The Japanese Employment System and Contract Types

When job-hunting in Japan it pays off to understand the Japanese employment system. Insurance coverage, benefits, and more, all vary based on which type of employment contract you get. On top of that, whether you are eligible for a working visa in the first place also depends on your contract, so make sure to read the small print!

Employment System

The employment system in Japan after the war has been built around lifetime employment as well as a wage and bonus system rewarding those that work at a company for a long time. But not all workers in Japan can benefit from this system. Everyday conversations often talk about employment in terms of full-time and part-time. But Japanese law draws the lines a little differently, distinguishing two main types of employment: regular employment (正規雇用, せいきこよう) and non-regular employment (非正規雇用, ひせいきこよう).

The first group is made up of regular full-time employees, while the second group encompasses contract employees, temporary staff, and part-time workers. Non-regular employees have only limited access to insurance and benefits, so look out for terms like 正社員 (せいしゃいん) or 契約社員 (けいやくしゃいん) in the job offer.

Regular Employment

Regular Employee

The one and only regular employment type is called 正社員 (せいしゃいん) or 正規社員 (せいきしゃいん) in Japanese. Everyone is working full-time and with unlimited contracts.

Whether you are a new grad, your average salaryman, or the CEO, this category doesn’t distinguish any further. It’s the holy grail of lifetime employment and most full-time workers want to get one.

Benefits of regular employment, aside from job security, include higher salaries, higher salaries, opportunities for promotion, insurance coverage (social, employment, etc.), allowances, bonuses, and various benefits like maternity leave, etc.

The regular employee status is often necessary for foreigners who want to work in Japan long-term and the safest route to take. The immigration bureau couldn’t ask for anything better to prove someone has a stable and secure source of income to support their life in Japan.

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Non-Regular Employment

Non-regular employment covers all work contracts where the placement is limited to a fixed period of time as well as part-time positions. Contract employees, temp staff, and part-time workers all fall under this category.

Contract employee

A contract employees or 契約社員 (けいやくしゃいん) is typically hired for short periods of 3, 6, or 12 months. Except for unusual circumstances, neither the company nor the employee has the right to break the contract before the agreed upon time is over.

Just as regular employees, contract employees are usually enrolled in the insurance packages and often work full-time. With a good performance record, it is even possible to be promoted from contract to regular employee.

Contract employees are paid based on a monthly or daily wage system, with salary levels typically lower than those of regular employees. Transportation expenses are covered by the company, but contract employees do not receive other benefits or pension that regular employee get. Bonus payments are uncommon, and small if they are paid at all.

Temporary Staff

Temporary staff, 派遣社員 (はけんしゃいん) in Japanese, is unique in that they are not employed by the company they work at. Instead, they have a contract with a dispatching company who assigns them a job at another company.

Temporary staff can work at one place for a maximum of three years. Once the contract at one company is over, the dispatching company will usually introduce the next job.

Salary is typically paid on an hourly wage system. On top of the salary, temp staff usually receives money for transportation costs. Other allowances are possible but depend on the dispatch company. Regulations regarding paid vacation days and whether you can get employment insurance also vary by company.

Without much room for career advancement and easily laid off when the company hits a rough spot, many Japanese temp workers are looking for more stable employment, but the economic situation (regular employment decreased 8% over the past 15 years) and the rigid job market, make it difficult to find opportunities for a job change.

Part-time

Most of us are familiar with part-time work from our student days: working a few hours a day, a few days a week in a shift system.

In Japan this type of employment is either called パート or アルバイト. There is no difference between them in a legal sense, but Japanese people tend to use パート for housewives and アルバイト for students or other people who have another “main job” they attend to (sorry moms). But really it’s all the same.

Part-time workers are paid daily or hourly wages. While you cannot expect much in terms of benefits, transportation costs are mostly covered, and you do have the right to take paid leave.

Since it is hard to fire regular employees, some companies actually hire people into office jobs under part-time as a test phase. If everything goes well they will be promoted to regular employees. If you are looking to increase your income working part-time, consider picking up night shifts from 10pm or go into teaching or other areas with above average pay.

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These are the four employment contract types in Japan. Except for those who stay under a family-related visa, part-time and regular employment contracts are what you will be looking for. In either case, know your rights, it will save you trouble and confusion later on!

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