Human Resources

September 2002

The government is planning to recommend companies to allow full-time employees with small children to work fewer hours, as part of measures to improve the falling birthrate. Those who take advantage of this system should be allowed to resume to regular employee status after their child-rearing is over. The Ministry of Health, Labor and Welfare intends to test the system at companies in each industrial sector next fiscal year. Based on the results, the ministry will compile guidelines on introducing the system and distribute them to companies. Government measures to more compatible with child-rearing include a plan to guarantee company employees, mostly women, who have taken child-care leave, the same level of public pension benefits. Currently, company workers participating in the employee pension scheme are exempt from paying pension premiums while they are on child-care leave until their child turns 1 year old. As a result, their benefits are lower if they had not taken such leave and paid premiums during the period. Among other steps to improve the trend toward fewer children are calling on companies for providing husbands with at least five days off when their wives give birth, as well as limiting overtime to one hour a day for employees who are raising children. (September 12, the Nihon Keizai Shimbun)

The Labor and Welfare Ministry proposed measures to increase membership of part-time workers in the government-managed pension program for corporate employees as a way to secure a funding source for benefits. The proposals were submitted by the ministry to an advisory council to the labor and welfare minister. After discussing with the council and creating a framework, the proposals will likely be included in pension system reforms for 2004. The government-managed pension program for salaried workers mainly targets full-time workers. Of part-time employees, only those who work 30 hours or more a week can join. Other part-time workers can join the national pension system. Those who are spousal dependents of a salaried worker or civil servant and earn less than 1.3 million Yen a year for part-time work are exempt from paying premiums to the national pension system. With individuals working part-time accounting for about 20% of the overall number of the employed, the Labor and Welfare Ministry plans to revamp the existing system to enable part-time employees who work 20 hours or more a week and earn at least 650,000 Yen a year to join the government-managed pension program for corporate employees. Spousal dependents who work part-time will then be able to join the pension plan by paying insurance premiums that currently total 17.3% of monthly income, with the worker and employer equally sharing the payments. Separately, the ministry proposed measures to encourage the elderly to continue working. Under the current system, those between the ages of 60 and 64 who have income from wages are forced to accept cuts in pension benefits. The higher the wages, the larger the pension benefit cuts. This may discourage this age group from working. In a bid to encourage individuals up to the age of 64 with high wages to continue working full-time, the ministry will offer them the option of delaying the start of benefits until they are 65 years old. In turn, when they begin receiving benefits, they will receive more in exchange for the delayed start. If the number of elderly persons earning high wages increases, premiums paid to the government-managed pension program for corporate employees will rise as well. As for falling birth rates, the ministry plans to unveil policies aimed at supporting child-raising. And in order to address the issue of employees who do not pay premiums to the national pension system, the ministry is bolstering its efforts to collect them. (September 11, the Nihon Keizai Shimbun)