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Leave payment and covid-19 in Japan

Leave payment and covid-19 in Japan

Leave Payment of 60 percent of the employee’s average salary is necessary

In the case an employer suspends his business that is attributable to him, he needs to pay his employees at least 60 percent of the employee’s average salary (it is called “Leave payment”) during the period of suspension of his business.
(Labor standard law article 26)

Assumed average daily salary 10,000 yen
He suspends his business for ten days.
In this case, he needs to pay at least 10,000 yen × 60% × 10 days = 60,000 yen to his employee.

Then he may be able to apply for subsidy for such leave payment.

In the case employer suspends his business based on government’s request, he may not need to pay leave payment

In the case an employer suspends his business that is attributable to employer, employer needs to pay at least 60% of salary to his employees.

However in the case a government requests employer to suspend his business, it is not obvious whether it is attributable to him or not.

So it is not obvious whether employer needs to pay Leave payment or not.

Actually in some kinds of business, Japanese government requested business operators to suspend their business.

As for this issue, Minister of health, Labor, welfare stated that “Even if a person suspends his business based on government’s request, I can not say it always erases employer’s liability”.

In announcement issued by Ministry of health, labor ( Q&A relating to Covid-19), you can find some information.

In the case Employer has fulfilled his best effort though (he can consider operation of his business by remote work etc.), if he still needs to suspend his business, it is not attributable to him. 

So employer does not need to pay leave payment.

When this information is well informed, a lot of employers will not pay leave payment to his employees.

The Ministry says even if employer does not need to pay leave payment legally, it is recommended that employer applies for subsidy and pays leave payment to his employees.

However in order to use this subsidy, employer needs to pay a part of leave payment and necessary process is very complicated.

So a lot of employer may hesitate to use this subsidy. 

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