Quick Guidance for Employment Adjustment Subsidy

Quick Guidance for Employment Adjustment Subsidy

Source : Miyuki Tsuboi - Certified Social Insurance & Labor Specialist at HR Advisory Services

An Employment Adjustment Subsidy ("Koyouchousei-jyoseikin") is provided for an employer, who has been forced to reduce business activities due to the effects of Covid-19 and temporarily suspended work, or who has trained or dispatched employees in order to maintain their employment, for some of the leave allowance paid to employees.

The term “to reduce business activities" means that the production index for the latest month has decreased by more than 5% compared to the same period last year.  Details can be obtained through consultation via the Subsidy window at a local office of Ministry of Health, Labor, and Welfare (MHLW).


If you wish to apply for the Subsidy, please answer the Questions regarding the Subsidy:

  1. When will you suspend your business?
  2. When did you start your business?
  3. Which of the following describes your business type? 
    - Manufacturing / Construction / Transportation
    - Wholesale
    - Service
    - Retail
  4. What is the amount of capital or total investment, and the number of employees?
  5. How did Covid-19 impact you to be forced to reduce your business activities?

For example, the department store where the branch shop opened was closed.

The following materials are required to simulate the amount of the Subsidy:

  1. Number of employees and capital of the company (to determine if it is a small/mid-sized company or a large company);
  2. A copy of the Declaration of Labor Insurance Contributions filed with the Labor Bureau in July 2019;
  3. Breakdown of 1. above: The total wages of all employees and the number of employees in each month from April 2018 to March 2019; the total wages of employees enrolled in employment insurance in each month; and a list showing the number of employees who have enrolled in employment insurance for each month);
  4. Specified working days from April 1, 2018 to March 31, 2019 (calendar days minus company holidays)
    Company holidays include Saturdays, Sundays, national holidays, and company holidays (summer vacation / New Year holidays, etc.);
  5. Schedule for each employee's leave of absence dates in the month. (please provide a list, if possible)

To apply for the Subsidy, the following conditions must be met at minimum:

  1. You must have labor insurance (including employment insurance);
  2. During the leave of absence period (the period during which an employee is absent at the company's request), you must pay the employee at least 60% of the normal salary;
  3. Regarding working conditions during the leave of absence period, the company and employee representative must conclude a Leave Allowance Agreement (Labor Management Agreement on Leave of Absence);

    It should be noted that since this Leave Allowance Agreement is important material to determine the Subsidy, sufficient attention must be paid to its contents.
  4. If there is a labor union, the Employee Representative will be the secretary-general of the labor union. If there is no labor union, it is necessary to select an employee (who is not a manager) to represent the majority of all employees (including part-time employees). Notification of election is required


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