Useful Info

In cases where a company goes bankrupt, resulting in workers who have resigned without receiving wages, shutdown allowances, or severance pay, the state pays, on behalf of the employer, from the Wage Claim Guarantee Fund: three months' worth of wages or shutdown allowances, and three years' worth of severance pay. Even if the company has gone bankrupt and the employer lacks the ability to pay wages, or even if they have some ability but workers must go through cumbersome procedures such as court auction processes to receive wages, the wage guarantee payment system was introduced to allow workers to quickly secure their wage claims and alleviate their living difficulties. To receive wage guarantee payments, the company must have gone bankrupt, which includes court-determined bankruptcy (bankruptcy declaration under the Bankruptcy Act, commencement of rehabilitation under the Rehabilitation Act, or commencement of corporate reorganization under the Corporate Reorganization Act) and de facto bankruptcy. De facto bankruptcy is recognized only in workplaces with 300 or fewer regular employees, and it refers to cases where the business has been closed or is in the process of closing due to the employer's deteriorating management, lacks the ability to pay wages, severance pay, etc., or is in a significantly difficult state, and has received 'confirmation of bankruptcy facts, etc.' from the competent Employment and Labor Ministry office. To obtain confirmation of bankruptcy facts, etc., from the Employment and Labor Ministry, a confirmation application must be submitted to the local labor office with jurisdiction over the company's address within one year from the day after resignation. Additionally, for receiving wage guarantee payments, the timing of the worker's resignation is also important: resignation must occur from workplaces that went bankrupt within three years after the date one year before the severance base date. The severance base date is: ① the application date if there is a bankruptcy declaration, rehabilitation commencement decision, or corporate reorganization commencement decision; ② the application date or declaration date if, after an application for rehabilitation commencement under the Rehabilitation Act or for corporate reorganization commencement under the Corporate Reorganization Act, the court declares bankruptcy ex officio; ③ the date of application for confirmation of bankruptcy facts, etc.