To alleviate the financial burden of employers in light of the COVID-19 pandemic, the Japanese government has decided to subsidize certain employment related cost-reduction measures which may contribute to the avoidance of dismissals. In this Newsflash we describe the main measures for which employers may obtain governmental subsidies.
1: Business Suspension
Q 1.1: Are subsidies available for employers suspending their business due to Corona?
In case an employer suspends its business temporarily, the employer is in principle required to pay to the employees at minimum 60% of their average salary during the time of the business suspension (“Leave Allowance”) if the suspension is attributable to the employer. To cover a part of this Leave Allowance to be paid by the employer, the Japanese law offers employment adjustment subsidies (EAS). In order to be eligible, the conditions for the grant of EAS have been considerably eased in light of the COVID-19 crisis.
Q 1.2: What are the conditions for EAS?
The criteria for the grant of EAS depend on the time period of the business suspension. For business suspensions during the time period from 1 April 2020 to 30 June 2020, the following applies.
Main application criteria
Income decrease of applicant
Business suspension plan
1 year waiting period since last grant of employment adjustment subsidies
Maximum available period
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