WORK

Avoid Salary Cut in Japan

Charley
Charley
My employer reduced my salary from this month due to financial difficulty during pandemic. Do I have to Accept it?
Atsuro
Atsuro
No. You have a right to refuse it.

In principle, employers cannot change labor conditions unilaterally. In other words, companies need to obtain a voluntary consent from their employees to reduce salary. So if you don’t want to accept the reduction, just refuse it clearly.

And even if you once gave a consent to the reduction, you are still able to argue the validity of reduction by insisting that the consent was forced and not made voluntarily. If companies implied that you would get fired or put you in difficult situation unless you agree to the reduction, your consent will never be voluntary one.

Change of Rules of Employment

Instead of obtaining consent from employees, it is possible for employers to reduce salaries of their staffs by changing the rules of employment.

However, such change will be valid only if it is reasonable considering the necessity of the change and the amount of disadvantage employees would face. Since salary is very important working conditions, it is only limited case where such change is considered valid. 

If  you are infected with COVID-19

When an employer orders an employee to take sick leave because he or she is infected with COVID-19 and the governor restricts him or her from working, the employer does not need to pay allowance for absence. However, if you are holder of Employees’ Health Insurance, you may be able to receive Invalidity Benefit.

On the other hand, when an employer considers that an employee might be infected and order him or her to stay home just to be on the safe side, the employer needs to pay allowance for absence to the employee. Employer cannot regard this as paid holidays, because employees have rights to decide when to take paid holidays.

When your company temporally close some part of business

During pandemic, some companies unwillingly decide to close some part of their business for a while because of less customers or for the purpose of infection prevention and request their employees to take days off.

In such case employees can get allowance for absence as long as the closure of business is attributable to the employer (article 26 of Labor Standard Act).  Although COVID-19 is not employer’s fault, employers still have option to close or continue its business in most cases. So it can be said such closure is attributable to the employer and employees are entitled to a allowance for absence.

The Principle of full salary payment

Charley
Charley
My company deducts 1000 yen from my salary for coffee we can freely drink at office. Is this OK?
Atsuro
Atsuro
Unless it is described in the labor management agreement, it’s illegal.

Can employers freely deduct some expense from employees?

Answer is No.

Employers may withhold taxes, pension and social insurance premiums(health insurance and unemployment insurance), but they are not allowed to deduct other expenses from your salary unless a labor-management agreement has been concluded with the labor union or a representative of the majority of workers.

 

How to avoid salary reduction

As explained above, employers need to pay full amount of salaries or allowance for absence even in this difficult situation. Therefore, except under some special circumstances, they cannot reduce employee’s salaries without obtaining consent from them.

So if you are asked to accept reduction of salary by your employer, don’t hesitate to say “No!”