Minimum wage will be raised by 31 yen from October 2022

A subcommittee of the Central Minimum Wage Council (an advisory body to the Minister of Health, Labor and Welfare) met in Tokyo on the afternoon of August 1 to discuss the minimum wage increase for FY2022. The committee summarized the guideline, which is 961 yen per hour as the national average. This is an increase of 31 yen from the current average and the largest increase since the current system was adopted in FY2002. Against the backdrop of soaring prices, the rate of increase is 3.3%. The new amount will take effect in October.

The standard increase was divided into four ranks, A to D, depending on the economic situation of the region. Six prefectures including Tokyo in A increased by 31 yen, 11 prefectures including Kyoto in B increased by 31 yen, 14 prefectures including Fukuoka in C increased by 30 yen, and 16 prefectures including Tottori in D increased by 30 yen.

As a result, the minimum wage in Tokyo will be 1,072 yen starting this October.

The minimum wage is the lower limit of wages applicable to all workers. The minimum wage is based on the Minimum Wage Law, and companies that pay less than the minimum wage are subject to fines. Currently, the national average is 930 yen, and in recent years, with the exception of FY2020, the increase has been about 3% over the previous year. The increase in FY2021 was 28 yen, and in FY2022, in light of the sharp rise in prices following Russia's invasion of Ukraine and other factors, adjustments continued among representatives of labor and management, as well as experts, for an increase even higher than this.

The minimum wage is revised every fiscal year, taking into account the cost of living and wages in each worker's region and the ability of companies to pay.

Revision of the Ministry of Health, Labour and Welfare's "Q&A on the Payment of Injury and Sickness Allowance for New-type Coronavirus Infections".

◆The "Q&A on the Payment of Injury and Sickness Allowance for New Coronavirus Infections" has been revised. 

For example,

Q: If an insured person is unable to work due to the aftereffects of a new type of coronavirus infection contracted for reasons other than work-related injury, will he/she be entitled to receive sickness benefits?

A: May be eligible for injury and illness benefits.

Q: Is it necessary to attach a "certificate of accommodation and home treatment" issued by a public health center, etc. when applying for an injury and illness allowance?

A: With regard to "accommodation and home treatment certificates," it is not appropriate to uniformly request such a certificate from insurers (the entities operating the health insurance business), as they are taking measures such as simplifying the administrative burden on medical professionals and public health centers.

If the insured did not visit a medical institution for unavoidable reasons and cannot attach a doctor's opinion, the insurer will pay the injury and illness allowance if the insured is deemed unable to work due to medical treatment by stating so in the application form and attaching a document from the employer certifying that the insured was not engaged in labor for medical treatment during the relevant period.

Q: If a "certificate of accommodation and home treatment" is submitted as a document related to an application for the provision of injury and illness benefits, can this be treated as a doctor's opinion?

A: A "certificate of accommodation and home treatment" certified by a physician, etc. who conducted the medical treatment, not by a person in charge at a local government or health center, etc., may be handled as a physician's opinion letter.

Q: If I contracted a new type of coronavirus infection overseas and cannot attach a physician's opinion, what should I use to determine the period of inability to work?

A: In cases where the insured person did not visit a medical institution for unavoidable reasons and cannot attach a doctor's opinion, the insurer will pay the injury or illness allowance if the insured person is recognized as being unable to work by stating so in the application form and attaching a document from the employer certifying that the insured person did not work for medical treatment during the relevant period.

About reference checks

 

1. What was the period of time you worked together with the applicant, and what position did he/she hold?

2. What were the main duties and responsibilities carried out by him/her?

3. How would you assess his/her performance in the job?

4. How would you describe his/her attitude to work?

5. What are some of his/her major project achievements?

6. How would you describe his/her organizational skills? How does he/she work under pressure/handle stress?

7. Given the opportunity, would you like to re-hire him/her?

◆What is Reference Checking?

　Reference checking is a part of the hiring process in which the hiring company verifies the authenticity of a candidate's background. The reference checks are conducted with the candidate's current or former supervisors to verify the candidate's background and accomplishments as indicated by the candidate during the selection process. This reduces the risk of mismatches after the hiring process.

In Japan, an increasing number of companies are introducing this system in mid-career hiring situations, where the impact of mismatches is significant. The method differs from company to company, but in many cases, with the consent of the job seeker himself/herself, the company will ask for references, and the company confirms the references directly by phone or in writing.

◆Difficult to detect a mismatch only by interviewing

　According to the "Survey of Awareness and Actual Conditions Concerning Reference Checking (HR Managers)", conducted among businesspersons nationwide who belong to human resources departments, 78.3% of respondents answered "difficult" when asked if they think it is difficult to identify talented people who will play an active role during their company's hiring interviews. Reference checks can complement these difficulties. According to the survey, 75.5% of companies that have introduced reference checks have "realized" a reduction in mismatches in hiring.

◆Gauging the advantages and disadvantages of implementation

　On the other hand, some say that reference checks are time-consuming and costly, and that they cannot guarantee the authenticity of the references' answers. It is necessary to weigh the advantages and disadvantages of reference checks and make a comprehensive decision on whether to conduct reference checks. One approach is to start with cases where the impact of mismatches is particularly large, such as hiring for managerial positions or for immediate employment. For example, "I hired someone, but they were not the right person for the job. We want to prevent mismatches for sure next time.” Companies that have this in mind may want to consider introducing this system.

Record 629 cases of mental illness at work in FY2021, the third consecutive year of increase

 

  According to the workers' compensation situation in FY2021 announced by the Ministry of Health, Labor and Welfare on June 24, there were 629 cases of depression and other mental disorders caused by strong stress from work.

  This was an increase of 21 cases from the previous fiscal year and a record number for the third consecutive year. The most common cause was "power harassment by superiors" (125 cases).

  Other than power harassment, the common causes were "change in work content/volume" (71 cases) and "experiencing or witnessing an accident or disaster" (66 cases). Looking at the number of certifications by age group, those in their 40s accounted for the largest number of 200 cases.

  The number of cases certified in relation to new coronavirus infection rose to 18. The number of suicides and attempted suicides decreased by 2 cases to 79. The number of applications for workers' compensation for mental disorders also increased by 295 cases to a record high of 2,346 cases.

The 3-day weekend system

◆Government is also pushing for the introduction of a 3-day workweek

A three-day workweek system with three days off per week. Creating an environment in which employees can work comfortably, such as by preventing employees from leaving the company due to childcare or nursing care needs or by allowing time for self-development (skill improvement), will also increase the attractiveness of the company when hiring. Major companies such as IBM Japan, Yahoo Japan, Mizuho Financial Group, and Uniqlo have introduced this system.

In the "Basic Policies for Economic and Fiscal Management and Reform 2021", the government also stated, "With regard to the selective three-day workweek system, we will promote the introduction and spread of the system in companies by collecting and providing good examples, since it can be used for childcare, nursing care, volunteer work, and dual employment in rural areas.”

◆How to operate

There are three main patterns of operation: (1) income decreases as the number of work days decreases, (2) hours worked on work days increase and income remains the same, or (3) hours worked on work days remain the same and income remains the same. Many companies seem to adopt (1).

◆Is keeping the level of income a key to retention?

According to a survey by the job-transfer information site "Mynavi Jobchange," approximately 60% of respondents answered that a three-day workweek was "not possible" because of the "workload" and "labor shortage" reasons. In addition, nearly 80% of respondents "do not want to use" the 3-day workweek if their income would decrease in proportion to one less day of work. By age group, respondents in their 20s "want to use" the system even if their income is reduced (slightly less than 30%), higher than other age groups, indicating a tendency for a higher percentage of respondents to prioritize holidays over income.

As for measures to introduce a three-day workweek, responses such as "improving operational efficiency," "changing the mindset of upper management," and "increasing manpower" were raised, and it appears that the key points are to improve productivity and reduce manpower shortages.

Why do new hires quit? From "the Survey on Pre- and Post-Hire Troubles 2022."

◆May is a time when new employees leave the company.

May is a time when an increasing number of people experience symptoms of feeling unwell, known as "May illness" after the Golden Week holiday, and we also see the resignation of newly hired employees.

It is also a time when new employees, who have been feeling tense as they dive into a new environment, lose their tension and begin to feel dissatisfied with the company.

◆The reality of "30% job turnover within 3 years.”

According to the "Survey on Pre- and Post-Employment Troubles 2022" conducted by the Japan Trade Union Confederation (targeting 1,000 men and women in their second to fifth year of employment nationwide who had graduated from college and started working as full-time employees), 7.7% had "left" the company they joined after graduation (within six months). 6.2% of the respondents "left their jobs (within 1 year after 6 months)," 10.4% "left their jobs (within 2 years after 1 year)," 5.2% "left their jobs (within 3 years after 2 years)," and 3.7% "left their jobs (after 3 years)," indicating that the often- mentioned "30% of workers left their jobs within 3 years" is also true here.

◆Why did the new employee quit?

When asked why they quit their companies in this survey, the most common reason given was that "the job did not suit me" (40.1%). This was followed by "Working hours, holidays, and vacation conditions were not good" (31.0%) and "Wage conditions were not good" (27.4%), indicating that a greater percentage of respondents cited a mismatch in work than in compensation. The percentage of "Left job (total)" was 41.9% for those who did not receive new employee training or guidance/advice from senior/supervisor, 11.0 percentage points higher than those who did receive guidance/advice (30.9%), indicating that there is a large difference depending on the support provided by the surroundings.

The employers want to avoid employee turnover after hard work and effort in hiring. Workplaces with new employees will need to be considerate of those around them.

Full-Scale Discussion on Monetary Settlement of Termination of Employment - MHLW Study Group Report

On April 11, an expert panel of the Ministry of Health, Labor, and Welfare (MHLW) held a meeting to discuss a system whereby companies would pay money to workers who have been wrongfully dismissed, rather than returning to work. The committee compiled a report outlining legal issues, and the Labor Policy Council, whose members are representatives of labor and management, is expected to hold a full-fledged discussion on the pros and cons of the introduction of the system. The report envisions a system whereby workers whose dismissals are invalidated by lawsuits or labor tribunals would receive money from the company to end their labor contracts if they so desire.

Discussions on a monetary settlement system for layoffs began after the government included it in its growth strategy in 2015. While the government and the business community have been active in introducing the system, labor unions and others have opposed it, claiming that it will be misused for restructuring, and discussions at the Labor Policy Council are expected to be difficult.

The report defined the system as covering workers whose dismissals notified by their employers were found to be invalid for lack of reasonable cause. The motion for monetary settlement was limited to workers. The proposal was not included in the discussion because there are issues that are not easy to solve under the current circumstances, such as allowing a company to dismiss a worker again.

The amount of salary, years of service and age are presented as requirements for consideration in the calculation of the "labor contract termination payment" to be paid to workers. Setting a maximum or minimum amount to increase predictability should be discussed in the future.

There are already mechanisms, such as lawsuit settlement procedures and labor tribunal conciliation, whereby a worker who considers his or her dismissal unfair but does not wish to return to work can receive a monetary payment from the company to end the labor contract. However, the government has been pushing for the introduction of a new system, saying that it would give workers more options.

In May 2017, another expert panel of the Ministry of Health, Labor and Welfare (MHLW) compiled a report stating that "a certain degree of necessity is recognized," but later, at a subcommittee of the Labor Policy Council, members of the labor side of the introduction of the system were opposed, saying that there were concerns that it would be used as a means of restructuring or lead to more options for dismissal.

The MHLW established a study group of legal scholars in 2018 to further clarify legal issues, and discussions were ongoing. (Kyodo News)