Social and Labor Insurance in Japan: Who Employers Must Enroll (2026)

A corporation is a covered workplace for health insurance and Employees’ Pension Insurance (together, social insurance) even if its only member is a president who receives directors’ remuneration. Once it hires even one worker, it generally also needs to complete the procedures for workers’ accident compensation insurance and employment insurance (labor insurance). Enrollment is the company’s obligation, and procedures cannot be skipped because an individual does not wish to join.

Social insurance vs labor insurance

“Social insurance” (社会保険) generally refers to health insurance and Employees’ Pension Insurance, and “labor insurance” (労働保険) to workers’ accident compensation insurance and employment insurance. Each scheme has its own coverage and its own office.

Health insurance and Employees’ Pension Insurance premiums are, in principle, split equally between the company and the employee. Workers’ accident compensation insurance premiums are paid entirely by the company. Insured persons aged 40 or over also pay long-term care insurance premiums.

Enrollment criteria for social insurance (health insurance and Employees’ Pension Insurance)

Workplaces subject to mandatory coverage

• Corporate workplaces: mandatory coverage if there is at least one insured person, including where the business consists of the owner alone, regardless of industry or headcount
• Sole-proprietor workplaces: where five or more employees are regularly employed (excluding certain industries)

Workplaces not subject to mandatory coverage can still join by applying with the consent of at least half of their employees and obtaining approval (voluntary coverage).

Who is enrolled (insured persons)

Anyone regularly employed at a covered workplace is an insured person, regardless of nationality. This includes officers who receive remuneration. Part-time and casual staff are enrolled if their scheduled weekly hours and scheduled monthly working days are at least three-quarters of those of regular workers at the same workplace.

Even on a contract of two months or less, a worker is enrolled from the outset if they are expected to be employed beyond that period.

When an employee does not want to join

A corporation that employs staff meeting the enrollment criteria is always a covered workplace and must complete the enrollment procedures. Even if an employee declines because their take-home pay would fall, the company cannot treat them as not enrolled. If the failure to enroll is discovered later, premiums must be paid retroactively, creating a burden for both the company and the employee.

Short-time workers below the three-quarters threshold

Workers below the three-quarters threshold are still enrolled if they meet all of the following:

• Scheduled working hours of 20 or more a week
• Not a student
• Employed at a specified covered workplace (特定適用事業所; currently, for example, a company with 51 or more Employees’ Pension Insurance insured persons)

The former wage test, which required scheduled wages of JPY 88,000 or more a month, was abolished on October 1, 2026. Working-hour arrangements designed around the so-called “JPY 1.06 million barrier” need to be reviewed. There are exceptions, such as for workers earning under JPY 88,000 a month under an approved minimum-wage reduction exception.

The company-size test will be phased out

Under the 2025 pension reform act, the company-size test for short-time workers will be reduced and abolished in stages as follows.

Even small companies will increasingly need to enroll short-time workers. Build this into hiring plans and payroll forecasts early.

A “premium adjustment scheme” has also been introduced to reduce, for a set period, the premium burden on short-time workers newly brought into coverage. It applies to workplaces that, on or after October 1, 2026, bring short-time workers into coverage by labor-management agreement (voluntary specified covered workplaces), and to workplaces newly covered under the future expansions. For workers whose standard monthly remuneration is at or below a set amount, the employer temporarily bears part of the employee’s premium, which is later deducted from the employer’s payment. Check the Japan Pension Service guidance for eligible workers, periods and other conditions.

Enrollment criteria for labor insurance (workers’ accident compensation and employment insurance)

Workers’ accident compensation insurance

A business that employs even one worker is, in principle, covered by workers’ accident compensation insurance. All workers are covered, including part-time, casual and foreign staff, and there is no enrollment procedure for each worker. Officers are generally not workers and are therefore not covered.

A company made up only of its president or officers needs social insurance procedures but usually no labor insurance procedures. Labor insurance procedures begin when the first employee is hired.

Employment insurance

Workers who meet both of the following conditions are, in principle, insured under employment insurance:

• Scheduled working hours of 20 or more a week
• Expected to be employed for 31 days or more

From October 1, 2028, the weekly hours threshold will be lowered to “10 hours or more”. Companies with many part-time staff working 10 to 19 hours a week can expect more workers to be covered.

Enrollment procedures and deadlines

The following filings are made when the company is set up and when employees are hired. Because the deadlines are short, start preparing as soon as a start date is fixed.

The new coverage notification is submitted together with the notifications of acquisition of insured status. Filings with the pension office can be made online, by post or in person. Corporations must attach documents such as a certified copy of the corporate (commercial) register; check the Japan Pension Service guidance for the conditions on attachments. If a missed filing comes to light later, the company must enroll retroactively and pay past premiums. Put a system in place to check all filings together at incorporation and at each hire.

For a full list including tax office filings, see filings and deadlines after incorporation.

Social insurance for foreign employees and social security agreements

Foreign employees who meet the criteria join social insurance and labor insurance in the same way as Japanese employees. For hiring on a work visa, see hiring foreign employees and work visas.

Avoiding double coverage under social security agreements

Japan has concluded social security agreements with a number of countries. Employees temporarily seconded from a company in a partner country may be exempt from enrolling in the Japanese scheme by submitting a certificate of coverage from that country. Conditions include that the secondment is generally expected not to exceed five years, and the detailed requirements differ from agreement to agreement.

The agreement with China took effect on September 1, 2019. It covers only Japan’s public pension schemes and China’s basic old-age insurance for employees, and periods of coverage cannot be totalized. An employee seconded from China who meets the requirements is exempt from Employees’ Pension Insurance but still joins health insurance.

Employees not covered by an agreement generally join the Japanese schemes. A foreign national who has been enrolled in Employees’ Pension Insurance may be able to claim a lump-sum withdrawal payment on returning home.

These enrollment procedures also apply when hiring the full-time staff required under the new Business Manager visa standards. For the details of those standards, see the revised Business Manager visa criteria.

How TIMOA can help

Social insurance and labor insurance procedures arise at incorporation and with every hire. With the wage test abolished in October 2026 and the company-size test set to shrink, the range of people who must be enrolled is widening. It is essential to identify correctly who must be covered in your company and to file on time.

Working with partner labor and social security attorneys (社会保険労務士), TIMOA supports everything from new coverage procedures and hiring filings to checking social security agreements for foreign employees. For details, see Accounting, Tax & HR.