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01. Hiring Practices

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Japan

01. Hiring Practices

Requirement for Foreign Employees to Work

Foreign employees who wish to apply for a long-term visa should first obtain a Certificate of Eligibility (‘COE’). A COE is a document issued by the Ministry of Justice in Japan. In order to obtain the COE, a sponsor in Japan is required. Sponsors can be employers, schools or relatives. The sponsor in Japan must contact the appropriate local immigration office in order to apply for the COE. Once the COE has been issued, the foreign employee is then able to apply for a visa before the Japanese embassy or consulate in the country where the foreign employee resides. The COE should be submitted to an immigration inspector with a valid visa for landing permission at the port of entry, within three months from the date of issue. Once living in Japan, the foreign employee must notify the local city ward office of his/her place of residence.

Long-term visas can be provided for any type of work visa designated by Japanese law, for which the permitted standard period of stay in Japan is five years, three years, one year, or three months. A foreign employee who is currently working for an organisation outside Japan and will subsequently be transferred to that organisation’s Japanese office for a limited period, may be eligible for a work visa as an intra-company transferee. Requirements for obtaining an intra-company transferee visa are as follows: (i) the two entities have a certain capital relationship; (ii) the employee has been engaged in activities which is covered by “engineer” or “humanity, international service” in that foreign company for at least one year immediately before transfer to Japan; and (iii) the employee will receive a salary after transfer to Japan at the same level or more than that of which a Japanese national would receive by engaging in the same type of work. A foreign employee who does not fall under these categories may be eligible for other types of work visas if the foreign employee has a direct contract with the relevant entity in Japan.

A foreign employee is prohibited from engaging in activity outside the scope permitted in their work visa. However, performing activities outside the scope of their work visa is permissible subject to approval granted by the Minister of Justice.

Does a Foreign Employer need to Establish or Work through a Local Entity to Hire an Employee?

A foreign employer does not need to work through a local entity in order to hire an employee in Japan, as far as the service engaged by the representative office to which the employee belongs, is limited to certain preparatory and auxiliary activities (e.g. market survey, information gathering, purchase of goods and advertisements). The representative office conducting the preparatory and auxiliary activities for a foreign employer would, in general, not be considered as a permanent establishment. On the other hand, if a foreign employer commences any direct business or operation, which could be subject to taxation in Japan (e.g. contract execution or sales activities), the foreign employer would need to establish a local entity. Otherwise, the representative office would likely be considered as a permanent establishment. Regardless of whether or not a local entity is established in Japan, a foreign employer is obliged to provide its employees, hired and working in Japan, with social insurance and employment insurance.

Limitations on Background Checks

There is no statutory limitation on background checks in Japan. However, due to the sensitive nature of data gathered, certain information requires careful handling. The Act on the Protection of Personal Information (2003) provides that sensitive personal information such as race, creed, social status, medical history, criminal record, and the fact of having suffered damage by a crime must not be collected, in principle, unless an applicant’s consent is obtained. Furthermore, the guidelines based on the Employment Security Act provide that an employer is prohibited from acquiring information which may become a cause for social discrimination. This includes, but is not limited to, information pertaining to race, ethnic group, social status, family origin, domicile or birthplace, creed, personal beliefs, or history of union membership. In practice, for the purpose of lawfully searching an individual’s background, informed consent from each individual employee or prospective employee, and specifying the purpose of and the items subject to said background check, is typically utilised. It is also common practice to ask for a declaration of criminal records and to require a medical examination. This sensitive information shall be collected in a socially acceptable manner and securely retained.

Restrictions on Application/Interview Questions

The guidelines advise that an employer should refrain from asking questions of an applicant or requesting information which would lead to social discrimination, including, but not limited to, the following :

  • domicile of origin and/or birthplace;
  • family members’ circumstances, such as their job, relationship, health, social status, education, income and assets;
  • housing situation, such as layout of rooms, number of rooms, type of housing and neighborhood facilities;
  • life and home environment;
  • religion;
  • political party support;
  • philosophy and personal creed (e.g. beliefs and values that govern one’s life);
  • person to respect;
  • personal beliefs;
  • union membership or activities, student movements or social movements; and
  • preferred newspapers, magazine and books.
Any questions

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