Is it okay to use only English employment contracts?

Among foreign business owners running companies in Japan,

“I can’t read Japanese,”

“My employees are also foreign nationals, so Japanese isn’t necessary,”

are common reasons why many consider drafting employment contracts in English only.

In fact, there are numerous templates for English employment contracts available online.

So, is it okay to use employment contracts written entirely in English in Japan?

To put it simply,

using an English-language contract is not prohibited in and of itself.

However, that alone is not sufficient.

English-language contracts are legally valid

Under Japanese law, there is no provision requiring employment contracts to be written exclusively in Japanese.

Therefore,

• it is possible to draft contracts in
• English
• Chinese
• Vietnamese or other languages

In other words,

a contract is not invalid simply because it is in English.

However, the content that must be included is determined by law

What you need to pay attention to here is not the language of the contract, but

what must be explicitly stated

In Japan, the law specifies the terms and conditions of employment that an employer must disclose when hiring a worker.

Broadly speaking, these are divided into:

• Items that must always be disclosed
• Items that must be disclosed if the relevant system applies
• Items that must be provided in writing

In other words, while it is possible to draft a contract in English, this does not mean that required terms of employment can be omitted.

What Are Absolute Disclosure Requirements?

First, there are items that must be disclosed without exception.

These are generally referred to as “absolute disclosure requirements.”

For example:

• The term of the employment contract
• The place of work and job duties
• Start and end times, and break times
• Days off
• Wages
• Matters related to resignation

and so on.

These are extremely important conditions for hiring employees.

Even when foreign business owners draft employment contracts in English, they must ensure these details are properly included.

What Are Relative Mandatory Provisions?

Next, there are provisions that must be specified if the company has the corresponding policies in place.

These are called “relative mandatory provisions.”

For example:

• Retirement benefit plans
• Bonuses
• Temporary wage payments
• Matters related to leave of absence

and so on.

If the company does not have these systems in place, there is no need to include them.

However, if the company does have such systems, they must be explicitly stated.

There are also items that must be provided in writing

Furthermore, there are certain items that must not only be explicitly stated but also provided in writing.

For example,

As a general rule, important terms and conditions of employment, such as those listed above, must be specified in writing.

Therefore, you canNOT simply say, “It’s okay because I explained it verbally.”

Even if you explain them in English, it is important to document the necessary details in writing.

The key is “understanding the content.”

The most important aspect of an employment contract is that the employee begins working only after fully understanding the terms of the contract.

For example,

• Salary
• Working hours
• Days off
• Job Description
• Contract Term
• Rules Regarding Resignation

If there are any misunderstandings regarding these points, it could lead to problems later on.

Whether the contract is in English or Japanese, it is meaningless if both parties do not understand the contents.

What About Hiring Japanese Employees?

You may also hire Japanese employees.

In that case, a contract written solely in English is not sufficient.

If you present an English-only contract to an employee who can only read Japanese, they may sign it without fully understanding the contents.

This is not a desirable situation for either the company or the employee.

English Isn’t Necessarily the Best Choice for Foreign Employees Either

It’s not necessarily the case that English alone is sufficient for foreign employees.

• English is not their native language
• They may understand Japanese better than English
• They may find explanations in their native language easier to understand

Some people feel this way.

Just because someone is a foreigner doesn’t mean English is the best choice.

It’s important to choose a language that the person you’re hiring can easily understand.

In practice, “Japanese + English” offers the greatest peace of mind

For foreign business owners, we recommend contracts written in both Japanese and English.

Furthermore, having a Japanese version makes it easier to verify the contents when consulting with professionals such as certified social insurance and labor consultants, administrative scriveners, or attorneys.

This approach remains useful even as the company grows and the number of Japanese employees increases.

Translations into English must be handled with care

When creating an English version, special attention must be paid to the translation.

Japanese labor law has unique systems.

For example, these include concepts specific to Japan.

• Prescribed working hours
• Statutory holidays
• Annual paid leave
• Overtime pay
• Procedures regarding resignation

Therefore, a literal translation may not convey the correct meaning.

Furthermore, if you use an overseas employment contract as-is, it may contain provisions that do not align with the Japanese system.

When creating an English version, it is important to do so with a thorough understanding of the Japanese system.

Precisely because you are a business owner holding a Business Manager visa

Foreign nationals running a company under the Business Manager status of residence may, in the future, hire a diverse range of employees.

• Japanese nationals
• Foreign nationals
• English speakers
• Non-English-speaking foreign nationals

and others,

Therefore, rather than adopting an “English only” or “Japanese only” approach, establishing a system that allows for appropriate explanations tailored to each individual will help build trust in the company.

Particularly when hiring full-time employees is crucial, ensuring that employment contracts and notices of working conditions are properly drafted serves as important documentation demonstrating that the company is hiring employees appropriately.

Summary

In Japan, there is no problem with using English-language employment contracts per se.

However, what is truly important is

clearly stating the working conditions required by law and ensuring that employees correctly understand their contents.

The most practical approach for foreign business owners is to prepare contracts written in both Japanese and English and to enter into the contract only after fully explaining the contents.

This is not merely a matter of document preparation.

It is also the first step toward creating an environment where the company and employees understand each other and can work with peace of mind.