As part of the ongoing drive to raise wages, especially the minimum wage, throughout Japan, the MHLW has announced additional subsidies to assist employers in making these important changes and improvements. All employers should be aware. MHLW announces additional wage and business improvement subsidies.
At Verse, it is perhaps our most important support service to our clients. Thus we welcome this publication and promotion of Model Work Rules. Every employer must establish work rules that can seem complex, even for Japanese companies, and must of course be handled in Japanese. As with all social welfare and labor law matters in Japan, please seek out professional Sharoushi (Certified Labour Law and Social Insurance Attorney) support to ensure you and your company remain in compliance.
The MHLW states that:
This subsidy is a system that subsidizes a part of the investment costs when small and medium-sized enterprises, small businesses, etc. raise the lowest wage (minimum wage in the business site) of 30 yen or more, and makes capital investment, etc.
The following have been revised and will be implemented from December 12.
1 Increase the maximum amount of the grant
→ Increase the subsidy limit for businesses with less than 30 business units
2 Expansion of subsidies
→ Expansion of subsidies for special business operators (Note)
3 Expansion of target business sites
→ The requirement to be less than 100 people on the scale of the workplace will be abolished.
4 Extension of application deadline
→ Extended until March 31, 2020
- For businesses with a business site size of less than 30 people, the maximum amount of the subsidy will be increased.
- The category of 10 people or more is only applicable to businesses that meet certain requirements.
Special business operators whose subsidies are expanded will also allow expenses related to capital investment, which contributes to productivity improvement.
(1) Due to the impact of the new coronavirus infection, the monthly average of the indicators indicating business activities such as sales and production volume in the last three months decreased by more than 15% compared to the same month in the previous year, the previous year, and the previous year.
(2) Businesses whose profit margin for any one month during the three months prior to the application decreased by more than the same month of the previous year due to external factors such as changes in the social and economic environment such as soaring raw material costs.
What are the related expenses?
Expenses (B) (= related expenses) related to capital investments (A) recorded in the business improvement plan, etc., which contribute to productivity improvement, are also newly subsidised.
※Subsidies to “related expenses” are limited to the extent that they do not surpass the amount of capital investment, etc. that contributes to productivity improvement.
- We will abolish the requirement to increase the size of the business site to less than 100 people.
- Small and medium-sized enterprises and small businesses with more than 101 business sites can also apply.
Among general business operators (small and medium-sized enterprises that have set up a business site in Japan, and the difference between the minimum wage in the workplace and the minimum wage by the region is within 30 yen), it refers to the business sites that fall under any of the following (1), (2), or (3).
(1) Business sites with a minimum wage of less than 920 yen
(2) Businesses whose monthly average value for the last three months of indicators indicating business activities such as sales and production volume has decreased by more than 15% compared to the same month in the previous year, the previous year, or three years ago.
(3) Businesses whose profit margin for any one month of the three months decreased by more than 3% due to external factors such as changes in the social and economic environment such as soaring raw material costs
In addition, if it falls under (2) or (3) above, the subsidy expenses will be expanded, and as expenses related to capital investment that contribute to productivity improvement, advertising expenses recorded in the business improvement plan, general-purpose office equipment, expansion of offices, expansion of desks and chairs, etc. Expenses are also subsidized (limited to the extent that the amount of capital investment, etc. that contributes to productivity improvement, etc. is not exceeded).
Full details of the latest subsidy announcements, in Japanese, are available here:
Here, you can find past announcements of the special subsidies.https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/koyou_roudou/roudoukijun/zigyonushi/shienjigyou/03.html
MHLW announces additional wage and business improvement subsidies