Hiring Staff and Labor Law — Basic Rules for a New Company

When hiring employees, a new company faces obligations such as registering with Hello Work, mandatory documents like a working-conditions notice, choosing an employment form (regular employee versus 業務委託), and specifics of taxing part-timers and commuting allowances. For the Business Manager visa, it matters that an employee's skills match the company's stated profile. Registering with Hello Work (the labor ministry) means the company itself registers, and then each hired employee is registered separately, except for officers/directors (役員), who are not counted as 社員/regular employees. When hiring a foreigner by the hour, registration with Hello Work is formally required, though in practice many private companies skip this. Work rules (就業規則) are only mandatory once staff reaches roughly 5–10 employees. A "notice of working conditions" (労働条件通知書) is a separate mandatory document at hiring time; templates are provided by the labor ministry (cloudsign.jp/media/working-conditions-2024/). The 業務委託 employment form (an independent contractor, similar to a freelance arrangement) is an option that removes the employer's tax, pension, and insurance obligations for that worker; it is worth checking the Freelancer Act (フリーランス新法). For a business visa, it matters that an employee's skills match the company's stated profile — an IT company can hire an engineer but not a cook. For a Highly Skilled Professional hired through the company, an annual salary of 10 million+ yen is preferable. Regular commuting compensation raises the income base used for social-insurance and local-tax calculations, but is not subject to income tax itself (非課税所得; nta.go.jp/taxes/shiraberu/taxanswer/shotoku/2011.htm, /gensen/2582.htm). Irregular commuting costs (a business trip) are a pure company expense. Any change to the commuting allowance amount needs to be recorded on forms for the tax office and the labor office. For part-time workers' income tax, if someone works fewer than 20 hours a week and earns under 80,000 yen/month, the company is theoretically not obliged to withhold tax — but in practice the local ward office sometimes still sends a bill anyway, depending on the municipality and how officials interpret the rule. Source: https://www.cloudsign.jp/media/working-conditions-2024/ — Labor ministry templates for the notice of working conditions (労働条件通知書). Source: https://www.nta.go.jp/taxes/shiraberu/taxanswer/shotoku/2011.htm — Official NTA explanation of tax-exempt commuting-allowance compensation.