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Balancing Home Office with Office Work

Although the state of emergency has been lifted for the entire territory of Japan on 25 May 2020, the health risks related to COVID-19 persist, and many companies have chosen to continue teleworking (or working from home, “home office”) in one way or another. In this Newsflash we discuss some legal questions resulting from these changes at the workplace and the consequences for employer and employees.

1: Home Office
Q 1.1: Is an employer granting commutation allowance to its employees entitled to stop the payment thereof, if employees are working from home, or to reduce the amount of the allowance? Has the employer a right to request a refund of already paid commutation allowance to home office employees?

  • The payment of a commutation allowance is not mandatory under the Labor Standards Act and a respective payment obligation arises only when such obligation is explicitly stipulated in the employment rules or in the employment agreement(s) of the employee(s) concerned.Often, employment rules stipulate that a commutation allowance is paid to cover the actual costs incurred for commutation to the workplace, subject to submission of respective evidence (e.g. a copy of the commuting pass, etc.). In such case, it is principally feasible to stop payment for periods during which employees are ordered to work entirely from home, because actual commuting expenses do not incur.On the other hand, if employees work only partially from home, and commute to the company on certain days, the employer needs to continue paying the monthly commuting allowance with respect to already purchased commuting passes (since such passes usually are not refunded by the transportation companies in case of usage during several days of a month only). However, if the employer instructs the employees not to purchase commuting passes in the future, but only to use one-time tickets, it is feasible to reduce the monthly commutation allowance to the actual commutation expenses incurred for the days on which the employee actually commutes to the work place.
  • A refund obligation of employees to return their already paid commutation allowance to the company will most likely not be legally enforceable if contested by the employees, unless a refund obligation has been explicitly stipulated in the employment rules or employment contract in the event certain conditions for receiving such allowance (e.g. submission of evidence) are not met.


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