【Aging, safety net and fiscal crisis in Japan】No.253: The state of part-time employees in the welfare pension system

The pension law was amended on May 29, 2020, and promulgated on June 5. One of the main policies of this revision is to increase the number of people who support pension finances by expanding the range of part-time employees covered by the welfare pension system. Part-time employees are defined as those who work between 20 and 30 hours a week and have a monthly salary of at least JPY 88,000 (US$ 815). Since October 2016, part-timers working in companies with more than 500 employees have been obliged to join the welfare pension system; furthermore, the burden of the pension insurance premium is shared between an employer and its employees (50% each). With this revision, the standard size of employees has been reduced from over 500 to over 50.

Figure 1 shows the distribution of part-time employees who are newly covered by the welfare pension system by industry. Figure 2 shows the percentage of part-time employees to total employees by industry. The industries that will be greatly affected by this revision are wholesale/retail, accommodation/food service, healthcare/welfare, and life-related services/entertainment. These four industries are having difficulties maintaining employment of part-timers, as their profits have deteriorated due to the spread of COVID-19.

Figure 1 Distribution of part-time employees by industry

Source: Ministry of Health, Labor, and Welfare

Figure 2 Percentage of part-time employees to the total employees by industry

Source: Ministry of Health, Labor, and Welfare