Abstract
The paper analyzes the insurance coverage, wages, and paid time off policies in Japan, the United States, and the United Kingdom. Regarding insurance coverage, Japan and the US require employers to contribute to their employees’ health insurance plans, while Japan also requires employers to provide coverage for mental health care, long-term care, and critical illness. Additionally, both countries offer life and disability insurance plans, though the level of coverage varies. Both countries have minimum wage laws in place, and wages are typically determined by the job’s market value and the employee’s skills and experience. However, Japan has higher income tax rates and employee benefits such as maternity and paternity leave, while the US has a flat tax system. Additionally, the US does not require employers to provide paid vacation days, paid holidays, or sick leave, though some states have laws mandating certain benefits. Meanwhile, the UK requires employers to provide employees with vacation days, holidays, sick leave, and additional benefits such as maternity and paternity leave. Finally, the paper provides recommendations for organizations looking to expand into Japan, such as offering similar benefits and wages.
Insurance Coverage
Japan:
Similarities
Employers must contribute to their employees’ health insurance plans in Japan and the US. This contribution typically ranges from 50-75% of the plan’s total cost. For example, in Japan, employers must pay at least 50% of their employees’ health insurance costs (Chen & Xu, 2020). Employers must pay at least 60% of their employees’ health insurance costs in the US. Both countries also offer disability and life insurance plans typically paid for by the employer. In the US, employers usually provide short-term disability insurance, which provides employees partial wages when they cannot work due to an illness or injury. In Japan, employers typically provide disability insurance plans to cover medical expenses and lost wages due to an illness or injury (Chen & Xu, 2020). Also, both nations have life insurance programs that provide financial help to employees’ families in the case of their death.
Differences
The main difference between Japan and the US regarding insurance benefits is the level of coverage. In Japan, employers must provide more comprehensive coverage than in the US (Ebi & Bando, 2019). This includes coverage for mental health, long-term care, and severe illness. In Japan, mental health coverage covers counseling services and treatment for depression and other mental diseases. Long-term care insurance in Japan typically covers care facilities, assisted living facilities, and personal health care. Critical illness coverage in Japan typically covers the cost of cancer, stroke, and heart disease treatments. In the US, employers do not typically provide coverage for these services. In addition to the more comprehensive coverage offered in Japan, employers are also required to provide employees with a pension plan (Chen et al., 2019). This plan provides employees with a monthly income after retirement. The pension amount depends on the employee’s years of service and salary. In the US, employers are not typically required to provide pension plans to their employees.
United Kingdom
Similarities
Organizations in the United Kingdom and the United States provide health insurance, life insurance, disability insurance, vision insurance, and dental insurance. Both countries also offer essential worker’s compensation benefits, which provide financial compensation to employees if they are injured or become ill due to their job (Fisk et al., 2020). These benefits are essential to providing a safe and secure working environment and ensuring that employees can receive medical care and financial support if they become injured or ill. In addition, many companies in both countries also offer additional benefits, such as travel and pet insurance, which can be tailored to employees’ needs (Fisk et al., 2020). Although the specifics of each country’s benefits may differ, the overall goal is to provide employees with the financial security and protection they need.
Differences
The United Kingdom has a more comprehensive set of insurance benefits than the United States. For example, in the UK, employers are legally required to provide employees with a workplace pension plan, which allows them to save for retirement (Cribb & Emmerson, 2019). Private medical insurance, mandated by law for all UK employers, helps pay for expensive out-of-pocket medical expenses. In contrast, while the US does offer some medical insurance benefits, it does not require employers to provide a workplace pension plan. In addition, the UK has more stringent regulations concerning employee safety, which can require employers to provide additional insurance benefits such as accident insurance to protect employees in the event of an accident.
Wages
Japan
In Japan and the US, wages are generally determined by the job’s market value, and minimum wage laws are in place. In Japan, wages are regulated by the government, and the prefecture determines the minimum wage. For example, Tokyo’s minimum wage is 874 yen per hour, while Osaka’s is 823 yen per hour (Hansen, 2022). Also, US law mandates a minimum wage of $7.25 per hour. In both countries, wages are typically determined by the job’s market value, with employers offering salaries and benefits based on the employee’s skills and experience (Edo, 2018). This can include performance-based bonuses and other forms of compensation such as health insurance and paid vacation time. Additionally, employers in both countries may offer additional benefits such as stock options, retirement plans, and other employee incentives. Furthermore, both countries have labor laws to protect employees’ rights. In Japan, the Labor Standards Act governs labor rights and conditions, while in the US; the Fair Labor Standards Act is the primary law governing labor rights and conditions. These laws ensure that employers provide their employees with fair wages and working conditions.
Differences
In the US, wages are primarily determined by the free market, with employers able to adjust salaries based on the availability of labor, the cost of living, and other factors. In Japan, wages are more heavily regulated by the government, with the minimum wage determined by the prefecture. Additionally, Japan has much higher income tax rates than the US, with individuals earning more than 20 million yen per year subject to a maximum tax rate of 55% (Kitao & Mikoshiba, 2022). This may lead organizations to offer higher wages and benefits to attract and retain talent.
Similarities
The UK and the US have some similarities in terms of wages. The National Minimum Wage (NMW) in the United Kingdom is set at £7.50 per hour for those aged 25 and over. This rate is reviewed annually and can be adjusted depending on the economic climate. This rate applies to workers in all industries, including hospitality, retail, construction, and manufacturing. The federal minimum wage in the United States is now $7.25 per hour (Edo, 2018). However, many states have implemented their higher minimum wage rate, with California having the highest minimum wage at $12.00 per hour. In addition to the minimum wage, wages in both countries are primarily determined by the market and the employee’s skill level (Clemens, 2021). In the UK, wages are typically higher in cities such as London, Manchester, and Birmingham than in rural areas. Similarly, in the US, wages are generally higher in urban areas, such as New York City, than in rural areas. Moreover, wages are also determined by the job market regarding the supply and demand for particular skills.
Differences
The main difference between the wage systems in the United Kingdom and the United States is taxation. In the UK, employees are subject to a progressive tax system, where individuals are taxed according to their income level (Gotham et al., 2021). This means that those with higher incomes will be taxed more than those with lower incomes. In the US, the federal government has a flat tax system, where all citizens are subject to the same tax rate irrespective of their income. In addition to the tax system, the two countries differ regarding employee benefits. In the UK, employers must provide certain employee benefits, such as maternity and paternity leave, sick pay, and holiday pay. The federal government does not mandate benefits in the US, though some states have implemented laws requiring employers to provide certain benefits. Moreover, employers in the US may provide additional benefits to employees, such as health insurance, 401(k) contributions, and bonuses.
Paid Time off
Japan
In Japan, the Labor Standard Law requires employers to provide employees with a minimum of 10 days of paid vacation per year and up to 20 days per year for employees who have worked for the same company for at least six consecutive years (Shan & Troshani, 2020). Japanese employers must also provide paid holidays such as New Year’s Day, Respect for the Aged Day, and Health-Sports Day. Employers must also provide employees with paid sick leave, which is usually at least ten days of paid sick leave per year. However, in the US, employers are not required to provide employees with paid vacation days, holidays, or sick leave. However, many companies in the United States provide their workers with paid holidays, paid vacation, and sick days (England et al., 2020). Although federal law does not mandate it, certain states mandate that companies provide paid time off in the form of vacation, holidays, and sick days. For instance, in California, workers are entitled to at least three paid vacation days per year, whereas, in the state of Washington, they are entitled to at least five. Moreover, in the United States, many companies voluntarily provide paid time off for holidays like Memorial Day.
United Kingdom
The primary difference between the paid time off policies in the UK and the US is that the UK requires employers to provide employees with paid time off like vacations, holidays, and sick days; however, the US does not. In the United Kingdom, workers are entitled to 5.6 weeks of paid vacation per year, increasing to 28 days for those who have been with the same company for at least five years (Davies, 2020). Additionally, employers must provide employees with paid holidays, such as Christmas Day. Employers must also provide employees with paid sick leave, which is usually at least seven days of paid sick leave per year. In the US, employers are not required to provide employees with paid vacation days, holidays, or sick leave. However, many employers offer their workers paid holidays, sick days, and vacations. (England et al., 2020). Although no federal law requires employers to offer paid time off, some states mandate that businesses give workers time off for vacation, holidays, and sick days with pay.
Areas of Improvement
Japan
Japan could do better by providing additional benefits such as stock options, retirement plans, and other forms of employee incentives that are more common in the US. Stock options allow providing a discount for employees to purchase a predetermined number of shares in the company. This gives employees a financial stake in the company and encourages loyalty. Retirement plans, such as 401(k) s, allow employees to save for retirement and receive employer contributions. Other employee incentives may include bonuses, flexible work hours, and tuition reimbursement.
United States
The US should provide more comprehensive benefits such as pensions, private medical, and accident insurance. Pensions provide employees with a regular income after retirement and often include employer contributions. Private medical insurance can cover medical services not covered by public health insurance plans, such as specialist and dental care. Workers with accident insurance are safeguarded monetarily in the event of an incident.
United Kingdom
Lastly, the UK could provide additional employee incentives such as stock options and retirement plans, which are more common in the US. Stock options give employees an ownership stake in the company, and retirement plans, such as defined contribution pensions, allow employees to save for retirement. The UK could also benefit from more comprehensive coverage for long-term care and mental health services. Mental health coverage can provide access to counseling, therapy, and medication to treat mental health issues. In contrast, long-term care coverage can help pay for the price of assisted living facilities and nursing homes.
Recommendations
Country to expand
Japan is an ideal market for business expansion due to its highly developed economy and infrastructure. The country has a strong and stable political climate, which has enabled the country to achieve high levels of economic growth (Jiang, 2019). Additionally, Japan’s highly developed healthcare system provides comprehensive insurance benefits to its citizens. The country also has a strong labor market with laws protecting employees’ rights and a culture receptive to foreign businesses. Japan has a long history of innovation and success, with many companies leading technological development (Jiang, 2019). For example, Sony is one of the world’s leading technology companies, and Toyota is one of the world’s leading car manufacturers. Furthermore, the country offers businesses a range of incentives, such as tax breaks, subsidies, and grants to encourage investment. Finally, Japan is a significant trading partner with the US, making it an ideal market for US companies looking to expand globally.
Recommended Benefits and Wage Practices
The organization should consider offering benefits and wages similar to the US when expanding into Japan. This could include health insurance plans, disability and life insurance plans, pension plans, travel insurance, pet insurance, and other employee incentives such as stock options and retirement plans (Chen et al., 2020). These benefits should be tailored to the needs of the workforce in Japan, as well as the needs of the organization. The company might consider paying its Japanese workers a wage that meets or above the bare minimum required by law in each prefecture. The Japanese Labor Standards Law mandates that any company having Japanese employees must provide them with paid holidays, vacation, and sick leave (Chen et al., 2020). In terms of wages, the organization should consider offering its employees in Japan salaries and benefits that align with the job’s market value and the employee’s skills and experience. This could include performance-based bonuses and other forms of compensation such as health insurance and paid vacation time. Additionally, the organization should consider providing its employees in Japan with additional benefits such as stock options, retirement plans, and other employee incentives (Chen et al., 2020). These benefits should be tailored to the needs of the workforce in Japan, as well as the needs of the organization.
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