Japan rolls out plans to expand workers' comp to freelancers

The country currently has almost 5 million freelancers, with more than half on a commission basis

Japan rolls out plans to expand workers' comp to freelancers

Insurance News

By Kenneth Araullo

The Japanese Labor Ministry is set to broaden the eligibility criteria for workers' accident compensation insurance, extending it to cover freelancers across all industries.

This plan was discussed in a recent meeting by a subcommittee of the Labor Policy Council, which provides advice to the labour minister.

A report from The Japan Times revealed that this initiative is targeted for implementation by autumn of next year and aims to provide freelancers with greater job security amidst the increasing diversity of working styles. Workers' accident compensation insurance is a national scheme that currently allows corporate employees to receive benefits for accidents occurring during work or commutes. The premiums for this insurance are paid by the employers.

Under the current system, small business owners and freelancers in specific industries can join the program by paying premiums themselves. The proposed revision intends to expand this eligibility to include all freelancers who are contracted by corporations.

A government survey revealed that Japan has approximately 4.62 million freelancers, with an estimated 2.73 million working on a commission basis for companies. Until now, the inclusion of freelancers in the special system has been incremental and industry specific. For instance, workers in animation production, bicycle delivery, and information technology were added in 2021, and dental technicians were included in the subsequent year.

This move follows the enactment of a new law in April, aimed at ensuring fair business practices between freelancers and corporations. An accompanying supplementary resolution called for the expansion of the special system to encompass all freelancers engaged in commissioned work for companies. This has prompted the ministry to deliberate on the necessary adjustments to respond to this resolution.

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