Is it possible to hire employees “casually” in Japan?

When you first start a business, you’re short-staffed.

You want to increase sales.

You have to handle customer service.

There’s administrative work to do, too.

In such situations, the first thing many foreign business owners think of is

“Let’s ask a friend to help out a little.”

This is a common approach.

Especially within foreign communities,

• it’s not uncommon for
• friends from the same country,
• international students,
• relatives,

or acquaintances

to help out with work.

However, in Japan, the idea of “asking for a little help” can sometimes be legally classified as employment.

As a result, this can lead to unexpected problems.

“It’s not a part-time job, so it’s fine” is a dangerous mindset

A phrase we often hear from foreign business owners is:

“They’re not official employees.”

For example:

Helping out only during busy times

• Paying in cash
• Working only a few hours
• Not having a written contract
• In such cases,

people often think:

“It’s not a part-time job”

“It’s not employment”

However,

However, in Japan, the situation is judged based on the actual circumstances, not the title.

If you repeatedly work under the company’s instructions

and receive money in exchange,

you may be treated as an employee.

“It’s okay because we’re friends” doesn’t hold up

When friends work together,

they sometimes don’t draw up a contract because they trust each other.

However, many disputes arise precisely between people who have a relationship of trust.

For example:

• The pay is different from what was promised
• Long working hours
• Unable to take time off
• suddenly quitting
• being suddenly fired

and so on.

Even if you get along well at first, differences in perception can arise once work and money are involved.

If there is no contract at that point, both parties will face difficulties.

“It’s okay because they’re international students” is dangerous

Extra caution is needed within the foreign community.

For example,

there are cases where someone says,

“Since they’re an international student from the same country, I’ll just have them help out on weekends.”

However, international students have restrictions on their working hours.

Even if the student says,

“It’s okay,”

or “No problem,”

the employer is ultimately held responsible.

You cannot get away with saying you didn’t know.

When hiring a foreign national, it is important to verify their residency status and work restrictions.

Rules Apply Even in Family-Run Businesses

In family-run businesses,

• spouses
• children
• and relatives

may assist with the business.

However, if you are paying them a salary or they are actually performing work duties, you may need to consider enrolling them in social insurance and labor insurance.

Instead of thinking, “It doesn’t matter because they’re family,”

it is important to

verify the nature of their work arrangement.

The real problems begin when an accident occurs

The biggest problem is that

“you can’t see the issues until something happens.”

For example,

a friend helping out at a restaurant slips and falls,

someone gets injured while carrying supplies,

or an accident occurs at a construction site.

In such cases,

the explanation that “they aren’t official employees”

may not hold up.

It is only after an accident occurs that issues such as

• employee status
• workers’ compensation insurance
• duty of care

come to the surface.

Why are foreign business owners prone to this misunderstanding?

One reason is the difference in systems compared to their home countries.

In some countries,

• family-run businesses are common
• working based on verbal agreements is the norm
• and cash payments are the mainstream.

However, in Japan,

there are many rules governing

the act of “employing people.”

Therefore,

Consequently, practices that were acceptable in their home countries may become problematic in Japan.

The Correct Mindset

If you are conducting business in Japan,

rather than thinking,

“This person is not a formal employee,”

it is important to consider,

“How might this person be treated under the law?”

Even if they are a friend,

a relative,

or a fellow countryman,

if they are actually working and receiving payment, you must verify the rules regarding employment.

Summary

For foreign business owners, it is natural to rely on friends and acquaintances when facing a labor shortage.

However, in Japan, what might feel like “just asking for a little help” can be legally classified as employment.

To prevent problems later on,

• it is important to:
• Clarify the terms of the contract
• Verify their status of residence

Understand labor regulations

As a company grows, the risks associated with hiring people also increase.

That is precisely why “casual hiring” requires the most careful consideration.

Next time, we will explain what you need to prepare when hiring your first employee in Japan.