1. Overview

In Japan, Human Resources Development Support Subsidy (人材開発支援助成金 / Jinzai Kaihatsu Shien Joseikin) is an employment-related subsidy administered through the Ministry of Health, Labour and Welfare (MHLW). It supports employers that provide workers with job-related vocational training and, depending on the course, subsidizes part of training expenses and wages during training.

An eligibility dispute generally arises when an employer claims that the statutory or administrative requirements for payment have been satisfied, while the Labour Bureau determines that one or more requirements were not met.

Important issues include:

• whether the training was actually carried out;
• whether the training was sufficiently connected with the employee's work;
• whether the employer actually bore the eligible training expenses;
• whether required plans or notifications were submitted in time;
• whether attendance and training records are accurate;
• whether the worker was an eligible employee;
• whether the training provider and employer have prohibited related-party relationships;
• whether the employer complied with wage-payment and other employment requirements;
• whether documents submitted with the claim are genuine; and
• whether an employer previously involved in improper receipt is excluded from further subsidies.

The current MHLW rules expressly provide for payment or non-payment decisions following examination of the application and supporting documents.

2. Legal Framework

The scheme operates principally through the Employment Insurance Act and related regulations, together with MHLW's subsidy guidelines and course-specific requirements.

The Human Resources Development Support Subsidy currently contains several courses, including:

1. Human Resources Development Support Course;
2. Education and Training Leave Grant Course;
3. Investment in People Promotion Course; and
4. Business Development/Reskilling Support Course. 

A crucial practical principle is that the version of the payment guidelines applicable at the relevant planning/notification stage matters. MHLW specifically maintains historical versions of the guidelines for this reason.

Therefore, an eligibility dispute cannot always be decided merely by looking at the current rules.

3. Main Categories of Eligibility Disputes

A. Training was not actually conducted

The subsidy is connected to actual vocational training. If an employer merely creates training schedules, attendance sheets or training diaries without conducting the training, the eligibility requirement is not satisfied.

This can move beyond an administrative eligibility dispute into criminal fraud where false documents are deliberately used to obtain public money.

B. Employer did not actually bear the training cost

The employer's actual financial burden can be decisive.

The Audit Board of Japan found cases in which employers did not bear the full training expense even though subsidy applications treated the expense as fully employer-funded. The MHLW subsequently required repayment and strengthened its examination procedures.

This is particularly important where:

• a training provider refunds money;
• a consultant gives a kickback;
• another group company actually bears the cost;
• the employer receives a financial benefit connected with the training; or
• the training is effectively provided free of charge.

C. Inadequate or inaccurate records

Training attendance, working hours, wages, training content and payment records may be examined.

A discrepancy between:

• attendance records,
• payroll records,
• training diaries,
• invoices,
• bank transfers, and
• the actual training schedule

can result in non-payment or repayment.

D. Related-party training

The relationship between the employer and training provider can become an eligibility issue.

Japan has tightened treatment of training supplied by companies closely connected with the applicant employer. Parliamentary discussions in 2026 also recorded that training provided by a parent/subsidiary or another closely related group company was being excluded under the revised system.

E. False application

Where an employer deliberately submits false information, the matter may be treated as improper receipt (不正受給) rather than an ordinary eligibility disagreement.

MHLW defines improper receipt as obtaining or attempting to obtain a subsidy through falsehood or other improper conduct. Responsibility can extend to representatives, employees, agents and persons involved in preparing the application.

4. Consequences of Ineligibility

Depending on the circumstances, consequences can include:

• refusal of the subsidy;
• cancellation of a previous payment decision;
• repayment;
• additional monetary amounts;
• interest/arrears;
• exclusion from employment-related subsidies for a prescribed period;
• publication of the employer's name in qualifying cases; and
• criminal liability where fraudulent conduct is established.

MHLW currently states that improper receipt can lead to repayment of the subsidy, an additional amount equivalent to 20% of the improperly received amount and other charges; a five-year restriction on receiving employment-related subsidies may also apply.

5. Important Case Laws and Related Judicial Decisions

Important qualification: Published judicial decisions specifically litigating ordinary Human Resources Development Support Subsidy eligibility are relatively limited. Therefore, the following cases include the directly relevant criminal case involving the HRD subsidy and closely related Japanese employment-subsidy decisions. They are useful for understanding how Japanese courts treat eligibility, evidence, subsidy conditions and misuse of employment subsidies.

Case 1 — Okayama District Court, 14 February 2022

岡山地方裁判所 令和4年2月14日判決

This is one of the most directly relevant cases.

A social insurance and labour consultant and company-side persons were involved in obtaining Human Resources Development Support Subsidy money despite the relevant training not actually being conducted. False training diaries and related documents were prepared and submitted.

Approximately ¥624,520 was obtained through the HRD subsidy component.

The same group also submitted false applications for Employment Adjustment Subsidy, making the overall fraudulent scheme considerably larger.

The court imposed a three-year imprisonment sentence suspended for four years on the relevant defendant. The judgment considered the coordinated preparation of false documents and the defendant's professional role in the scheme.

Principle:
A subsidy application is not protected merely because an employer uses a professional consultant or social insurance and labour consultant. Where the underlying training did not occur, false records can transform an eligibility dispute into criminal fraud.

Case 2 — Mito District Court, 10 March 2026

水戸地方裁判所 令和8年3月10日判決

Although this case concerned Employment Adjustment Subsidy rather than HRD Subsidy, it demonstrates the seriousness with which Japanese courts treat false employment-subsidy applications.

The former president of Mito Keisei Department Store was convicted in connection with approximately ¥670 million in Employment Adjustment Subsidy obtained through inflated claims concerning employee leave. The court imposed a four-year imprisonment sentence.

Principle:
Where eligibility-related facts are deliberately falsified, the issue is no longer simply whether the applicant interpreted a subsidy rule incorrectly. Deliberate falsification can result in criminal liability.

Case 3 — Tsu District Court, 16 July 2025

津地方裁判所 令和7年7月16日判決

A social insurance and labour consultant and a company representative were involved in a scheme concerning Employment Adjustment Subsidy and Emergency Employment Stabilization Subsidy.

False employment records and subsidy applications were prepared and submitted. The court imposed two years' imprisonment, suspended for four years on the consultant. The decision took account of the consultant's role in preparing and submitting the false applications and the subsequent repayment and other circumstances.

Principle:
The person preparing or submitting subsidy documents can have substantial legal responsibility. An employer cannot automatically transfer responsibility to its consultant.

Case 4 — Tokyo District Court, 14 June 2017

東京地方裁判所 2017年6月14日判決

This case concerned the former Small and Medium Enterprise Emergency Employment Stabilization Subsidy, an earlier employment subsidy.

The defendant was found to have submitted false applications despite not satisfying the requirements and obtained approximately ¥47 million.

The court imposed a two-year-eight-month imprisonment sentence, together with a fine against the company for tax-related violations.

Principle:
Eligibility conditions for employment subsidies are substantive requirements. Deliberately creating the appearance that those requirements have been met does not create eligibility.

Case 5 — Tokyo District Court, 29 May 2023 — Carnival Japan

東京地方裁判所 令和5年5月29日判決

This was not an HRD-subsidy eligibility case, but it is relevant to the judicial treatment of employment subsidies.

During COVID-19, an employer carried out restructuring dismissals without relying on the Employment Adjustment Subsidy.

The court examined whether the employer should have used the subsidy as part of its obligation to avoid dismissals. It considered the actual economic benefit that could have been obtained, the applicable subsidy limits and the employer's financial circumstances. The court ultimately held that non-use of the subsidy did not, in the circumstances, establish inadequate dismissal-avoidance efforts.

Principle:
A subsidy cannot automatically be treated as available or sufficient merely because the employer theoretically qualifies. Courts may examine the actual conditions, timing, amount and practical availability of the subsidy.

Case 6 — Isuzu Motors Temporary Employee Case, Tokyo High Court, 26 March 2015

いすゞ自動車（雇止め）事件 — 東京高判平成27年3月26日

This case concerned the non-renewal of temporary employees and the employer's efforts to avoid termination.

The employees argued, among other things, that the employer had not sufficiently considered measures including the use of the Employment Adjustment Subsidy.

The Tokyo High Court held that the employer could not automatically be said to have failed its avoidance efforts merely because every measure proposed by the employees—including consideration of the subsidy system—had not been taken.

Principle:
The mere theoretical availability of an employment subsidy does not automatically establish that an employer was legally required to use it. The surrounding circumstances and practical feasibility matter.

Case 7 — Sheetech Case, Yokohama District Court, 29 March 2012

シーテック事件 — 横浜地判平成24年3月29日

This case involved termination of a dispatched employee during an economic downturn.

The court considered the employer's financial circumstances and noted the fact that payment of Employment Adjustment Subsidy would have occurred only after a delay. The subsidy therefore formed part of the factual assessment of the employer's financial position rather than automatically determining the legality of the termination.

Principle:
When assessing subsidy eligibility or its legal significance, courts may consider timing, cash flow and practical availability, rather than treating the nominal subsidy amount as immediately available money.

6. What These Cases Mean for HRD Grant Eligibility Disputes

The cases collectively demonstrate several important principles.

7. Employer's Burden of Compliance

For an employer claiming the Human Resources Development Support Subsidy, the safest compliance structure is to maintain a complete documentary chain:

Training plan → approval/notification → employee eligibility → actual attendance → training content → instructor/provider → invoice → employer payment → payroll/wage evidence → completion records → subsidy application

Any unexplained gap can become an issue during Labour Bureau examination.

MHLW's current materials expressly contemplate examination of the application against the applicable payment requirements and provide for either a payment decision or a non-payment decision.

8. Improper Receipt vs. Genuine Eligibility Dispute

This distinction is particularly important.

Genuine eligibility dispute

Example:

Employer believes a particular training course satisfies the requirements, but the Labour Bureau interprets the relevant requirement differently.

This is primarily an administrative eligibility question.

Improper receipt

Example:

Employer knows that training was not conducted but creates a false training diary and submits it as proof.

This is fundamentally different because the issue becomes intentional deception, potentially involving criminal fraud. The Okayama District Court case illustrates this distinction directly.

9. Recent Compliance Development

The issue has become particularly significant because Japan has strengthened scrutiny of HRD subsidies.

The Audit Board identified improper payments where employers had not actually borne all training costs. MHLW subsequently revised its rules and examination procedures to identify situations where training providers return money to employers or otherwise create a situation in which the employer did not genuinely bear the training expense.

MHLW's current guidance also emphasizes that training expenses are not automatically free to the employer merely because a subsidy is available.

10. Conclusion

Human Resource Development Grant eligibility disputes in Japan are primarily determined by the precise subsidy course, the applicable version of the MHLW payment guidelines, the actual implementation of training, the employer's genuine financial burden, and the accuracy of supporting documentation.

The most important legal distinction is between an honest disagreement about whether a requirement has been satisfied and deliberate falsification designed to create artificial eligibility. The former is ordinarily an administrative subsidy dispute; the latter can result in repayment, exclusion from future subsidies, publication and criminal prosecution.

The Okayama District Court decision of 14 February 2022 is particularly significant because it directly involved the Human Resources Development Support Subsidy and demonstrated that fabricated training records can lead to criminal fraud liability.

MHLW's current rules also demonstrate that eligibility is highly documentation-dependent and that the applicable historical payment guidelines should be examined according to the relevant application/planning period.