Paid parental leave in Japan: not if you’re in charge

Did you know that, if you’re classified as a ‘senior woman’ in the Japanese workforce, you may not be eligible to receive the Government’s full suite of maternity benefits?

No? Me neither!

I’ve been finding out the hard way.

Since becoming pregnant, here are some things I’ve learned about the country’s labour insurance system . . .

It’s all in the title

In Japan, following the birth of a child, regular full-time employees (seishain, 正社員) are able to take up to 1 year of paid parental leave at 67% of their base salary (there is a cap on this benefit; more on this later). This is quite a generous and progressive offering from the Government, which regularly receives bad press on matters related to gender equality.

Since I’ve paid into the social, labour and welfare system as a full-time employee with three different organisations across 13 years, I never doubted that, when the time came, I would be eligible for this benefit.

I was wrong . . .

After drawing up a financial and operational maternity plan for my President and board in May 2016, I found out that my nominal title of Representative Director would would preclude me from receiving ‘regular’ parental leave allowances from the Japanese system.

As far as I can understand, this is not a means-tested rule, but based only on job title. If you’re a Director, branch manager, business owner, or deemed the “person in charge” of an organisation, the same rule applies.

The law and the financials

In practice, the ‘1 year of paid leave’ – which can be shared between the mother and father – is divided into two sections:

  • Section 1: Maternity Leave
    From 6 weeks before until 8 weeks after the birth of her child, every mother enrolled in Japan’s social insurance scheme is guaranteed to receive 77% of her base salary during “Maternity Leave”. The funds to cover this 14 week period come from the Japanese Government’s health insurance pot (which sits under social insurance). I would be eligible for this benefit.
  • Section 2: Childcare Leave
    From 8 weeks after the birth until the baby’s first birthday, a mother or father, or a combination of both, can take paid “Childcare Leave” – also at 67% of the parent’s base salary (capped at a certain amount). The funds for this 10-month period come from the Japanese Government’s employment insurance pot (which sits under labour insurance). As the ‘person in charge’ of my organisation, I would not be eligible for this benefit.

Luckily, my board is comprised of progressive-minded folks, who agreed we could dip into our organisation’s reserves to cover the gap left by the Japanese system during any period of Childcare Leave (e.g. from when my baby was 2 months until 5 months old). I was very grateful for this suggestion.

However, this was not the point.

Womenomics – the rhetoric and the reality

As part of a larger plan to revitalise the Japanese economy, Prime Minister Abe has been pushing Womenomics – a set of measures to promote and advance women in the workplace.

The Keidanren (Japan Business Federation) has requested its member companies to create action plans for the promotion of female workers at all levels. The Keizaidoyukai (Japan Association of Corporate Executives) pledges to encourage women into senior leadership roles, and establish a ‘next-generation managerial development system for cultivating female managers and executives’.

Yet despite these public and private sector endorsements, it seems that the current system has built-in economic disincentives to progress being made.

For, why would a woman of child-bearing age step up into a senior position, knowing that she may not be eligible for the Government’s full financial support if she did indeed wish to take time off – more than 8 weeks – to care for a newborn baby?

And why would a company place a woman in a senior job during child-bearing years, if that firm might have to ‘cover the gap’ – possibly up to 10 months of leave – left by the Japanese Government’s Childcare allowance scheme?

In short, the well-documented Womenomics rhetoric does not match the in-the-trenches reality.

The Government’s vision seems hindered by its own benefits policy.

Culture and cash

Since I learned about, and shared details of, the policy with business associates, reactions from senior Japanese businesspeople have been interesting:

  • ‘Well, that makes sense because you wouldn’t normally be in such a senior position in your 20s or 30s’.
  • ‘If you are in a high-ranking role, your company should be able to pay your childcare leave’.
  • ‘You must be rich enough to take unpaid leave, anyway’.

None of the above apply to me.

Neither might they apply to a Japanese woman running her own business, a charity, or an SME (small-to-medium enterprise) – or to a young professional who has, against many odds, risen to the top of a Japanese organisation before she’s fifty years old.

My reality

While my title of Representative Director could be considered impressive, in reality I run a not-for-profit organisation (NPO), where I answer to a volunteer board, run an exceptionally tight budget, and do not earn the type of salary commanded by Representative Directors of large multi-national corporations.

There is no way I could feel comfortable taking our nimble NPO into the red – paying my salary as well as that of the person who’s being hired to cover my maternity leave.

So, barring the offer from my board, the two main options I faced were: take unpaid leave, or return to work when my baby was just 8 weeks old. Neither, as you might imagine, were appealing.

The lesson

Although Japanese maternity and childcare benefits are relatively generous, and there are many ways in which the current health, labour and welfare system supports male and female full-time workers, the above situation is in no way ideal for senior professionals during child-bearing years.

It seems fair to say that my experience so far runs counter to some of the professed aims of Womenomics.

So, when you take on a high-level position in Japan, please remember to check the terms and conditions of your contract very carefully, and confirm whether or not you are enrolled in the employment insurance scheme. Seek external legal advice if at all possible, in order to fully understand the pros and cons of being the ‘person in charge’.

Might you be considered too senior to take paid parental leave?

I’d genuinely love to know what you think of the above, and / or if you’ve had any experience navigating the tricky terrain of Japan’s childcare leave system.

How does the Japanese system compare to that in your country?

Japan’s Childcare leave benefits, explained (Japanese):

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