As the COVID-19 pandemic has spread, governments have been responding and in many cases, enacting unprecedented economic stimulus bills to provide financial support to affected individuals and employers. Below, we have summarised key developments adopted in response to the coronavirus pandemic that impact individuals and employers in Japan.
COVID-19 Special Provision for Employment Adjustment Subsidy
The Employment Adjustment Subsidy is a monetary relief fund to help businesses who have been forced to reduce operations due to economic causes, and in turn pay statutory leave allowances and wages where employees are placed on temporary leave, occupational training or assignments with the objective of maintaining employment.
For the purposes of the fund, the authorities outlined what will be considered as economic causes, with examples provided below;
- Reduction of business operations in response to reduced orders from COVID-19 affected customers, clients or suppliers.
- Reduction of business operations due to voluntary business closure in response to government request.
- Customer decline due to public restraints in response to government request.
- Customer decline due to continuous cancellation of reservations from tourists as a result of reputational damage.
- Reduction of business operations due to voluntary business closure in response to COVID-19 infected employees.
For impacted employers, the funding support is outlined below.
|Subsidy details and amounts||Rate subsidised
(small and mid-size company)
|Applicable period||First day of leave, occupational training or secondment to begin BEFORE 23 July 2020|
|Maximum daily amount JPY 8,330||2/3 (3/4 if employment is maintained)||4/5 (9/10 if employment is maintained)|
|Addition for occupational training||JPY1,200/employee per day|
|Maximum payment days||100 days/year + Eligible Period|
|References on Special Provisions for Employment Adjustment Subsidy (Japanese only)
COVID-19 School closure subsidy
As schools have closed mandatorily across Japan, additional relief is provided to support employees who have taken leave in order to care for their children.
Employers granting paid leave between 27 February 2020 to 31 March 2020 to employees caring for the following child/children as a guardian:
|Subsidy details||Wages paid to employees granted paid leave x 10/10
Maximum daily amount: JPY8,330/employee
|Application window||Between 18 March 2020 to 30 June 2020|
|※ Reference (Japanese only)
The role of human capital professionals
Human resources leaders play a critical role in ensuring businesses execute their global growth strategy. COVID-19 outbreak presents a range of unique and complex challenges to businesses – sustaining business operations while ensuring the safety and wellbeing of employees. While further measures are announced, employers can review their eligibility and the financial impact it has to support business continuity. With proactive engagement with the business, human capital professionals can help navigate uncertain paths ahead – understanding complexities, identifying risks, managing costs, enabling employees to continue working and ensuring business continues.