Revised Employment Insurance Law is enacted

We previously reported, in JLF Vol. 33's Special Issue, that discussions were under way last December to implement, in June, reductions in employment insurance benefits and to raise premiums. In the article, we stated that there were differences in views among the government, labor and management, and that coordinating them was expected to be difficult. However, a bill to amend the Employment Insurance Law was passed by the Diet on April 25.

As a result of this revision, it was decided that employment insurance premium rates (to be split between labor and management) would remain at 1.4% for two years, then be raised to 1.6% in FY2005. However, if problems arise with respect to the payment of unemployment benefits up to the end of March 2005, it was decided that the rate could be either raised or lowered by 0.2% in a flexible manner.

In terms of benefits, to encourage early reemployment, the revised law will lower the benefit rates of unemployment allowances and reduce the maximum benefits offered. As a result, the minimum benefit rate will be reduced from the existing 60% of the wages at the point when a worker leaves his or her job to 50% (the minimum rate will be lowered even further from 50% to 45% for workers between the ages of 60 and 64). The maximum daily benefit values would be reduced by 24% to 6,580 yen for workers under the age of 30; 7,310 yen between the ages of 30 and 44; and 8,040 yen between the ages of 45 and 59. The maximum daily benefit for workers aged 60 to 64 would be 7,011 yen, or a reduction of 27%.

Meanwhile, we have already reported (in JLF Vol. 24's Special Issue) that the premium rates were raised in April 2001 from 0.8% to 1.2% (an increase of 0.4%), then further raised by 0.2% in February 2002 to 1.4%.

The revised law also seeks to cater to diversified styles of work by unifying the number of benefit days provided to regular and part-time employees, and establishing allowances to promote employment. These allowances are paid to individuals who have rapidly found another job, leaving more than one-third their benefit days, either as part-time, temporary, or contract employees. In addition to their wages, they are paid 30% of the basic daily allowance.

The revised law was enforced on May 1, only one week after it was passed: an extraordinarily short period.

Rengo stated, "It is extremely regrettable that, despite the opposition parties pointing out numerous contradiction and problems in the government bill, the ruling party refused to revise the original draft in any way. We will continue to rigorously check the government's employment policies as a whole."

Zenroren also sharply criticized the revised law, saying that it "shifts most of the burden onto workers and jobless people."

Now that a revised Employment Insurance Law has been established after its related bill was passed, along with a 12-item supplementary resolution, we are left with the impression that it was bulldozed through without the government, labor and management ever succeeding in coordinating views among themselves, or in setting up any labor-management agreements.