My company has been hit hard by diplomatic friction with China. I heard that the financial situation got worse because of this. Suddenly, the company told all employees to take unpaid leave for one month. If I do not have a salary for a month, my life will be difficult because there is no other source of income. What can I do?

Article 46 of the Labor Standards Act stipulates that when a business shuts down due to a cause attributable to the employer, he/she shall pay the workers concerned allowances of not less than 70 percent of their average wages during the period of shutdown. This is called shutdown allowance. If the average wage of 70% exceeds the ordinary wage, the ordinary wage can be paid as a shutdown allowance. It is a policy to protect workers from the risk of losing wages if they cannot work because of the reasons other than the responsibility of the workers. However, this applies only to business or workplace with 5 or more employees at all times.

Here, the causes attributable to the employer are, in principle, management disabilities that occur within the scope of the employer’s power. This means the business shut down due to a shortage of funds, shortage of raw materials, a decrease of order quantity, market recession and reduction of production, and reduction of operation caused by partner companies’ shortage of materials and financial difficulties by due to parent company’s financial difficulty.

Like this case, a shutdown of the business for a month due to sales stagnation or financial difficulties is generally judged as causes attributable to the employer, so 70% of the average wage can be paid as a shutdown allowance.