Japan to raise premium for employment insurance
Japan is planning to raise premiums for employment insurance in fiscal 2022, starting next April.
The government has decided to ask for greater premium payments from employers and employees as the employment insurance system is running low on funds, due to a surge in employment adjustment subsidy payments to companies partially covering leave allowances they pay to furloughed workers.
A proposal has been made within the government to raise the premium rate to 0.5% for employees and 0.85% for employers, according to sources, reports The Japan Times.
The premium rate in fiscal 2021 is currently set at 0.3% of overall wages for employees and 0.6% for employers. These rates were in fact reduced from the original levels of 0.6% for employees and 0.95% for employers as the system had sufficient funds then.
The employment insurance is funded mostly by premiums paid by employers and employees, and contributions from the government’s general account.
The finance ministry is currently looking at utilising a temporary arrangement that allows the employment insurance to use fund transfers from its general account in times of emergency.