Can you use a foreign national on business consignment? — judging worker status and matching it with the residence status

In short: When you engage a foreign national on "business consignment (freelance)," check three things first — "that whether it is employment or consignment is judged by the reality of the working arrangement, not the contract's name (worker status)," "whether the consignment arrangement matches the person's residence status (Engineer / Specialist in Humanities / International Services presupposes a contract with an organisation in Japan)," and "that, if judged a worker, social insurance, workers' accident insurance and the minimum wage apply retroactively to when the real employment began." Whether someone is a "worker" under the Labor Standards Act (Article 9) is judged not by the contract's name but by the reality — whether the person can refuse an order, is under direction and supervision, is bound as to time and place, and whether the pay is consideration for labour (the 1985 Labor Standards Act Study Group report). Because the residence status "Engineer / Specialist in Humanities / International Services" presupposes activity under a contract with a public or private organisation in Japan, whether the consignment arrangement matches the residence status becomes an individual eligibility judgment. This article organises, within a Shakai Hoken Roumushi's work, the worker-status judgment, the match with residence status, the retroactive insurance and minimum wage if judged a worker, and why the contract's name alone is not enough. The judgment of residence-status eligibility and application filing go to a Gyoseishoshi (filing agent) and the Immigration Services Agency; disputes over the contract or pay go to an attorney.

"We want to engage personnel from China or Taiwan on business consignment rather than employment," and "we already put out work to a foreign national on consignment — is this all right for the residence status and insurance?" — these are questions we often hear from businesses and the individuals (professionals) who engage foreign personnel. This page organises the labour of engaging a foreign national on consignment (the worker-status judgment, the match with residence status, the retroactive insurance and minimum wage) as a labour design. The judgment of residence-status eligibility itself, the application filing, and resolving a contract dispute are outside this article's scope (the domain of a Gyoseishoshi, an attorney and the Immigration Services Agency) and are touched on only in passing.

When you use a foreign national on business consignment, what is first judged to be "employment"?

Whether the Labor Standards Act and the Minimum Wage Act apply — whether the person is a "worker" — is judged by the reality of the working arrangement, not by the contract's name (business consignment, subcontract). Labor Standards Act Article 9 defines a worker as "a person who is used in a business and is paid wages," and the criteria are organised in the 1985 Labor Standards Act Study Group report.

Perspective	A reality that tends toward "worker"
Freedom to accept/refuse	Cannot refuse an individual order (cannot in practice refuse)
Direction and supervision	Receives concrete instructions on how to perform the work
Time / place binding	Working hours and place are designated and binding
Substitutability	No one but the person can perform the work in their place
Nature of pay	Pay is calculated by the unit of time, etc. — consideration for labour

In addition, whether the person bears the machinery and tools, the amount of pay, and the presence or absence of exclusivity (whether they may take other companies' work) are weighed as supplementary factors. Because these are judged in the round, even if the name is "business consignment," a reality of labour under direction and supervision is judged to be a worker. On the line between general outsourcing — including Japanese nationals — and worker status, see where the line between outsourcing and employment is drawn. The final worker-status determination is made by the labour standards inspection office or a court on the individual facts.

Does a residence status such as Engineer / Specialist in Humanities / International Services match business consignment?

The residence status "Engineer / Specialist in Humanities / International Services" (gijinkoku) is defined, in Appended Table I-2 of the Immigration Control and Refugee Recognition Act, as work requiring technology or knowledge in the natural or human sciences under a contract with a public or private organisation in Japan. This is where the foreign-national consignment first stumbles.

Point	Content
The contracting party	A contract with a public or private organisation in Japan (which can include a company, body, or an individual) is presupposed
The contract form	Not limited to employment, but a continuous and stable contract with a specific organisation is required
The work content	Work that is served by simple tasks or repetitive training is judged not to fall under it
One-off consignment with many unspecified parties	A one-off consignment with no fixed counterparty tends to break the eligibility

Whether the consignment (freelance) form matches the residence status is an individual eligibility judgment in light of the contract's continuity and stability and the work content. This eligibility judgment and the filing of residence applications are the domain of a Gyoseishoshi (filing agent) and the Immigration Services Agency; a Shakai Hoken Roumushi cannot act as a filing agent for residence applications. On the labour and residence match when hiring personnel from China or Taiwan under gijinkoku, see what to check when hiring personnel from China or Taiwan under Engineer / Specialist in Humanities / International Services. The final judgment of residence-status eligibility is made by the Immigration Services Agency.

If judged a worker, how do social insurance, workers' accident insurance and the minimum wage apply retroactively?

Once the reality is judged to be a worker, labour-relations laws apply retroactively over the period treated as consignment. The retroactive range differs by insurance.

Item	How it applies retroactively
Workers' accident insurance	Applies as a matter of course to a worker. Even where the employer has not processed it, an injured worker can receive benefits (costs can be collected from the employer)
Health insurance / employees' pension	On confirmation of insured status, joining and premium burden can arise retroactively, in principle within the 2-year prescription of the right to collect premiums
Employment insurance	Retroactive confirmation of insured status. In principle 2 years; it can go back further where deduction of premiums from wages is confirmed
Minimum wage	The Minimum Wage Act applies to a worker; pay below the regional minimum wage can give rise to an obligation to pay the shortfall

Retroactivity leads to extra premium burden and the settlement of unpaid wages, and the amounts tend to be large. For workers' accident insurance, even where the employer has not processed it, benefits are paid to the worker, and the employer can be subject to cost collection (retroactive premiums and, in some cases, part of the benefit cost). On the duties of a party that puts out work to a freelancer (the terms disclosure, the payment due date, etc.), see what a company that commissions a freelancer should check. The concrete range and amount of the retroactivity are confirmed with the competent pension office, labour standards inspection office and Hello Work.

Is writing "business consignment" in the contract enough? (the reality-priority pitfall)

In conclusion, the contract's wording alone is not enough. Because worker status is judged by reality, even with a "business consignment contract" name or a clause that "no direction is received," if you actually have the person work under direction and supervision with time and place bound, they are judged to be a worker.

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Common misunderstanding	The reality
A "business consignment contract" means labour law does not apply	The name is not decisive; judged by reality
Writing "consignment fee" means it is not wages	If it is consideration for labour, it is treated as wages
If the person agrees, consignment is fine	Even with agreement, if the reality is a worker, the law applies

For a foreign national, this "reality-priority" pitfall overlaps with the residence-status issue. Where it was meant as consignment but the reality was employment, in addition to the labour-side retroactivity, a review of residence-status eligibility (gijinkoku presupposes a contract with an organisation in Japan) may become necessary. Further, the Act on Optimising Transactions with Specified Entrusted Business Operators (the Freelance Act), in force since 1 November 2024 (Reiwa 6), imposes on the commissioning party, even where a consignment is put out properly, duties such as disclosing the terms of the transaction and the payment due date (in principle within 60 days of receiving the work). Labour (the worker-status judgment and the social- and labour-insurance procedures) is a Shakai Hoken Roumushi's work; the residence-status eligibility judgment and application filing are a Gyoseishoshi's (filing agent's); disputes over the contract or pay are an attorney's — each as an independent business entity contracted separately.

Whom should you consult about worker status, residence status and a contract dispute?

In foreign-national consignment, what to check divides into three. Separating the roles and entrusting each to its professional is safer.

What is done	Whose domain
Designing working conditions in light of worker status, judging and processing social and labour insurance, confirming the minimum wage	Shakai Hoken Roumushi (四葉社会保険労務士事務所)
Judging residence-status eligibility, filing residence applications (the match of consignment and residence)	Gyoseishoshi (filing agent)
Judging whether to permit the residence status	Immigration Services Agency
Disputes over the consignment contract, pay, or worker status	Attorney

四葉社会保険労務士事務所 handles labour as an independent business entity. The residence-status eligibility judgment and application filing go to a Gyoseishoshi (filing agent), and disputes to an attorney, each under a separate contract — a separate-engagement arrangement. Because a Shakai Hoken Roumushi cannot act as a filing agent for residence applications, the residence-related part is always referred to a Gyoseishoshi (filing agent). No referral fees are exchanged. Consultation is free. For fees, see the fee schedule; for FAQs, see the FAQ.

FAQ

Q. If we conclude a business-consignment contract, does the Labor Standards Act not apply?
A. It is not decided by the contract's name alone. Whether someone is a worker is judged by the reality — whether they can refuse work, are under direction and supervision, are bound as to time and place, and whether the pay is consideration for labour (Labor Standards Act Article 9 and the 1985 Study Group report). If the reality is a worker, the Labor Standards Act and the Minimum Wage Act apply even if the name is consignment.

Q. Can a person work on business consignment under the Engineer / Specialist in Humanities / International Services status?
A. The status presupposes activity under a contract with a public or private organisation in Japan. It is not limited to employment, but a continuous and stable contract with a specific organisation is required, and a one-off consignment with no fixed counterparty tends to break the eligibility. Whether it matches is an individual eligibility judgment — the domain of a Gyoseishoshi (filing agent) and the Immigration Services Agency.

Q. If someone treated as consignment is judged a worker, what applies retroactively?
A. Workers' accident insurance applies as a matter of course (benefits even without processing; cost collection from the employer is possible); health insurance, employees' pension and employment insurance can arise retroactively within the 2-year prescription of the premium-collection right; and where pay was below the minimum wage, an obligation to pay the shortfall can arise. The range and amount are confirmed with the competent pension office, labour standards inspection office and Hello Work.

Q. If the person agrees to business consignment, is there no problem?
A. Even with the person's agreement, if the reality is labour under direction and supervision, they are judged to be a worker — because worker status is judged by reality, not by the parties' agreement. In addition, even for a proper consignment, the Freelance Act (in force 1 November 2024) imposes on the commissioning party duties such as disclosing the terms and the payment due date.

Sources

• Labor Standards Act (Act No. 49 of 1947), Article 9 (worker = a person used in a business and paid wages). The worker-status criteria are in the Labor Standards Act Study Group report of 19 December 1985 (use-subordination = freedom to accept/refuse, direction and supervision, time/place binding, substitutability; the labour-consideration nature of pay; and supplementary factors such as business-operator nature and exclusivity). The final worker-status determination is made by the labour standards inspection office or a court
• Immigration Control and Refugee Recognition Act, Appended Table I-2, "Engineer / Specialist in Humanities / International Services" (work requiring technology or knowledge under a contract with a public or private organisation in Japan). Simple or repetitive work is judged not to fall under it. The match of consignment and residence status, and the filing of residence applications, are the domain of a Gyoseishoshi (filing agent) and the Immigration Services Agency (Immigration Services Agency published materials; referenced 13 October 2026. The individual handling of contract form and continuity is confirmed with Immigration)
• Act on Optimising Transactions with Specified Entrusted Business Operators (the Freelance Act; Act No. 25 of 2023). In force 1 November 2024 (Reiwa 6). Imposes on the commissioning operator duties such as disclosing the terms of the transaction, the payment due date (in principle within 60 days of receiving the work), and arranging the working environment (referenced 13 October 2026)
• Minimum Wage Act (application of the regional minimum wage), Industrial Accident Compensation Insurance Act (application to workers and cost collection from the employer), Health Insurance Act / Employees' Pension Insurance Act / Employment Insurance Act (confirmation of insured status and the 2-year prescription of the premium-collection right). The concrete range and amount of the retroactivity are confirmed with the competent pension office, labour standards inspection office and Hello Work

This article does not decide whom to consult. Designing working conditions in light of worker status, judging and processing social and labour insurance, and confirming the minimum wage are the work of a Shakai Hoken Roumushi. The residence-status eligibility judgment and the filing of residence applications are for a Gyoseishoshi (filing agent), the permit decision for the Immigration Services Agency, and disputes over the contract, pay or worker status for an attorney. 四葉社会保険労務士事務所 is an independent business entity, contracted separately from the Gyoseishoshi (filing agent) and attorney.

This article is general information. A judgment on individual circumstances is made by a qualified professional after a consultation. Written by Joji Uramatsu (Shakai Hoken Roumushi, Gyoseishoshi, Registered Real Estate Transaction Specialist).