[Blog]The Growing Importance of Compliance in Hiring Foreign Talent

2025-11-11

Across the world, governments are tightening rules and increasing compliance requirements related to immigration and employment of foreign nationals. For example, the UK has recently introduced additional fees and stricter compliance expectations for employers that sponsor foreign workers. A useful overview can be found in the article "UK immigration fees and compliance: what employers need to know now". Although this article focuses on the United Kingdom, the key message is universal: compliance expectations for companies employing foreign nationals are increasing globally. Japan is no exception.

Compliance Expectations Are Already Visible in Japan

Japan has multiple residence statuses, each with its own set of rules and obligations. Among these, the “Technical Intern Training” (技能実習) program is particularly notable because it legally requires external audits and oversight of both supervising organizations and host companies. This system was designed to ensure that foreign workers are not exploited and that appropriate working and living conditions are maintained. In other words, the responsibility for protecting the well-being of foreign workers lies not only with the worker, but also with the company and its supporting institutions.

However, this need for oversight is not limited to the Technical Intern Training system. As more companies hire under statuses such as “Specified Skilled Worker,” “Engineer/Specialist in Humanities/International Services,” and even under “Dependent” with work authorization, immigration authorities are increasingly checking whether companies provide fair and compliant employment conditions. This trend is expected to continue.

Why Internal Compliance Systems Matter

Most issues in foreign employment do not arise from intentional wrongdoing, but from misunderstandings or lack of familiarity with the immigration system. Common examples include job duties that do not match the permitted activities, unclear overtime practices, failure to submit required notifications, or discrepancies between contract terms and actual working conditions. Even small inconsistencies can cause problems at the time of renewal, permanent residency applications, or family-related procedures.

This is where an internal compliance framework becomes valuable. Here, “internal audit” does not mean financial auditing. It simply means: ensuring that the company regularly checks whether its employment of foreign nationals is carried out appropriately. Some practical examples include:

• Keeping accurate records of residence status and permitted activities
• Confirming periodically that job duties match the authorized scope
• Ensuring that actual working conditions match written agreements
• Submitting required notifications when any changes occur

Even these basic steps can significantly reduce compliance risks.

Internal Compliance Is Not Complicated

Some companies assume that compliance systems are only for large corporations, but in reality, small and medium-sized businesses can implement them effectively. In fact, smaller organizations often benefit more directly from having foreign employees who settle well and contribute long-term. Establishing simple and clear internal processes protects both the company and the employee.

Conclusion: Hiring Foreign Talent Is an Investment

Hiring foreign nationals is not just about filling labor gaps. It is about building a workplace where people with diverse backgrounds can contribute effectively. To achieve this, companies must combine appropriate support for the employee with a clear understanding of immigration requirements and internal compliance practices. As global and domestic expectations for compliance continue to rise, now is the ideal time for Japanese companies to strengthen internal monitoring systems related to foreign employment. Doing so helps ensure a stable working environment, smoother renewals, and stronger organizational trust and sustainability.