Japanese Version

　Overview of Japan’s government-run Employment Adjustment Subsidy is as follows. It is recommended to visit web sites of Ministry of Health, Labor and Welfare (MHLW) at the end of this page for its details and the latest information.

What is Employment Adjustment Subsidy?

　Employment Adjustment Subsidy (EAS in this article) is to reimburse an business owner a portion of leave allowance paid to workers on stand-by at home as planned and reported to a HelloWork labor office of Japanese government.

　Qualifications, subsidy payment and application procedures of EAS are summarized below. Expanded application of EAS is also covered, which has been Implemented to ease business and employment downturn caused by the COVID-19 infections.

　Should you need support of a labor and social security attorney, please contact Anshin Services for consultation. Service fee and contact information are included towards end of this page.

Definition of Small-Medium Enterprise (SME) and Large Enterprise (LE)

　As you see below, some qualifications and payment conditions are different based on size of an applying company, which is classified either as a Small-Medium Enterprise (SME) or a Large Enterprise (LE). Please find the sizing definition in this page.

Qualifications

　A company can apply for EAS when it meets qualifications listed below.

  • It enrolls Employment Insurance for one year or longer.（Insurance enrollment）
  • It has adjusted employment and the adjustment meets criteria listed below.
    • It is due to economic reasons like business downturn, large scale changes in industries (Economic reasons).
    • Its sales or production has been declined by 10% or larger in three-month average when compared against the same three-month period last year (Downturn ratio).
    • Number of workers in three-month average including both employees and dispatch workers has NOT been increased by the limits or above when compared against the same three-month average last year (Employment not increasing)
      • SME: Over 10% and 4 persons or above
      • LE: Over 5% and 6 persons or above
    • Employment adjustment is based on labor-management agreement. (Agreement with labor)
      • where leave allowance should be 60% or higher of average daily wage of a worker as enforced by labor laws.
    • Adjustment is larger than a lower limit in terms of person-days of leave against its total. (Adjustment size)
      • SME: 1/20, one twentieth
      • LE: 1/15, one fifteenth
  • Interval of one year or longer since the last EAS application period has passed, which is required before applying the next subsidy.（Interval）
  • It can follow through the procedures in place.
    • It can submit proof documents as evidence to meet qualifications, e.g. workers register, payroll book, attendance records. (Proof documents)
    • It agrees to have on-site inspection by Labor Office when requested. (On-site inspection)
  • It does not fall into any of disqualifying criteria below.（Disqualifying criteria）
    • Fraudulent application has been made within recent years (3 or 5 years depending on timing of the application).
    • It has arrears in insurance premium in the past.
    • It has been sent to prosecutors for infringement in labor laws within the last 12 months.
    • It belongs to entertainment and amusement business sector.
    • It is, uses or is associated with anti-social forces, e.g. a gang group, or their members.
    • Its owner or a board member belongs to an organization designated by Article 4 of Subversive Activities Prevention Act.
    • It is in bankruptcy.
    • It does not agree with penalty to disclose company name for fraudulence.

Subsidy Payment

　Employment Adjustment Subsidy is paid as follows when an application is qualified.

  • Workers in scope: Employees insured in Employment Insurance, except the following:
    • Those insured for a limited period, shorter than six months.
    • Those to be dismissed or retiring.
    • Daily workers
    • Those whose cost is supported by other employment subsidies
  • Subsidy Ratio: Ratio of subsidy payment against leave allowance
    • SME: 2/3, two third
    • LE: 1/2, a half
  • Extra Subsidy for Training: Subsidy amount added on top when qualified training is provided during leave
    • JPY 1,200 per person-day
  • Limits and Offset:
    • Upper limit of subsidy unit amount: JPY 8,330 per person-day (as of April 2020)
    • Upper limit in total subsidy in terms of person-days: Up to 100 days within one year, up to 150 days within three years.
    • Offsetting Overtime: Overtime is offset from total leave in terms of person-days.

Application Procedures

　The following steps outline EAS application procedures.

  1. Business（sales or production) downturn
  2. Planning employment adjustment（stand-by at home, training and/or temporary assignment)
  3. Agreement of the plan between labor and management
  4. Repeating a cycle of [ Submission of plan >> Adjustment taken place >> Application for payment ] for every one to three months
    1. Submission of plan to Hello-Work office or Labor Bureau
    2. Adjustment (stand-by at home, training and/or temporary assignment) taken place
    3. Submission of application for payment to Hello-Work office or Labor Bureau (within two months after the adjustment)
  5. Labor Bureau reviews the application and judges payment.
  6. Bank transfer of payment

Application Expanded for COVID-19 (Corona virus) in April – June 2020

　(As of April 2020) Significant business downturn is happening in Japan as well, especially since March 2020 when national and local governments has started asking to close offices and stay at home. To cope with the downturn, MHLW has relaxed and simplified qualifications of EAS for an emergency period of April 1st and June 20th 2020, in order to expand its application to companies impacted. (This relaxation of regulations is called as “for COVID-19” in this article). (It is recommended to visit MHLW reference sites and obtain the latest information, as the regulations would be revised further to cope with the infections and downturn dynamically.)

For COVID-19: Qualifications

　EAS qualifications are revised for COVID-19 as follows, where strike-through means a qualification removed or relaxed, and orange font means one added or revised.

  • It enrolls Employment Insurance for one year or longer.（Insurance enrollment）
    • If it has enrolled by end of Nov 2019, it can apply.
  • It has adjusted employment and the adjustment meets criteria listed below.
    • It is due to economic reasons like business downturn, large scale changes in industries (Economic reasons).
      • “Decline in demand due to COVID-19 infections” can be accepted as a qualifying reason.
    • Its sales or production has been declined by 10% or larger in three-month average when compared against the same three-month period last year (Downturn ratio).
      • Its sales or production has been declined by 5% (*3) or larger in one-month average when compared against the same one-month (*1) period last year.
        • *1: In case the downturn ratio can not be met when compared against the same month last year, the comparison can be made against the same month in the year before last or any single month (*2) among the last 12 months.
        • *2: The month to be compared should be the one when an applying enterprise has enrolled Employment Insurance and employed insured worker(s) throughout the entire month period.
        • *3: Different threshold percentages to make judgement on the downturn ratio are applied as follows:
          • 5% in case the first day of standby-at-home is within the emergency period from April 1st until June 30th.
          • 10% in case the first day of standby-at-home is outside of the emergency period.
    • Number of workers in three-month average including both employees and dispatch workers has NOT been increased by the limits or above when compared against the same three-month average last year (Employment not increasing) This qualification on number of workers is removed and not required.
    • Employment adjustment is based on labor-management agreement. (Agreement with labor)
      • where leave allowance should be 60% or higher of average daily wage of a worker as enforced by labor laws.
    • Adjustment is larger than a lower limit in terms of person-days of leave against its total. (Adjustment size)
      • SME: 1/20, one twentieth 1/40, one fortieth
      • LE: 1/15, one fifteenth 1/30, one thirtieth
  • Interval of one year or longer since the last EAS application period has passed, which is required before applying the next subsidy.（Interval）
    • (This interval qualification is removed and not required: EAS can be applied without waiting for the one year interval.)
  • It can follow through the procedures in place.
    • It can submit proof documents as evidence to meet qualifications, e.g. workers register, payroll book, attendance records. (Proof documents)
      • Proof documents are simplified, which include the following:
        • Attendance records: Hand-written shift roaster can be accepted.
        • Payroll book: Copy of payment slip can be accepted.
        • Proof document for stated capital: Copy of company registration is not required.
        • Labor-management agreement: Proxy letters from workers are not required.
        • Proof document for total annual compensation: Form of Employment Insurance final premium is not required.
    • It agrees to have on-site inspection by Labor Office when requested. (On-site inspection)
  • It does not fall into any of disqualifying criteria below.（Disqualifying criteria）
    • Fraudulent application has been made within recent years (3 or 5 years depending on timing of the application).
    • It has arrears in insurance premium in the past.
    • It has been sent to prosecutors for infringement in labor laws within the last 12 months.
    • It belongs to entertainment and amusement business sector. (Entertainment and amusement business sector is also in scope).
    • It is, uses or is associated with anti-social forces, e.g. a gang group, or their members.
    • Its owner or a board member belongs to an organization designated by Article 4 of Subversive Activities Prevention Act.
    • It is in bankruptcy.
    • It does not agree with penalty to disclose company name for fraudulence.

For COVID-19: Subsidy Payment

　EAS subsidy payment conditions are revised for COVID-19 as follows, where strike-through means a condition removed or relaxed, and orange font means one added or revised.

  • Workers in scope:
    • Employees insured in Employment Insurance, except the following:
      • Those insured for a limited period, shorter than six months. (Workers insured for shorter than six months is also in scope).
      • Those to be dismissed or retiring.
      • Daily workers
      • Those whose cost is supported by other employment subsidies.
        • Those with other subsidies are in scope, though such subsidies are offset.
    • Employees not insured are also in scope, e.g. a part-timer with working hours of 20 or less a week.
  • Subsidy Ratio:
    • Ratio of subsidy payment against leave allowance
      • SME: 2/3, two third 4/5, four fifth
      • LE: 1/2, a half 2/3, two third
    • Premium ratio in case no dismissal is made
      • LE: 3/4, three fourth
      • SME: 9/10, nine tenth
        • Note that another revision (*4), as known as “Revision for Business Closure Request“, has been made on May 1st, 2020, to raise ratio to 100% (10/10) for SMEs meeting criteria described below.
      • *4: Revision for Business Closure Request
        • A Small Medium Enterprise (SME), who meets the following, can enjoy 100% subsidy ratio for its leave allowance.
          • It does not dismiss employees or terminate contractors nor temporary staff:
            • It follows governor’s request and closes its facilities:
              • If it pays leave allowance as much as 100% of average salary, OR
              • If it pays leave allowance as much as 60% or above of average salary which is larger than the upper limit, JPY 8,330 a day,
              • Then, subsidy ratio is raised to 100% for an entire allowance.
              • When applicable: This revision is applicable to stand-by at home taken place during a period when a governor requests for cooperation.
            • It pays leave allowance as much as 60% or above:
              • Then, subsidy ratio is raised to 100% for the allowance portion above 60%:
              • When applicable: This revision is applicable to stand-by at home taken place from April 8th until June 30th, 2020.
  • Extra Subsidy for Training: Subsidy amount added on top when qualified training is provided during leave
    • JPY 1,200 per person-day Increased as follows:
      • SME: JPY 2,400 per person day
      • LE: JPY 1,800 per person day
    • Online training at home is also accepted.
  • Limits and Offset:
    • Upper limit of subsidy unit amount: JPY 8,330 per person-day (as of April 2020)
    • Upper limit in total subsidy in terms of person-days: Up to 100 days within one year, up to 150 days within three years.
      • Person-days during the emergency period between April 1st and June 30th are not counted against the upper limit above.
    • Offsetting Overtime: Overtime is offset from total leave in terms of person-days.
      • (Offsetting overtime is not applied. Records of overtime is not required).

For COVID-19: Application Procedures

　EAS application procedures are revised for COVID-19 as follows, where orange font means one added or revised.

  1. Business（sales or production) downturn
  2. Planning employment adjustment（stand-by at home, training and/or temporary assignment)
  3. Agreement of the plan between labor and management
  4. Repeating a cycle of [ Submission of plan >> Adjustment taken place >> Application for payment ] for every one to three months (Plan submission can be made even after adjustment is taken place: [ Adjustment taken place >> Submission of plan >> Application for payment ] )
    1. Submission of plan to Hello-Work office or Labor Bureau
    2. Adjustment (stand-by at home, training and/or temporary assignment) taken place
    3. Submission of application for payment to Hello-Work office or Labor Bureau (within two months after the adjustment)
  5. Labor Bureau reviews the application and judges payment.
  6. Bank transfer of payment

Service Fee for Subsidy Application Support

　Service fee for subsidy application support is as follows. Prices are all excluding consumption tax of 10%: the tax is separately added on top.

  • Initial consultation: Free of charge for 30 minutes
  • Initial Fee: JPY 50,000, which will be reimbursed from Contingent Fee
  • Contingent Fee: 10% of subsidy amount paid minus Base Fee or JPY 50,000, whichever is higher
  • Others
    • Potential extra fee will be quoted for support in meeting prerequisites for application, e.g. preparation of Rules of Employment.
    • Expenses: Actual expenses for transportation, postal and fees payable to government offices.

References