The Complete Guide to Offering Employee Benefits in Japan: Part 2

female Japanese employee talking on the phone

By Ashutosh Agarwal, Manager, Global Benefits, GoGlobal

Navigating global hiring and business expansion can feel like a high-stakes game of chess, where every move counts. For example, a recent report by Riskybrand Inc. highlights the importance of understanding local expectations for remote work in Japan. Given the country’s fierce competition for talent, employee benefits play a pivotal role in the recruitment process.

In our previous blog post, we looked at the statutory benefits employers in Japan are required to provide. In this blog post, we identify some of the most popular supplemental benefits provided by international companies in Japan. We also explore how hiring through an Employer of Record (EOR) can support benefits administration and talent management.

Supplemental benefits in Japan

In addition to mandatory benefits, many Japanese employers provide additional benefit plans and perks to attract and retain employees.

Some of the most common supplementary benefits in Japan include:

Sick Pay and Other Paid Leave Options

While not mandatory, many employers offer paid leave such as sick leave, bereavement leave, disability leave, marriage leave, extra parental leave, paid personal days and flexible leave policies. These options provide employees with the flexibility and security to manage personal and family-related matters without financial strain.

Private Health Insurance

Japan’s national health insurance system covers basic medical needs. However, some employers offer supplemental insurance benefits with more robust coverage to compete for top talent. These private health insurance plans often include enhanced medical services, quicker access to specialists and additional wellness programs.

Group Life Insurance

Group life insurance plans provide lump-sum payments to family members in case of death due to accidents, medical complications, natural causes, terminal illnesses or acts of violence. This benefit promotes financial security for employees’ families during difficult times and demonstrates the employer’s commitment to employee welfare.

Family Allowance

Many companies provide allowances to employees with dependents. For example, spouses may receive ¥10,000 to ¥15,000 per month while children receive ¥3,000 to ¥5,000. This benefit helps alleviate the financial burden on employees with families, making the workplace more family-friendly and supportive.

Long-Term Disability Insurance

Additional long-term disability insurance can provide financial assistance for employees unable to work due to prolonged illness or injury. This insurance ensures that employees are protected and financially secure, even if they face long-term health challenges.

Additional Perks

International employers may offer transportation stipends, flexible work arrangements, subsidized food services, housing allowances and stress checks. The latter is required for employers with more than 50 workers. These perks can significantly enhance the overall employee experience, making the workplace more attractive and accommodating.

How an Employer of Record (EOR) solution supports benefits

For international companies operating in Japan, managing employee benefits can be complex and challenging.

An EOR solution can simplify the process of managing employee benefits, providing a distinct competitive advantage in the talent market. This hiring method is useful for administrating both statutory and supplemental benefits. Here’s why:

Compliance Management

An EOR partner can handle all compliance-related tasks, helping a business adhere to Japanese labor laws and regulations. The EOR’s internal team stays updated on the latest legal requirements, minimizing the risk of non-compliance and potential penalties.

Global Payroll Processing

Experienced teams manage payroll processing, including the calculation and payment of salaries, taxes, benefits and social security contributions. With EOR services, international businesses can enjoy accurate and timely payroll processing. This allows you to focus on core business activities such as business development and customer relations.

Benefits Administration

EOR companies administer both statutory and supplemental benefits, providing a seamless experience for employees. From managing private health insurance plans to distributing meal and transportation allowances, they handle all aspects of benefits administration. Through EOR hiring, an international workforce can receive the localized, tailored support they need.

Contract Management

An EOR partner can take care of employment contract management, aligning terms with local legal requirements. A properly written contract will also clarify the agreed-upon terms between employers and employees. A meticulous and localized approach to contract management establishes clear expectations, maintaining positive employer-employee relationships.

Local Expertise

Local experts provided by an EOR partner offer valuable insights into the Japanese labor market. This includes an in-depth understanding of local customs, regulations and industry practices. The EOR team can design a competitive benefits package that meets the needs and expectations of the Japanese workforce.

Global benefits: an invaluable business investment

Global employee benefits are a critical tool for companies looking to attract and retain top talent in Japan and beyond. By offering a comprehensive and competitive benefits package, employers can create a supportive and appealing work environment.

Partnering with an EOR solution can further streamline the process, ensuring compliance and providing valuable local expertise. In the competitive Japanese job market, investing in global benefits is not just a perk but rather a necessity for sustainable business success.

Learn more about regulations and hiring in Japan here: Hire in Japan | GoGlobal

Contact us today to discover how the GoGlobal Global Benefits Team can help you design benefits that fuel business expansion and hiring in Japan.

The content provided in this publication is for general information purposes only and should not be considered legal advice. Due to potential changes in regulations, the information may become outdated. GoGlobal and its affiliates disclaim any responsibility for actions taken or not taken based on the information contained in this publication.