes a week. The 28 hours is important because the law stipulates that companies must enroll employees in shakai hoken if the employees work 30 or more hours a week.
In 2005, NOVA brazenly changed working conditions by shortening lessons to 40 minutes and adding 2 minutes of "planning" on either side of each lesson. The net result was more unpaid free tie between classes and instructors working fewer than 30 hours per week. It was a move that supposedly saved NOVA at least ¥1 billion a year in insurance contribution payments.
Enrollment in social insurance is not without its drawbacks. Many would question the wisdom of having approximately ¥30,000 deducted from their paychecks every month, especially if they know they won't be living in Japan long enough to collect a pension. Moreover, if you've never paid into shakai hoken, you may wind up paying up to 2 years in back contributions.
That said, the benefits outweigh any initial pain. For one, you will be enrolled into a health and pension plan you are legally entitled to, and you'll avoid looking foolish like the people at the beginning of the article who didn’t know anything about social insurance in Japan or were dissuaded from joining it.
There is also recognition. Recognition that you are a full-fledged employee entitled to the same benefits as other Japanese workers. This could translate into better working conditions and improved job security. Most importantly, you are covered. No more worries about hospital visits and fewer worries about pension contributions. As the article points out, pension contributes can be refunded, but the maximum amount tops out at 3 year’s worth of contributions.
That doesn’t mean all is lost for long term residents, however. You need to check with your government and find out if it has a pension agreement with Japan. For example, Canada and the UK have them, meaning that contributions paid in Japan count toward your pension back home.
This is a positive development for workers, but it does make you wonder what took so long for this to become a reality.