Talent has no borders. You can find skilled professionals in countries all over the world, including Japan, one of the global capitals of innovation. However, hiring from abroad requires strict adherence to local laws and regulations. Failing to comply can bring on a slew of legal issues. That’s where an EOR comes in.
An Employer of Record (EOR) offers a simple and straightforward way to hire and pay global talent legally. It provides everything you need to compliantly hire and pay employees. Read on to learn all about hiring employees from Japan through an EOR.
Why Hire Talent in Japan?
If you’re looking for employees with a strong work ethic — you may want to consider hiring from Japan. Japanese employees are dedicated to their work and loyal to their employers. They’re punctual, diligent, and all about demonstrating their value at work.
Employees in Japan are also generally polite and humble, which can be attributed to the role that etiquette plays in Japanese culture. This is especially true in corporate settings - where hierarchy is the norm. However, as opposed to the top-down decision-making process that frequently characterizes Western corporate hierarchy, the Japanese hierarchy is centered around teamwork.
Japan also has a strong education system, particularly in science, technology, engineering, and math (STEM) disciplines. In fact, Japanese students consistently score above the worldwide average in assessments conducted by the OECD. As a result, the workforce as a whole is well-educated and highly skilled.
How Can I Legally Hire an Employee in Japan?
If you want to hire talent in Japan on your own, things can get complicated. To hire in Japan, businesses must establish a local entity. The process can be a headache and is only worthwhile if you intend to practice business in Japan long-term.
EORs offer an easy, straightforward way to hire employees from Japan. An EOR, like Borderless, serves as a middle person and facilitates the processes involved in global hiring. EORs already have an entity in place that’s capable of compliantly hiring and paying talent.
What Does an EOR Do?
EORs ensure you maintain strict compliance with local laws and regulations anywhere in the world. They remove the legal roadblocks involved in hiring globally so that you can focus on growing your business.
Hiring laws vary considerably around the world, and it’s critical to comply with them to avoid legal implications. EORs handle the following processes and ensure they’re fully compliant:
- Work visas and permits
- Employment contracts
- Onboarding
- Tax documentation and filing
- Payroll processing
- Employee benefits
- Intellectual property protection
- Termination
EORs handle all of the tedious administrative tasks associated with these processes. They generate compliant employment contracts, collect tax documentation, file it per local laws, etc.
Employee Insurance and Benefits
It’s always important to stay competitive, especially in a tight labor market. An EOR will help you stand out from the crowd with a comprehensive benefits package, including generous health and wellness benefits, time off, financial security, and much more. It will ensure you provide your team members with what they’re legally entitled to and help you attract top talent with attractive offerings.
Vacations and Public Holidays
Full-time employees in Japan are entitled to ten to twenty days of leave per year, depending on how long they have been with their employer. Most employees in Japan are also entitled to take the following public holidays off, with pay.
- January 1 (Observed on January 2): New Year’s Day
- January 9 (Second Monday in January): Coming of Age Day
- February 11: National Foundation Day
- February 23: Emperor’s Birthday
- March 21: Vernal Equinox
- April 29: Showa Day
- May 3: Constitution Memorial Day
- May 4: Greenery Day
- May 5: Children’s Day
- July 17 (Third Monday in July): Marine Day
- August 11: Mountain Day
- September 18 (The third Monday in September): Respect for the Aged Day
- September 23: Autumnal Equinox
- October 9 (Second Monday in October): Health and Sports Day
- November 3: Culture Day
- November 23: Labor Thanksgiving Day
Taxes and Social Security Contributions
Employers are responsible for withholding income taxes from employees' salaries. The primary taxes are income tax (equivalent to federal income tax in the United States) and resident tax (equivalent to state income tax in the U.S.).
In Japan, employers meeting certain conditions must enroll in four types of insurance systems. Worker’s accident compensation insurance is borne entirely by the employer. Employment insurance, health insurance/nursing care insurance, and employee pension insurance are paid by both the employer and employee. It’s important to note that the rates are specific to districts within Japan and slightly higher for residents between the ages of 40 and 64.
An EOR, like Borderless, will ensure you remit payroll taxes on time, every time. With the support and expertise of an EOR, social security contributions are simplified, and taxes are filed accurately and compliantly. So you can cut back on busy work, save time and focus on growing your business.
What Are the Advantages of Going Through an EOR in Japan?
Working with an EOR comes with a range of benefits.
- Saves time and money.
- Minimizes risks and avoids penalties related to non-compliance.
- Cuts back on busy work.
- Helps you attract and retain top talent.
- Expands your talent pool.
- Keeps data safe and secure.
- Keeps you up to date on hiring trends.
These are just some of the ways an EOR can positively impact your business. Sign up with Borderless to explore what an EOR can do for you.
How Do I Choose the Right EOR for Me?
With so many EORs to choose from, it’s important to determine which one suits your individual needs. It’s helpful to keep the following considerations in mind.
- Expertise: Choose an EOR with a history of hiring, onboarding, and managing employees in the countries you want to hire from. Checking this box will help ensure your EOR of choice maintains compliance every step of the way.
- User experience: It’s important to provide your team with an easy-to-use, intuitive EOR platform packed with self-service options. The goal is to integrate it into your team's existing workflow stress-free.
- Support: Turn to EORs with a solid team of experts with a proven track record. Ensure that they’ll be there to lend you support when you need it.
- Security: Keeping your data safe and secure is paramount. This is especially true when working with a globally distributed team, leaving you more vulnerable to cyberattacks. So, choose an EOR that has a robust set of data security standards and protocols.
Borderless: The Employer of Record your Company Needs
Broaden your horizons by hiring global talent. Use Borderless as your global employer of record to expand your talent base and get the most out of your hiring experience. Get in touch and book a demo today.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
