It turns out that the major eikaiwa schools have been breaking the law for well over a decade. The eikaiwa gray train is about to come to an end. For over a decade, NOVA, GEOS, and AEON have not been enrolling their instructors into shakai hoken, Japan's health insurance and pension plans, plans which they are obligated to enroll you in by law.
After the General Union forced the issue with the Social Insurance Agency, the agency recently concluded that it will make all eikaiwas pay into the system. Should the General Union be congratulated or scorned? How come it took the union this long to force the issue? Should the union be acting on behalf of teachers that it doesn't represent? Do teachers really want shakai hoken in the first place? How do you convince a teacher interested in hanging out in Roppongi and chasing skirts that shakai hoken is in his best interests if that teacher plans to leave Japan in a year?
According to the Health Insurance Law and Employees' Pension Law, companies must enroll all workers who work more than 30 hours a week and who have been in Japan for over two months in both the health insurance and pension systems. No exceptions.
How This Affects You
Shakai hoken is not a bad thing, but if you start contributing, you can expect deductions of close to 30,000 yen from your paycheck. You may not like the deductions, but you're not necessarily throwing your money away. You can file for a refund of up to 90% of your contributions provided you've been contributing for over 6 months but stay in Japan for less than 3 years.
What Happens Next?
How this will all play out remains uncertain. Your pay could go up to cover the contributions. The schools might increase salaries in order to attract instructors. Or, you might not pay into the plans at all.
AEON has decided to give its instructors a choice:
With Option A, you're enrolled in the health insurance and pension plans, but your paycheck will effectively be 30,000 smaller each month. Option B, on the other hand, looks good on paper: Same pay for less work. But what happens when contracts come up for renewal? Will the terms of employment change? How will working relationships between teachers enrolled in shakai hoken and those not enrolled change? Which path will the eikaiwas take? Will they grudgingly enroll all of its teachers in shakai hoken, or will they start hiring part-timers to avoid having to pay into the health insurance and pension plans?
The media, however, has yet to ask the really pertinent question: How is it that the major eikaiwa schools avoided paying into the health insurance and pension plans for so long? These are large corporations with thousands of foreign employees. Have the schools been paying off the government? I love a good conspiracy theory as the next guy, but given that non-enrollment in shakai hoken is a nation-wide problem not limited to eikaiwa, you can probably chalk it up to a lack of manpower at the Social Insurance Agency. They probably don't have the resources to enforce enrollment of everyone, so people and companies fall through the cracks.
If you're planning to teach English in Japan, get the facts before you come. Ask your employer about your insurance options. Under the law, your employer must enroll you in shakai hoken. Anything else is illegal. Shakai hoken is expensive, but you can file for a refund if you stay less than 3 years in Japan.