Pitfalls in the case of hiring foreign workers as seen in the referral to prosecutors of Nakamuraya ~ Crime of promoting illegal employment and activities outside one’s status of residence~

HR Management


Author: Masatoshi Tanaka, Attorney at Law and Patent Attorney

In December 2021, Nakamuraya, a long-standing shop famous for curry and Japanese sweets, and its employees were referred to the prosecutors on the suspicion of violation of the Immigration Control and Refugee Recognition Act (promoting illegal employment). Six Nepal citizens dispatched from an employment agency were made to make Japanese sweets, etc., which were outside their status of residence as “technical/cultural knowledge/international work” (“technical workers”) normally specializing as engineers or translators, etc., with the knowledge of Nakamuraya.

1. Types of status of residence and limits on work (activities)

Status of residence are three broad categories set out below, depending on what work is allowed in Japan.

(1) status of residence allowed depending on the content of the work or the position (example) “professor”, “medical”, “journalism”, “technical worker”, etc.

(2) status of residence not limited in activities due to social position or other position (example) “permanent resident”, “spouse of Japanese”, etc.

(3) status of residence that does not allow work (example) “short term visit”, “study”, “family visit”, etc.

Since there is no limitation on activities for social position or other position, there is no limitation on type of work but a status of residence based on position or content of work is allowed based on such activities, and if different activities are done it becomes a violation of the Immigration Control and Refugee Recognition Act (“Immigration Act”) as unauthorized activities outside the scope of authorization.

Up to now, Japan has been actively working to accept foreign workers in specialist/technical areas but has been passive about acceptance of foreign workers for simple labor, but in recent years lack of laborers has been a rising problem in certain industries and from April 2019 housing, manufacturing, restaurant, etc., have been singled out for “designated expertise” as a status of residence, etc., and a system to assure new workers has started.

2. Activities outside scope of residence (violation of limitation on work hours for foreign students, etc.)

The following types of “activities outside scope” violations occur often under the Immigration Act.

(1) a case where the person worked in a different activity from that allowed by the status of residence (violation of Immigration Act Article 19, paragraph 1, item 1)
(2) a case where a foreigner worked without a status of residence that allows work (violation of Immigration Act Article 19, paragraph 1, item 2)
(3) a case where work in excess of the allowed scope

Among these, item (3) is a case where a foreign student exceeds the time allowed in a part-time job and many people are aware of this. When a foreign student or family visitor does a part-time job upon obtaining permission to work outside the status of residence as a basic rule 28 hours of work are allowed each week. Therefore, when work is done in excess of that time it becomes a violation of law.

28 hours a week is 4 hours a day for a 7 day week and more than that is a hinder to the performance of the status of residence and there are often cases where the foreign study or family stay is refused upon the renewal of the status of residence due to doubts about the purpose of the status. Our office also has seen many cases where renewal of the status of residence has been refused.

3. Actual cases of activities outside scope and the penalties (including criminal sanctions)

(1) Lets look at some cases where the person worked in a different activity from that allowed by the status of residence (above 2(1)).

① In August 2019, Philippine women entering under a status of residence for dancer and actress, etc., were used as hostesses by a Japanese shop owner and were arrested for violation of the Immigration Act (promoting illegal employment) and three of the Philippine hostesses were arrested for violation of the Immigration Act (work outside the scope).

② The case of a Vietnam person under a “technical trainee” status of residence who worked for a company after dispatch by an employment company outside the prefecture without obtaining permission for activities outside the scope (October 2019), and a case of a family stay person who worked in housing construction in spite of having only the “family stay” status of residence (June 2021), are some cases.

(2) Next, the following are examples for the case where a foreigner worked without a status of residence that allows work (above 2(2)).

A Chinese person who entered under the status of residence for “short term stay” and pimped a Thailand woman was arrested together with the shop manager (November 2020), etc., and other foreigners who entered for tourism and tried to do some kind of work are cases under this category.

(3) Finally, examples of cases where work in excess of the allowed scope (above 2(3)) are the following.

① In 2017 a large kushi cutlets shop (“Daruma”) hired Vietnam, Nepal, Mayanmar students and worked them well over the limit of 28 hours per week, and the students were arrested and referred to the prosecutors, and the company and person in charge incurred criminal penalties.

② In 2016 foreign students were forced by a Japanese Language School to work in multiple locations and although each location was within 28 hours but since they worked in multiple locations the overall time exceeded 28 hours. The managers knew of this and forced the persons to keep silent which is a malicious case.

4. The case of “Nakamuraya” ~ “technical workers” status of residence ~

Lets explain a little more about the status of residence “technical worker” that became a problem for the Nakamuraya referral to prosecutors case.

The technical worker status of residence is given for work activities that require technical expertise or knowledge. These areas include fields requiring science/engineering or other life sciences, law, economics, sociology and other humanities, or thinking or sensitivity based on the culture of a foreign country. As an example, mechanical engineering or electronic engineering engineers, programmers, architects, management consultants, designers, translators, foreign language teachers fall under these.

Even in a case where the work falls under these, a case where the applicant does not have any connection with such specialty, or the work using the specialty is only a part of the job, the status may not be granted.

In making an application, in the case of a listed company the submission documents are few but in general a work contract, etc., and materials showing the work conditions and proof of college graduation, etc., and documents showing the activities and related technical knowledge will be needed to be submitted.

An example of activities outside the scope without permission by a foreigner that are still fresh in memory by a “technical worker” was the case in 2020 of the Chinese restaurant (“Bairan”). The restaurant had catering, etc., done by 7 Chinese college and specialist school graduates who did not qualify as “technical worker”. The president’s excuse was that “even if we wanted to hire Japanese we could not find them”.

In recent years companies that dispatch foreigners are increasing, but in 2020 there was a case where “technical trainee”, etc., Vietnam persons were dispatched to a fishery company and five employees of the dispatching company were arrested for promoting illegal work and the Vietnam persons were also arrested for illegal stay and promotion of illegal work.

In this Nakamuraya case, the destination of the Nepal persons dispatched from the employment agency was exposed. Under the Immigration Act not only the person who caused the illegal work activities but also the person putting the foreigner under control and persons who promoted the business of promoting illegal work activities can all be subject to up to 3 years of imprisonment or 2 million yen penalty (Article 73-2).

Illegal work does not only include illegal entry and illegal overstay by foreigners but the activities not included in the status of residence or activities exceeding the scope, and not only the person hiring the illegal worker but the person who provides lodging for the illegal worker, promotion of illegal work, brokers who introduce the worker, in other words persons who know the work is illegal and ignored it can be fined.

Whether the dispatcher or the destination, a person who has connection with the foreign worker is required to keep in mind whether the person has a proper status of residence.

Especially in the case of the dispatch destination company, it is likely to shut its eyes to the risk and trust in the “dispatching company” but care is needed because “we trusted the dispatching company” reason will no longer allow the destination company to escape responsibility.

In the Nakamuraya case it has been reported that the persons in charge said “we knew it was illegal. But we needed the workers”. Certainly, for a company in an industry where there are not enough workers, it is easy to take a foreign worker as “translator” who has a status of residence of technical worker or receive the dispatch of such worker and have them work in something other than “translator”, which seems to be often the case.

But, this case clearly shows that not only the dispatching company but also the destination company will be exposed.

From now, in the case where a dispatch of a foreign worker is received, it is important for your company to confirm for itself and not leave it up to the dispatching company.

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