Which expires first — the period of stay or the employment contract?

In short: the period of stay and the employment contract term are two clocks running separately. Cut the contract to the period of stay, and every renewal requires the written conditions again; make the contract longer, and the period of stay expires first. Decide which is the anchor before the hire. Fixed-term contracts now also require the renewal cap to be stated (Ordinance for Enforcement of the Labor Standards Act, Article 5, paragraph 1, item 1-2).

This page is for owners and back-office staff employing foreign workers on fixed-term contracts. It is written from the labour-contract side only. Renewal of the residence status itself is gyoseishoshi work — see the company-side procedures and deadlines at 四葉行政書士事務所 (a separate business).

Should the contract term match the period of stay?

There is no single right answer — but you must choose the design deliberately.

Design	What follows
Contract term matched to the period of stay (e.g. fixed term up to the expiry)	The contract renews every time the status renews. Written conditions — including the renewal criteria and cap — are required at each renewal. Clear to manage, heavier to administer
Contract term decoupled from the period of stay (e.g. indefinite or longer fixed term)	The contract continues, but the period of stay expires first — a risk now managed outside the contract. A deadline-tracking system becomes essential

Common to both: do not rely on the contract renewal date alone to track the period of stay. In the decoupled design especially, nothing in the contract file watches the immigration clock.

How do you write the renewal cap?

For fixed-term contracts, the renewal criteria must be stated — and where a cap on the total contract period or the number of renewals is set, that cap as well (Ordinance for Enforcement of the Labor Standards Act, Article 5, paragraph 1, item 1-2; added by the amendment that took effect in April 2024).

The trap in foreign employment is writing "until the period of stay" as if it were a cap. If the status renews, the person can keep working — yet the contract's cap blocks it. Or the opposite: no cap, repeated renewals, and no thought given to conversion to an indefinite term (five years total under Article 18 of the Labor Contracts Act). The practical method is to design the three clocks — period of stay, renewal cap, conversion — side by side in one table.

What happens when the period of stay runs out?

Letting someone work past the expiry exposes the company to the offence of promoting illegal work (Immigration Control and Refugee Recognition Act, Article 73-2: up to three years' imprisonment or a fine of up to three million yen, or both). And paragraph 2 of the same article provides that not knowing the status or the expiry is no defence (unless there was no negligence). "We hadn't checked" does not work.

How the employment contract itself is then wound up remains a labour-contract question — but the deadline management before that point (knowing the residence-card expiry, confirming the renewal application schedule) is the company's real seawall.

Who manages the deadlines?

Role	Who
Designing and keeping the register of the three clocks — period of stay, contract term, conversion	A shakai hoken roumushi (this office)
The residence-status renewal application itself	A gyoseishoshi (四葉行政書士事務所 — a separate business, a separate contract)
Written conditions and contracts including the renewal criteria and cap	A shakai hoken roumushi (this office)

If the outsourcing-versus-employment line needs sorting first, see The line between outsourcing and employment is not decided by the contract; for the rules, From how many workers are work rules mandatory?.

What can 四葉社会保険労務士事務所 do?

四葉社会保険労務士事務所, in Kohinata, Bunkyo City, designs fixed-term contracts (renewal criteria and caps), prepares written conditions and contracts, and builds the deadline register alongside the period of stay. Consultation is free of charge. Fees are in the fee schedule; the whole flow of foreign employment is in Hire one foreign employee — how many counters do you need?.

Whom to consult

Residence-status applications, changes and renewals go to 四葉行政書士事務所 (a separate business from this office, engaged under a separate contract). Tax is for a tax accountant, registration for a judicial scrivener, and dismissal or non-renewal cases already in dispute for an attorney. No referral fees change hands.

Frequently asked questions

Q. Is it unlawful to set a contract term longer than the period of stay?
A. The term itself is not automatically unlawful. But work past the expiry is not permitted, and the company risks the offence of promoting illegal work (Article 73-2). If you take the longer-contract design, a reliable deadline-management system outside the contract is the precondition.

Q. Must we set a renewal cap?
A. Setting one is not mandatory. What is mandatory is stating the renewal criteria — and, where a cap is set, stating that cap (Ordinance, Article 5, paragraph 1, item 1-2). If you set none, design with the conversion right (five years total) in view.

Q. How early should we move on the period-of-stay renewal?
A. Filing windows and review periods vary by status and by case, so this office does not give a number. Ask the gyoseishoshi (四葉行政書士事務所 — a separate business) about timing and steps. This office handles the register of deadlines and the contract-side preparation (renewal interviews, written conditions).

Q. Can we consult you about non-renewal?
A. We can take on the design of renewal criteria and procedure. But judging whether a specific non-renewal will hold, once a dispute exists or looms, is attorney work — we point you to an attorney, whom you engage directly. No referral fees change hands.

Sources for this article

• Ordinance for Enforcement of the Labor Standards Act (労働基準法施行規則, Ministry of Welfare Order No. 23 of 1947), Article 5, paragraph 1, item 1-2 (renewal criteria; where a cap on the total period or number of renewals is set, the cap) — current text confirmed on e-Gov on 14 August 2026
• Immigration Control and Refugee Recognition Act (出入国管理及び難民認定法, Cabinet Order No. 319 of 1951), Article 73-2 (promoting illegal work: up to three years' imprisonment or a fine of up to three million yen, or both; paragraph 2 — ignorance is no defence unless without negligence) — current text confirmed on e-Gov the same day
• Labor Contracts Act (労働契約法, Act No. 128 of 2007), Article 18 (conversion to indefinite term) — referenced in the text

This article is general information. The design of an individual contract, and whether a non-renewal will hold, depend on the facts. Judgments that fit your particular circumstances are made by a qualified professional after a meeting. Written by Joji Uramatsu (Shakai Hoken Roumushi (Certified Social Insurance and Labor Consultant), Gyoseishoshi (Certified Administrative Procedures Legal Specialist), Registered Real Estate Transaction Specialist).