I was in a traffic accident while delivering for Uber Eats or a similar app and was told workers' compensation does not apply because I am an independent contractor. Is that true?

Question

阿部国際法律事務所 · Accepted Answer

Contract delivery riders are generally outside workers' compensation, but can join through special enrolment to be covered for delivery accidents (not commuting).

Delivery riders who work under service contracts are, as a rule, not "workers" for the purposes of workers' compensation insurance in Japan. However, people who deliver by bicycle, moped or car can join workers' compensation through a scheme called "special enrolment", via an approved special enrolment association. If enrolled, they can receive benefits for accidents during deliveries. For this category, though, accidents while commuting are not covered. And even under a service contract, if the way the person actually works means they are a "worker", ordinary workers' compensation applies without special enrolment.

When this becomes an issue

・A food delivery rider is hit by a car during a delivery and cannot work for some time.
・The app operator says workers' compensation does not apply because the rider is a contractor.
・A company outsources its deliveries to individual riders and has no procedure for accidents.
・A company gives individual riders detailed instructions on hours and routes.

1. Workers' compensation is designed for "workers"

Workers' compensation insurance pays benefits for injuries and illnesses suffered by workers in the course of work or while commuting (Industrial Accident Compensation Insurance Act, Art. 7(1)). A worker here is assessed in the same way as under the Labour Standards Act: a person employed in a business and paid wages (Labour Standards Act, Art. 9).

Self-employed people working under service or contracting agreements are, as a rule, not workers in this sense. So unless they take action, workers' compensation does not cover their delivery accidents. The statement that "workers' compensation does not apply because you are a contractor" reflects this general rule.

There are, however, two routes: special enrolment, and cases where the person is in substance a worker.

2. Special enrolment for delivery riders

Special enrolment lets certain people who are not workers, and who carry out businesses or tasks specified by law, join workers' compensation voluntarily (Industrial Accident Compensation Insurance Act, Art. 33).

For delivery work, the following businesses qualify (Enforcement Regulations of the Industrial Accident Compensation Insurance Act, Art. 46-17(i)):

・Passenger or freight transport using a motor vehicle
・Freight transport using a moped or bicycle

According to the Ministry of Health, Labour and Welfare (MHLW), freight transport by moped was added from 1 April 2013, and by bicycle from 1 September 2021. Food delivery riders join under this category.

Riders do not apply directly as individuals. They join through a special enrolment association approved by the director of the prefectural labour bureau (Act, Art. 35(1); MHLW guide to special enrolment). Coverage starts from the date enrolment is approved (Act, Art. 35(1)(ii)), so joining after an accident does not cover that accident.

3. Benefits under special enrolment, and what is not covered

A rider with special enrolment can receive medical, absence-from-work, disability and survivors' benefits for injuries during the work of riding for deliveries and loading or unloading goods. For example, the absence-from-work benefit is paid from the fourth day off, at 60% of the daily benefit base plus a special payment of 20% (MHLW leaflet). The daily benefit base is a daily amount used to calculate benefits, chosen when joining.

Commuting accidents need care. People enrolled under the transport category are covered only for accidents in the course of work, not while commuting (Act, Art. 35(1); Enforcement Regulations, Art. 46-22-2; MHLW guide to special enrolment). An accident on the way from home to the delivery area, for example, may not be covered.

4. How this relates to the freelancer category introduced in November 2024

From 1 November 2024, work carried out by specified entrusted business operators (freelancers) under service contracts also became eligible for special enrolment (Enforcement Regulations, Art. 46-17(xii); MHLW). This was the same day the Freelance Act (Act on Ensuring Proper Transactions Involving Specified Entrusted Business Operators) came into force.

However, if the work falls under another special enrolment category, the person must join under that category (MHLW guide to special enrolment). The MHLW gives food delivery by car or moped as an example of the transport category, not the freelancer category. The MHLW pamphlet states that benefits cannot be received for work under another category unless the person is enrolled under that category. A rider who has joined only under the freelancer category is therefore not covered for delivery work.

5. When a contractor is in fact a "worker"

Whether someone is a worker depends on how they actually work, not on what the contract is called. The MHLW says this is assessed as a whole from the content of the contract, how the work is done, the pay and other factors, regardless of whether the contract is labelled a contract for work or a mandate.

The core test is "subordination in employment": whether the person is free to refuse work, whether they are directed and supervised in how they do it, whether their place and hours are fixed, and whether pay depends on time worked (Labour Standards Act Study Group report of 19 December 1985). If the person is in substance a worker, ordinary workers' compensation applies even without special enrolment.

6. Claims against the other party

Separately from workers' compensation, the rider can claim damages from the other party to the accident. Where the other party is a motor vehicle, a person who operates the vehicle for their own purposes is, as a rule, liable for injury caused to others by that operation (Compulsory Automobile Liability Security Act, Art. 3). Claims against the other party's compulsory and voluntary insurance should be considered.

Workers' compensation benefits and damages from the other party cannot both be received for the same loss. Where an accident is caused by a third party and the government pays workers' compensation benefits, the government acquires the injured person's damages claim against the third party up to the amount paid (Industrial Accident Compensation Insurance Act, Art. 12-4(1)). Conversely, if the injured person has already received damages for the same loss from the third party, the government may withhold benefits up to that amount (Art. 12-4(2)). Which claim is made first, and the terms of any settlement, therefore affect how much the person receives. It is important to check how a settlement interacts with workers' compensation before agreeing to it.

7. Points for companies that outsource deliveries to individuals

Companies that outsource work to individual riders should also check several points.

First, the reality of the relationship. If the company sets working hours, gives detailed instructions and does not allow riders to refuse work, the relationship may be found to be employment. The company would then bear employment-law obligations, including workers' compensation.

Second, the Freelance Act. A business that outsources work must immediately set out the details of the work, the amount of pay, the payment date and other terms in writing or electronically (Freelance Act, Art. 3(1)). Businesses that have employees, among others, must take measures such as setting up a system to deal with harassment complaints (Art. 14(1)), and must as a rule give at least 30 days' notice before terminating a continuing service contract (Art. 16(1)).

Third, accident procedures. Deciding in advance who receives accident reports from riders and what is recorded makes later disputes easier to avoid.

Steps you can take now

・(Riders) Check whether you are enrolled under the transport category, and confirm your special enrolment association and approval date.
・(Riders) Record the date, time and place of the accident, the other party's name, contact details and vehicle number, and whether it was reported to the police.
・(Riders) Keep receipts and medical certificates from the hospitals you visit.
・(Companies) Check that your contracts with riders match how you actually give instructions and set hours.
・(Companies) Check that you set out the terms of each engagement as required by Article 3 of the Freelance Act.
・(Companies) Decide who receives accident reports and how they are recorded.

When to consult a lawyer

・You were injured in an accident but were not enrolled.
・You work under detailed instructions from the company and think you may be a worker.
・Settlement talks with the other party or their insurer are not progressing.
・(Companies) A rider has sent a letter claiming they should have been treated as a worker, or seeking compensation for an accident.
・(Companies) You want to review your contracts and ways of giving instructions to reduce the risk of them being treated as employment.

Frequently asked questions

Q. If I join special enrolment after an accident, is that accident covered?
No. Coverage under special enrolment starts from the date enrolment is approved (Industrial Accident Compensation Insurance Act, Art. 35(1)(ii)). You need to join before you start delivering.

Q. Is an accident on the way from home to the delivery area covered?
People enrolled under the transport category are not covered for commuting accidents (Act, Art. 35(1); Enforcement Regulations, Art. 46-22-2). Whether a particular journey counts as work depends on the circumstances of the accident.

Q. If I have joined under the freelancer category, are delivery accidents covered?
No. The MHLW says work that falls under another special enrolment category must be enrolled under that category. Delivery work is, as a rule, enrolled under the transport category.

Q. Can someone on a service contract be recognised as a worker for workers' compensation?
Yes. Whether someone is a worker is assessed as a whole from how they actually work, including whether they are directed and supervised and the nature of their pay, regardless of the form or name of the contract (MHLW; Labour Standards Act Study Group report). If they are in substance a worker, ordinary workers' compensation applies.

Q.I was in a traffic accident while delivering for Uber Eats or a similar app and was told workers' compensation does not apply because I am an independent contractor. Is that true?

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