The main differences between permanent and non-regular employees in Japan are the employment contract period, compensation system, employee benefits, and job stability.
Key Differences Between Permanent and Non-Regular Employees
The primary differences can be categorized into these four points:
1. Employment Period
- Permanent Employees (Seishain): There is generally no fixed term for the employment contract. Unless they voluntarily resign or the company goes out of business, they can work until retirement age.
- Non-Regular Employees: A contract period is specified (e.g., a one-year contract, a three-month contract). While contract renewal is possible, there is a chance it may not be renewed due to the company’s circumstances.
2. Working Hours and Location
- Permanent Employees: They typically work full-time, adhering to the company’s designated working hours. They may be subject to transfers or relocations.
- Non-Regular Employees: They often have the flexibility to choose their working hours and location, allowing for a more adaptable work style compared to permanent employees. However, their working hours may be shorter (e.g., part-time, arubaito) or limited to a specific period (e.g., contract employees, dispatched employees).
3. Salary and Compensation
- Permanent Employees: They receive a fixed monthly salary, and it’s common for them to be paid bonuses, retirement allowances, and various benefits (e.g., housing allowance, family allowance). They also have opportunities for pay raises, leading to a more stable income.
- Non-Regular Employees: They are often paid an hourly or daily wage, and their income tends to be less stable. It is rare for them to receive bonuses or retirement allowances, or they are significantly smaller than those for permanent employees.
4. Employee Benefits and Social Insurance
- Permanent Employees: They are eligible for legally mandated social insurance (health insurance, employee pension insurance, employment insurance, and worker’s compensation insurance). Additionally, many companies offer a comprehensive range of non-statutory benefits, such as housing, family, and qualification allowances.
- Non-Regular Employees: They can enroll in social insurance if they meet certain conditions (e.g., working hours, employment period), but the benefits available to them are often limited compared to permanent employees.
Pros and Cons of Each Employment Type
Permanent Employees
- Pros:
- Stable income
- High job security
- Extensive employee benefits
- Higher social credibility (advantageous for loan applications, etc.)
- Long-term career advancement and skill development opportunities
- Cons:
- Possibility of transfers or relocations
- Can involve significant overtime or holiday work
- Less flexibility in working hours and days off
- Often entrusted with greater responsibilities
Non-Regular Employees
- Pros:
- Flexibility to choose working hours and days
- Better work-life balance
- Easier to choose a desired work location
- Job duties may be limited, allowing them to focus on a specific skill set
- May be easier to find a job or change jobs
- Cons:
- Income is often unstable and tends to be lower than that of permanent employees
- Often no bonuses or retirement allowances
- Limited employee benefits
- Lower job security
- Can be challenging to build a long-term career
What Does “Limited Employee Benefits” Specifically Mean?
“Limited employee benefits” refers to the fact that the types and scope of benefits available to non-regular employees are narrower than those for permanent employees.
Specific Examples
- Bonuses and Retirement Allowance: Most non-regular employees are not eligible for bonuses paid multiple times a year or a retirement allowance system, which are common for permanent employees.
- Various Allowances: While they may receive a commuting allowance, they often do not get other common allowances for permanent employees, such as a housing allowance, family allowance, or position-based allowance.
- Condolence/Celebratory Leave: While celebratory or bereavement leave may be paid for permanent employees, it may be unpaid or not available at all for non-regular employees.
- Special and Long-Term Leave: Special leaves for childcare, nursing care, refresh breaks, or anniversaries that are offered to permanent employees are often not applicable to non-regular employees.
- Employee Discounts and Retreats: Employee discounts on company products or access to company-owned retreats or affiliated facilities may be restricted to permanent employees only.
These differences stem from the fact that many non-regular employees are on hourly or daily wages and have limited contract periods. The disparity in employment types contributes to the gap in the benefits provided by companies.
