Employer liability in Japan: hiring a foreign national without work authorisation

Companies operating in Japan tend to treat work authorisation as a yes-or-no question answered once, at the interview. In practice the exposure is broader than that, because the phrase unauthorised work covers three legally distinct situations, and only one of them is obvious.

The first is employing someone who holds no status of residence at all. The second is employing someone whose period of stay has expired but who remains in Japan. The third is employing someone who does hold a status of residence but who works beyond what that status permits. The third category is by far the most common in day-to-day business, and it is the one companies overlook.

According to National Police Agency figures for Reiwa 7 (2025), there were 253 cases and 308 individuals dealt with for the offence of promoting illegal employment. Of the 475 unlawfully employed foreign nationals involved, 169 were Vietnamese, 69 Thai and 63 Indonesian. What follows is the structure of employer liability, set out provision by provision.

Who exactly does Article 73-2 punish

Article 73-2 of the Immigration Control and Refugee Recognition Act punishes three categories of person: someone who, in connection with business activities, causes a foreign national to engage in unauthorised work; someone who places a foreign national under their control for that purpose; and someone who, as a business, acts as an intermediary in arranging such work. The penalty is imprisonment (kōkinkei) for up to five years or a fine of up to five million yen, or both.

The decisive point is that being the party to the employment contract is not what determines liability. In arrangements involving dispatch agencies, prime contractors and subcontractors, or service agreements, the person who in fact directed the work and had the individual perform it may be the subject of the offence. Structuring the paperwork so that another entity appears to be the employer does not by itself transfer the exposure.

The individual working without authorisation may also face separate prosecution. Article 70(1)(i) covers illegal entry and Article 70(1)(v) covers overstaying, each carrying imprisonment (kōkinkei) for up to three years or a fine of up to three million yen, or both.

Why saying that you did not know rarely works

Article 73-2(2) contains the provision that matters most in practice. To escape punishment on the ground of not having known that the work was unauthorised, the person concerned must show that the lack of knowledge was not attributable to negligence.

In an ordinary criminal case the prosecution must prove intent. Under this provision the employer instead has to produce material capable of showing that the checks a reasonable employer would make were actually made. Whether the following steps were taken is, in real cases, what separates a defensible position from an indefensible one.

• Was the residence card merely looked at, or was the IC chip read using the residence card reader application provided by the Immigration Services Agency
• Was the reading result recorded, together with the date it was carried out
• Was the residence card number checked against the published record of invalidated card numbers
• Was the existence and scope of any permission to engage in activity other than that permitted under the status of residence confirmed and documented, including hour limits
• Was the expiry date of the period of stay entered into a system that prompts a renewal check

Counterfeit cards are a genuine operational risk rather than a theoretical one. Of the 3,349 individuals dealt with for immigration offences in the National Police Agency’s Reiwa 7 figures, 191 related to possession of forged residence cards and similar conduct. Possession, provision and receipt of forged residence cards are themselves punishable under Articles 73-6 and 73-7.

For a foreign director, the consequences reach the residence status

This is the point that changes the whole risk assessment for foreign-owned companies, and it is regularly missed.

Article 24(iii)-4 lists a person who has engaged in conduct promoting illegal employment as a ground for deportation. That provision is satisfied by the conduct alone. It does not require a criminal conviction, or even a prosecution. A suspension of prosecution therefore does not close the matter: if the immigration authorities conclude, in the course of violation proceedings, that the conduct occurred, deportation proceedings may follow.

Where there is a conviction, Article 5(1)(iv) provides that a person sentenced to imprisonment (kōkinkei) of one year or more falls within the grounds for denial of landing. A case that would end with a criminal penalty for a Japanese director may, for a foreign director, determine whether they can remain in Japan and whether they can return in future.

Criminal proceedings and immigration proceedings run on separate tracks, but statements recorded during the criminal investigation are used as material in violation examinations and oral hearings. What is said in the police station in the first days shapes the immigration outcome months later.

What to do once an investigation begins

Investigations usually open with a request for voluntary production of documents, or with officers interviewing staff. Mistakes made at that stage are difficult to undo.

First, do not alter records. Tidying up attendance sheets or assembling copies of residence cards after the fact invites a suspicion of concealment of evidence, and it destroys the credibility of any later argument that the company was not negligent. Produce the documents as they are.

Second, keep internal fact-finding separate from what is said to the authorities. Understanding what happened is legitimate; anything that could be read as coordinating accounts among staff is not.

Third, if a director or employee is detained, note that Article 39(1) of the Code of Criminal Procedure guarantees the right to meet defence counsel. Even at a stage when the company cannot make contact directly, counsel may be able to confirm the person’s intentions and arrange necessary handovers. Article 198(2) requires that the right to silence be explained before questioning, and Article 198(4) provides that a written statement must be read back and that the person may request additions, deletions or changes before signing. Reading a statement carefully before signing is an exercise of a right, not an act of obstruction.

Three assumptions worth discarding

The first is that a student with permission for activity outside their status may work without regard to hours. The permission carries an hour limit, and hours worked for other employers count towards it. Monitoring only the shifts worked at your own company is not enough.

The second is that reliance on assurances is sufficient — the individual said it was fine, a relative or an agent vouched for them. Under Article 73-2(2), third-party assurances are weak evidence that the employer itself took reasonable steps.

The third is that once the company pays a fine, individuals are unaffected. The individual who committed the conduct may be prosecuted in their own right, and if that individual is a foreign national, a separate question about their residence status arises immediately.

How this firm works

At Funado International Law Office, Daisuke Matsumura attends detention centre visits and client meetings personally. For Chinese, the firm has a dedicated interpreter for foreign national cases on staff; for other languages, including English, interpreters are arranged according to the requirements of the case.

In matters involving the promotion of illegal employment, we do not treat a suspended sentence as a satisfactory outcome. The priority objective is a decision not to prosecute. Where the client is a foreign national, the criminal case and the immigration process are planned as a single matter, because the question whether the conduct amounts to a ground for deportation turns on intent and negligence, and that argument has to be built from the earliest stage of the criminal process rather than after judgment. The first consultation is free of charge. The firm can also be reached on WeChat at matsumura1119.

Closing note

Almost all of the risk in this area is governed by a procedure lasting a few minutes at the point of hiring: read the chip, record the result, diarise the expiry date. Embed those three steps as a standard operating procedure and the evidence you will need later accumulates on its own. This article sets out general information only; for advice on a specific matter, please consult a lawyer directly.

Author

Daisuke Matsumura, Attorney at Law
Daiichi Tokyo Bar Association (registration number: 59077, admitted 2019)
Funado International Law Office (Fuse Building Main Wing 3F, 3-4-10 Takada, Toshima-ku, Tokyo)
Practice focused on criminal defence for foreign nationals and immigration procedures, with clients predominantly of Chinese nationality. Results include an acquittal in a case under the Stimulants Control Act (possession for the purpose of profit), a decision not to prosecute in an organised fraud case, and the grant of special permission to stay in cases regarded as difficult.

Funado International Law Office
Website: https://matsumura-lawoffice.jp/
WeChat ID: matsumura1119

Japanese version of this article: https://matsumura-lawoffice.jp/blog/detail/2026099272/