Photo/Illutration A copy of an application form that a company submitted to a labor bureau to falsely apply for COVID-19 employment adjustment subsidies (Asahi Shimbun file photo)

A total of 920 companies have illegally received the central government’s COVID-19 employment adjustment subsidies as of late September, totaling 13.5 billion yen ($90.8 million), The Asahi Shimbun has learned.

The labor ministry expanded its employment adjustment subsidies in fiscal 2020 in response to the pandemic. 

The ministry calculated the amount that companies have received illegally since then, including the subsidies that supplement the leave allowance for temporary workers who are not covered by employment insurance.

The ministry reported that the total is 13.5 billion yen, of which 10.2 billion yen has been recovered.

The ministry said it is continuing to seek recovery of the rest of the payouts.

In a previous survey, the amount was 9.3 billion yen as of the end of June.

Companies eligible to receive the subsidies are ones that have lost a certain amount of sales.

By supplementing leave allowances for employees, the ministry hopes to prevent layoffs.

But after the ministry's labor bureau in each prefecture conducted on-site inspections at the companies that received subsidies, authorities found many falsely claiming they paid leave allowances to workers who were, in fact, working.

The Board of Audit of Japan in August also pointed out that about 100 million yen has been paid in duplicate to companies whose workers receive other types of subsidies such as one for absence from work.

As the ministry was afraid there would be more layoffs under the pandemic, it simplified the application process for such subsidies to make it easier for companies to apply for them.

It exempted companies from submitting a plan document for employees' leaves in advance.

It also decreased the number of application documents, hoping to shorten the period from application to payment, which typically takes about two months, to two weeks.

A ministry official said such efforts have also made it easier for people to commit fraudulent acts. 

The ministry also increased the maximum subsidies from about 8,000 yen to 8,999 yen per day per person to 15,000 yen.

The percentage of subsidies was also increased to 100 percent.

As a result, the number of applications jumped. About 7 million companies received a total of about 6 trillion yen.

At the same time, the labor officials were inundated with applications and were unable to check for false claims. 

(This article was written by Satoru Eguchi and Hiroki Hashimoto.)

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