What a client company has to get right under the Freelance Act: terms, payment, and harassment response

Bottom line first: When you commission work from a freelancer, "it is a commissioning contract, so labour law does not apply" is not the end of it. Disclosure of transaction terms and the payment deadline apply to every order; the prohibited acts apply to commissions of one month or more; consideration for childcare and nursing care and notice of termination apply to commissions of six months or more.

Whose transactions does the Freelance Act cover?

Its formal name is the Act on Ensuring Proper Transactions Involving Specified Entrusted Business Operators (Act No. 25 of 2023). It came into force on 1 November 2024.

What it covers is commissioning work to a specified entrusted business operator. That means a counterparty to a commission who is either (i) an individual who employs no staff, or (ii) a corporation that has no officer other than its representative and employs no staff. A trade name or incorporation makes no difference: someone working alone falls within it.

The commissioning side divides in two. A commissioning business operator is any business that commissions work to a specified entrusted business operator. A specified commissioning business operator is one that is either (i) an individual who employs staff, or (ii) a corporation that has two or more officers or employs staff.

So a company with even one employee, or with two or more officers, is in principle a specified commissioning business operator. What it owes turns on that distinction and on the length of the commission.

Obligation	Provision	Who	When
Disclosure of transaction terms	Art. 3	Every commissioning business operator	Every order
Payment deadline and payment by it	Art. 4	Specified commissioning business operators	Every order
Seven prohibited acts	Art. 5	Specified commissioning business operators	Commissions of one month or more
Accurate display of recruitment information	Art. 12	Specified commissioning business operators	When recruiting
Systems for responding to harassment	Art. 14	Specified commissioning business operators	At all times
Consideration for childcare and nursing care	Art. 13(1)	Specified commissioning business operators	Commissions of six months or more (below that, a duty to endeavour under Art. 13(2))
Notice and disclosure of reasons on termination or non-renewal	Art. 16	Specified commissioning business operators	Commissions of six months or more

Not every obligation applies uniformly to every client. Mistaking this leads either to unnecessary work or to a gap where an obligation was missed.

What must be disclosed when an order is placed?

Article 3 requires that, on commissioning work, the client immediately disclose the content of the deliverable, the amount of the fee, the payment deadline and other matters, in writing or by electromagnetic means.

Eight items are disclosed.

1. The names of the commissioning business operator and the specified entrusted business operator
2. The date the work was commissioned
3. The content of the deliverable
4. The date on which the deliverable is to be received or the service provided
5. The place at which the deliverable is to be received or the service provided
6. Where the deliverable is to be inspected, the date on which inspection is to be completed
7. The amount of the fee and the payment deadline
8. Where the fee is paid by means other than money, matters concerning the method of payment

This obligation falls on every commissioning business operator. A one-person company that subcontracts to another freelancer is covered too. Electromagnetic means suffice, so email or chat will do, but it must be left in a form that can be checked afterwards.

Preparing a contract and discharging this disclosure obligation are separate matters. Whether the content of a contract is appropriate for the company is not something this office determines.

By when must the fee be paid?

Article 4, paragraph 1 requires the payment deadline to be set within 60 days of the date the deliverable was received, and within as short a period as possible. Whether the client inspects the deliverable is irrelevant.

Note that this is not a provision saying "any time within 60 days is fine". The text goes on: "and within as short a period as possible".

Where no payment deadline is set, the date the deliverable was received is deemed to be the deadline; where a deadline beyond 60 days is set, the day on which 60 days elapse from receipt is deemed to be it (Article 4, paragraph 2). Commercial practices such as "closing at month end, payment at the end of the month after next" can exceed 60 days from receipt.

There is also a separate rule for subcontracting. Under Article 4, paragraph 3, the payment deadline for a subcontracted commission must be set within 30 days of the payment deadline under the head commission, and within as short a period as possible. The reference point is the day the head client pays. Using this rule requires disclosing that the commission is a subcontract, among other things.

What is prohibited on commissions of one month or more?

Article 5 prohibits seven acts where the commission runs for the period specified by Cabinet Order (one month) or more. Commissions that come to run for one month or more through renewal are included.

Five under paragraph 1.

1. Refusing to receive the deliverable, absent grounds attributable to the specified entrusted business operator (refusal of receipt)
2. Reducing the amount of the fee, absent grounds attributable to the specified entrusted business operator (reduction of the fee)
3. Having the specified entrusted business operator take back goods after receipt, absent grounds attributable to it (return of goods)
4. Unjustly setting a fee markedly lower than the consideration ordinarily paid for the same or similar deliverables (squeezing the price)
5. Except where there is a legitimate reason, compelling the purchase of goods or the use of services that the client designates (compelled purchase or use)

Two under paragraph 2, within the frame of not unjustly harming the interests of the specified entrusted business operator.

6. Having money, services or other economic benefits provided for the client's own benefit
7. Making the content of the deliverable be changed, or having it redone after receipt, absent grounds attributable to the specified entrusted business operator

"The other side agreed" does not justify these acts. Items 1 to 3 and 7 turn on there being no grounds attributable to the specified entrusted business operator; agreement does not appear in the text.

May bank transfer fees be deducted from the fee?

The Japan Fair Trade Commission takes the position that, for commissions (orders) placed on or after 1 January 2026, deducting a bank transfer fee from the amount of the fee constitutes a reduction of the fee regardless of whether the specified entrusted business operator has agreed.

Before that, the position was that a deduction did not count as a reduction where there was prior agreement and the amount stayed within the fee actually paid to the financial institution. For orders placed from January 2026, that agreement-based analysis no longer works.

A company whose payment system or template contract still says "transfer fees borne by the contractor" needs to check. In practice this means either raising the fee by the amount of the transfer charge or shifting to the client bearing it.

What care does recruitment information need?

Article 12, paragraph 1 provides that where information on recruiting specified entrusted business operators is provided by advertisement or similar means, the client must not make a false representation or a representation that gives rise to misunderstanding. The information must also be kept accurate and up to date.

The Ministry of Health, Labour and Welfare draws particular attention to the matters specified by Cabinet Order, such as the content of the work, the place of work, and the fee — that is, whether the terms shown at the recruitment stage match the terms actually ordered.

The thinking is close to that behind job-advertisement disclosure, so see also What has to appear in a job advertisement. But recruiting workers and recruiting freelancers are separate obligations under separate laws. Running both on the same form tends to produce something that satisfies neither.

How far does consideration for childcare and nursing care go?

Article 13, paragraph 1 requires, for a continuous commission (a commission running for the period specified by Cabinet Order — six months or more — including one that comes to run for six months or more through renewal), that the client, in response to a request from the specified entrusted business operator, give the consideration necessary in light of that person's circumstances so that they can carry out the work while managing pregnancy, childbirth, childcare or nursing care.

For commissions of under six months, Article 13, paragraph 2 makes this a duty to endeavour.

"Consideration" here is not the same as the measures owed to employees under the Child Care and Family Care Leave Act. The structure is that, on receiving a request, the client considers what can be done within the frame of the commission — adjusting working days and times, moving a meeting online, revisiting a deadline. It is not an obligation to approach the person where no request has been made.

What matters is whether there is a point of contact to receive the request. In a company with no designated recipient, no request is ever made.

How should a harassment consultation system be set up?

Article 14, paragraph 1 requires a specified commissioning business operator to put in place the systems necessary to respond appropriately to consultations, and other necessary measures, in relation to three kinds of conduct.

1. Causing disadvantage in the terms of the commission through the person's response to sexual conduct, or harming their working environment through sexual conduct (sexual harassment)
2. Harming the working environment through conduct relating to matters concerning pregnancy or childbirth specified by Ministry of Health, Labour and Welfare Order
3. Harming the working environment through conduct backed by a superior position in the transaction that goes beyond the scope necessary and appropriate for carrying out the work

The third has the same structure as power harassment within a company, but rests on a different statute. The measures required under the Labour Policy Comprehensive Promotion Act are owed to employed workers, and freelancers are not included.

This is where practice most often falls short. The Ministry, noting that guidance by Prefectural Labour Bureaux has been concentrated on breaches of the harassment-system obligation and the accurate-display obligation, states that when clarifying and publicising policy and setting up consultation systems, it is important to provide expressly that specified entrusted workers are included among those covered.

In other words, a company that already has a power-harassment consultation desk cannot easily claim to satisfy Article 14 if its rules and notices still say they cover "employees". Opening the existing desk to freelancers is possible, and more realistic, but an amendment stating the scope is required. On workplace power-harassment measures themselves, see Power harassment measures are mandatory for small and medium-sized companies too.

The content of the measures is set out in the guidelines (Ministry of Health, Labour and Welfare Notification No. 212 of 31 May 2024): clarifying and publicising policy, setting up consultation systems, ascertaining the facts promptly and accurately, showing consideration to the person harmed, taking measures against the person responsible, preventing recurrence, and protecting privacy.

What applies when terminating or not renewing a commission of six months or more?

Under Article 16, paragraph 1, where the client intends to terminate a contract for a continuous commission (six months or more) — including not renewing it after the contract period ends — it must give notice at least 30 days in advance. Cases specified by Ministry Order, such as where notice is difficult because of a disaster or other unavoidable cause, are excepted.

Further, under Article 16, paragraph 2, where the specified entrusted business operator requests disclosure of the reason for the termination between the day notice is given and the day the contract ends, the client must disclose it without delay. Cases specified by Ministry Order, such as where a third party's interests may be harmed, are excepted.

Telling someone "this is the last one" just before expiry does not work on commissions of six months or more. Contract management needs a mechanism for identifying transactions that reach six months and deciding on renewal at least 30 days out.

What is actually being cited as a breach?

According to the Japan Fair Trade Commission's publication of 10 June 2026 on operation in FY2025, the figures are as follows.

Item	FY2025
Recommendations	10
Guidance	1,542
Reports of suspected breaches	604
New cases opened	1,626
Measures taken	1,552

By type of breach, failure to pay the fee by the deadline came first at 1,135 cases (41.6%), followed by failure to disclose transaction terms at 1,126 cases (41.3%) and squeezing the price at 250 cases (9.2%). The top two account for over 80%.

What actually causes trouble, then, is not a subtle point of law but two plain ones: is the payment deadline being met, and are the terms handed over in writing or by electromagnetic means with every order? Getting these right does the most work.

On the Ministry of Health, Labour and Welfare side, guidance by Prefectural Labour Bureaux in FY2024 was concentrated on breaches of the harassment-system obligation and the accurate-display obligation. The split in jurisdiction — the Japan Fair Trade Commission and the Small and Medium Enterprise Agency for proper transactions, the Ministry of Health, Labour and Welfare for the working environment — shows through directly in what gets cited.

Can someone contracted as a "freelancer" still be a worker?

Yes. Even where the contract is called a commissioning contract, a person who in fact works under direction and supervision may be judged a worker under the Labour Standards Act. Working-hour regulation, premium wages, the minimum wage and labour insurance then apply.

The Freelance Act governs transactions with businesses that are not workers. Where worker status is made out, the question is one of labour law, not of the Freelance Act. Which statute applies is decided at the threshold, by worker status.

That said, the final determination whether a particular contract creates worker status is not made by this office. The framework and the points that arise in practice are set out in The line between outsourcing and employment is not drawn by the contract. For how working hours are treated when your own employee takes freelance work on the side, see Managing a workforce that moonlights.

Who handles what — Shakai Hoken Roumushi, lawyer, tax accountant?

Jurisdiction over the Freelance Act is split, and that split maps directly onto whom to consult.

Proper transactions (Articles 3 to 11) fall to the Japan Fair Trade Commission and the Small and Medium Enterprise Agency. Disclosure of terms, payment deadlines and the prohibited acts sit here. How to draft a contractual clause, or whether a particular transaction amounts to squeezing the price, belongs to contract and transaction practice. Once a dispute arises, a lawyer (Bengoshi) handles it.

The working environment (Articles 12 to 16) falls to the Ministry of Health, Labour and Welfare. Accurate display of recruitment information, consideration for childcare and nursing care, systems for responding to harassment, and notice of termination sit here. What 四葉社会保険労務士事務所 can take on is advice on building these arrangements — amending rules so that the harassment consultation desk covers specified entrusted workers, organizing the procedure once a consultation comes in, designing the form for recruitment information, and building an internal workflow that identifies continuous commissions and feeds them into the 30-day notice.

Tax is the domain of the tax accountant (Zeirishi). Withholding on payments to freelancers, qualified invoices and consumption tax are not handled by this office.

Where incorporation or licensing is needed, 四葉行政書士事務所 takes it on as a separate business entity. On how to divide the work, see Who should you turn to when letting an employee go, a Shakai Hoken Roumushi or a lawyer? and What can, and cannot, be asked of a Shakai Hoken Roumushi on hiring?.

Frequently asked questions

Q. We are a one-person company with no employees. Do we owe anything under the Freelance Act?
A. Yes, but within a limited range. Every business that commissions work to a specified entrusted business operator is a "commissioning business operator" and owes the disclosure obligation under Article 3. The payment deadline (Article 4), the prohibited acts (Article 5), recruitment information (Article 12), childcare and nursing-care consideration (Article 13), harassment systems (Article 14) and notice of termination (Article 16) are owed by "specified commissioning business operators" — individuals who employ staff, and corporations with two or more officers or which employ staff. Hiring a single employee changes substantially what you owe.

Q. Is anything required for a one-off order?
A. Disclosure of transaction terms (Article 3) and, for a specified commissioning business operator, the payment deadline (Article 4) apply to every order regardless of length. The prohibited acts (Article 5) apply to commissions of one month or more; childcare and nursing-care consideration (Article 13, paragraph 1) and notice of termination (Article 16) to continuous commissions of six months or more. Even for a one-off, two things cannot be skipped: hand over the terms in writing or by electromagnetic means, and set and meet a deadline within 60 days of receipt, as short as possible.

Q. We have a power-harassment consultation desk. Does that cover the Freelance Act?
A. Check the scope stated in the rules and notices. The measures required under the Labour Policy Comprehensive Promotion Act are owed to employed workers, and freelancers are not included. The Ministry states that when clarifying and publicising policy and setting up consultation systems, it is important to provide expressly that specified entrusted workers are covered. Opening the existing desk to freelancers is possible, but an amendment stating the scope is needed.

Q. Can we keep deducting bank transfer fees from the fee?
A. For commissions (orders) placed on or after 1 January 2026, the Japan Fair Trade Commission takes the position that deducting a bank transfer fee from the fee constitutes a reduction of the fee regardless of agreement. The earlier analysis — that a deduction was permissible with prior agreement and within the actual cost — no longer applies. Check template contracts and payment settings.

Basis for this article

• Act on Ensuring Proper Transactions Involving Specified Entrusted Business Operators (Act No. 25 of 2023) — in force 1 November 2024
• Article 2, paragraph 1 — a "specified entrusted business operator" is a counterparty to a commission who is (i) an individual employing no staff, or (ii) a corporation with no officer other than its representative and employing no staff
• Article 2, paragraph 6 — a "specified commissioning business operator" is a commissioning business operator who is (i) an individual employing staff, or (ii) a corporation with two or more officers or which employs staff
• Article 3, paragraph 1 — on commissioning work, the client must immediately disclose the content of the deliverable, the amount of the fee, the payment deadline and other matters in writing or by electromagnetic means. Eight items (names of the parties; the date of the commission; the content of the deliverable; the date of receipt or provision; the place; the date for completing inspection where one is made; the amount of the fee and the payment deadline; the method of payment where paid other than in money)
• Article 4, paragraph 1 — the payment deadline must be set within 60 days of the date the deliverable was received, and within as short a period as possible, whether or not the client inspects it
• Article 4, paragraph 2 — where no deadline is set, the date of receipt is deemed to be the deadline; where a deadline beyond 60 days is set, the day 60 days after receipt is deemed to be it
• Article 4, paragraph 3 — for a subcontracted commission the deadline must be set within 30 days of the payment deadline under the head commission, and within as short a period as possible
• Article 5, paragraph 1 — prohibited acts where the commission runs for the period specified by Cabinet Order (one month) or more: (i) refusal of receipt, (ii) reduction of the fee, (iii) return of goods, (iv) squeezing the price (unjustly setting a fee markedly lower than the consideration ordinarily paid for the same or similar deliverables), (v) compelled purchase or use. Items (i) to (iii) turn on there being no grounds attributable to the specified entrusted business operator
• Article 5, paragraph 2 — (i) having money, services or other economic benefits provided for the client's own benefit; (ii) making the content of the deliverable be changed, or having it redone after receipt, absent grounds attributable to the specified entrusted business operator
• Article 12, paragraph 1 — where recruitment information is provided by advertisement or similar means, no false representation or representation giving rise to misunderstanding may be made
• Article 13, paragraph 1 — for a continuous commission (the period specified by Cabinet Order — six months or more, including one reaching six months through renewal), the client must, in response to a request, give the consideration necessary in light of the person's circumstances so that they can work while managing pregnancy, childbirth, childcare or nursing care
• Article 13, paragraph 2 — for commissions other than continuous commissions, the client must endeavour to give the same consideration (a duty to endeavour)
• Article 14, paragraph 1 — the client must put in place the systems necessary to respond appropriately to consultations and other necessary measures, covering (i) sexual conduct, (ii) conduct relating to matters concerning pregnancy or childbirth specified by Ministry Order, and (iii) conduct backed by a superior position in the transaction going beyond the scope necessary and appropriate for carrying out the work
• Article 16, paragraph 1 — where the client intends to terminate a contract for a continuous commission (including not renewing it after the contract period ends), it must give notice at least 30 days in advance, save in cases specified by Ministry Order such as where notice is difficult because of a disaster or other unavoidable cause
• Article 16, paragraph 2 — where disclosure of the reason is requested between the day notice is given and the day the contract ends, the client must disclose it without delay, save in cases specified by Ministry Order such as where a third party's interests may be harmed
• Article 24 — breach of an order, failure to report, false reporting, and refusal of inspection are punishable by a fine of up to 500,000 yen. Article 25 imposes dual liability; Article 26 provides for a civil fine of up to 200,000 yen
• Order for Enforcement of the Act on Ensuring Proper Transactions Involving Specified Entrusted Business Operators (Cabinet Order No. 200 of 2024) — the period specified for Article 5 is one month; for Articles 13 and 16, six months
• Ordinance of the Ministry of Health, Labour and Welfare for Enforcement of the Act (Ministry of Health, Labour and Welfare Order No. 94 of 2024)
• Guidelines on measures to be taken by specified commissioning business operators concerning the accurate display of recruitment information, consideration for childcare and nursing care, and problems arising from conduct in relation to commissioned work (Ministry of Health, Labour and Welfare Notification No. 212 of 31 May 2024) — clarifying and publicising policy, setting up consultation systems, ascertaining the facts promptly and accurately, showing consideration to the person harmed, taking measures against the person responsible, preventing recurrence, and protecting privacy
• Ministry of Health, Labour and Welfare, "One year since the Freelance Act came into force" — in FY2024, guidance by Prefectural Labour Bureaux was concentrated on breaches of the harassment-system obligation and the accurate-display obligation. When clarifying and publicising policy and setting up consultation systems, it is important to provide expressly that specified entrusted workers are covered
• Japan Fair Trade Commission, "Operation of Chapter 2 of the Freelance Act in FY2025 and initiatives towards proper transactions involving freelancers" (published 10 June 2026) — 10 recommendations, 1,542 instances of guidance, 604 reports of suspected breaches, 1,626 new cases opened, 1,552 measures taken. By type: failure to pay by the deadline 1,135 (41.6%), failure to disclose transaction terms 1,126 (41.3%), squeezing the price 250 (9.2%)
• Japan Fair Trade Commission, list of recommendations under the Freelance Act — for commissions (orders) placed on or after 1 January 2026, deducting a bank transfer fee from the fee constitutes a reduction of the fee regardless of whether the specified entrusted business operator has agreed
• Public materials and statutory provisions were checked on 21 August 2026

This article does not determine whether any particular case qualifies. 四葉社会保険労務士事務所 can advise on the part of the Freelance Act concerned with the working environment (Articles 12 to 16): amending rules so that the harassment consultation desk covers specified entrusted workers, organizing the procedure once a consultation comes in, designing the form for recruitment information, setting up a point of contact to receive childcare and nursing-care requests, and building an internal workflow that identifies continuous commissions and feeds them into the 30-day notice. How to render disclosure of terms and payment deadlines in a contract, and whether a particular transaction amounts to squeezing the price or a reduction of the fee, are not handled by this office; we refer you to a lawyer (Bengoshi). Withholding on payments to freelancers, qualified invoices and consumption tax are matters we connect you with a tax accountant (Zeirishi) for. Incorporation and licensing are handled by 四葉行政書士事務所 as a separate business entity. If a different professional is needed, each is contracted separately, and there is no referral fee. Fees are set out in the fee schedule, and frequently asked questions are collected in the FAQ.

四葉不動産株式会社, 四葉行政書士事務所, and 四葉社会保険労務士事務所 each accept work as separate, independent business entities. Where we introduce another professional, we do so on the basis that you contract with them directly, and we receive no referral fee.

This article is general information. Individual determinations are made by a qualified professional after a consultation, in light of individual circumstances. Written by Joji Uramatsu (Shakai Hoken Roumushi, Gyoseishoshi, Registered Real Estate Transaction Specialist).