Japan has a universal insurance system whereby everybody residing in Japan must, in principle, take part in the public health (medical) insurance and pension insurance system. There are four different kinds of insurance system which companies are legally obliged to take part in; all workers that meet certain criteria are covered by the insurance.
(1) Workers' Accident Compensation Insurance
This covers any illness or accident incurred by workers as a result of work or while commuting to or from work.
(2) Employment Insurance
This provides for workers that become unemployed and helps to maintain stable employment such as by providing financial aid and subsidies.
(3) Health Insurance and Nursing Care Insurance
These cover medical and nursing care expenses incurred by workers.
(4) Employees' Pension Insurance
This provides for benefits to workers in their old age, or in the case of death or disability.
Generally, Workers' Accident Compensation Insurance and Employment Insurance are known collectively as "labor insurance," while Health, Nursing Care and Employees' Pension Insurances are referred to collectively as "social insurance."
A company must enter these insurance systems when first incorporating or hiring staff by submitting labor and social insurance notification forms to the relevant authorities. The company usually pays insurance premiums by deducting the portion of the premiums payable by employees from their wages, and paying these together with the portion of the premiums payable by the company to the relevant authorities.