March 25, 2020 SPECIAL COVID-19 ISSUE

JAPAN - Report

By: Yumiko Ohta, Orrick, Herrington & Sutcliffe (Japan)

The Ministry of Health, Labour and Welfare issued a Q&A with respect to the COVID-19 virus workplace contamination on February 7th, 2020, and the Q&A has been updated frequently. Currently, the country’s main objective is to delay the widespread transmission of the COVID-19 virus and minimize the number of critically ill patients and death. Some specific measures based on that Q&A are:

  • Companies must ensure that sick employees do not report to work and must take measures to keep employees away from congested public transportation and gatherings by using remote working, shifting work hours, and allowing employees to take annual paid vacation to the extent possible.
  • Due to closure of public elementary schools, junior high schools, and high schools, many employees have become unable to work because they must look after their children. The government is providing subsidies to companies which gave special paid vacation days to those employees by covering the full base salary with a cap of JPY 8,330 per day for the period from February 27 to March 31.  At this moment, each school will have an option to decide to open school from the new school year starting in early April.
  • If companies suspend the entire staff or certain employees, companies must pay employees the statutory leave allowance at a rate of 60% or more of base salary during suspension, unless such circumstances are considered force majeure. The government interprets force majeure very narrowly and temporary suspension of business is generally considered not force majeure.  Thus, it is strongly recommended that companies pay the statutory suspension allowances. Companies which have paid the statutory suspension allowances can receive subsidies of up to two thirds of the paid statutory suspension allowances with a cap of JPY 8,330 per day for up to 100 days.

Yumiko Ohta

Orrick, Herrington & Sutcliffe (Japan)