The different forms of employment in Japan – What are you getting into?

So, you got yourself an interview, passed it and now your future employer wants you to sign your first employment contract in Japan. Congratulations on making it this far! But what is this, your contract says you will be employed as a seishain? What is that? A yuuki keiyakushain? Never heard of one of those…

As with many other facets of life, Japanese employment systems and contracts might be slightly (or very) different than what you are used to from back home. Understanding your contract – before you sign it – is vital, especially when it comes to working abroad. Do you really want to uproot your life, go and work abroad, only to find out that the work that you signed up for is completely different from what you had originally imagined?

Breaking down a standard Japanese employment contract would go far beyond the usual scope of my blog articles, so for now I thought it might be helpful if I describe the different forms of employment that are most commonly offered in Japan. With this, you will – hopefully – be better able to decide whether a position is suited for you or not.

The most common forms of employment in Japan

Seishain (正社員) – most often translated as “permanent employee”. Becoming a seishain for a reputable company is the aim of every Japanese university student. As a seishain, you are – in principle at least – hired for life (that is until you reach retirement age), which gives the necessary financial and emotional stability for providing for a typical nuclear family. You get your monthly paycheck, a hefty bonus once or twice a year, full social benefits and your employer might even pay part of your rent for you. This image has cracked somewhat in recent times, many seishain found themselves out of a job during the 2008 financial crisis for example, but a seishain position remains perhaps the most desirable form of employment in Japan. According to the Ministry of Health, Labour and Welfare, about 60% of the Japanese workforce are employed as seishain (source in Japanese).

Keiyaku shain (契約社員) – most often translated as “contract employee”. A weird one, since a contract is the basis for any form of employment, even part-time. The distinguishing difference to a seishain is that a keiyaku shain often has a fixed term contract. One to four year contracts are normal here. Some companies offer a so-called touyou (登用) system, where a keiyaku shain has the chance to become a seishain. In some companies, you can become a seishain simply by working for one year as a keiyaku shain, others might make it more difficult by requiring you to pass certain exams first. In principle, if you have worked as a keiyaku shain for a company for five years, the company is then required to offer you unlimited employment, even if they do not offer touyou. The idea is good, giving you incentive to “work your way up”, in practice many companies simply let their employees go after four years of employment.

Apart from contract length, a keiyaku shain will also often have less benefits than a seishain. No housing allowance or access to company-sponsored retirement plans, smaller (or non-existant) boni, and the fixed contract term all mean that being a keiyaku shain is generally viewed as being less desirable.

Haken shain (派遣社員) – most often translated as “dispatch/temporary employee”. Among the full-time employment positions, haken shain is generally viewed as being the least desirable. When you are a haken shain, you are employed by a haken gaisha (派遣会社), who will handle contract talks and pay your salary. The haken gaisha will then dispatch you to another company in need of employees where you are then expected to work. Since you are an outsider at your place of work, it can be quite difficult to find your way around, contracts as short as three months are also not uncommon. In the most extreme cases, you could end up switching work every couple of months, giving you almost no stability. While the haken gaisha pays your salary, this is only true as long as you are dispatched to and working at an actual company. If the haken gaisha has nowhere to dispatch you, you could suddenly find yourself without a paycheck. You will also only get the most basic benefits. If you are easily bored, this revolving-door-style of employment might be for you, most people only turn to employment as a haken shain if there is absolutely nothing else available. Especially for foreigners, there are many seedy haken gaisha looking to exploit vulnerable people that have no idea about Japanese labor laws, so be careful.

Arubaito/paato (アルバイト・パート) – the best catch-all translation here is “part-time work”. Arubaito comes from the German word Arbeit (work), while paato is literally just the English word “part” pronounced in Japanese. Legally speaking, there is no difference between arubaito and paato, both are part-time (up to 28 hours/week) forms of employment with fixed contract lengths. Culturally, there is a big difference between these two however. The word arubaito is used and understood as “someone doing work in addition to their principal occuption”. If a student works at a bar, while being enrolled in and studying at a University, that is arubaito. If a full-time employee works part-time at the convenience store on the weekend to make ends meet, that is arubaito. Paato on the other hand often refers to “someone doing part-time work while they have no other significant form of income”. If a stay-at home mom starts working part-time after the kids are in school, that is paato. In general, paato is mostly aimed at mothers and housewives, who often have difficulties finding full-time employment after childbirth. These definitions are by no means set in stone, but if you are a student and apply for a position advertised as paato, you might still get turned down and if a housewife in her 40s applied for a arubaito position, she might get turned down as well.

I hope that this has helped someone to better understand the different forms of employment that are common in Japan. Make sure you read every employment contract before you sign anything!

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