This article is written by a Japanese local.
In the IT industry, “On-Site Assignments” (SES: System Engineering Service), where a company stations its own engineers at a client’s office to conduct system development or maintenance, is an extremely common business model.
However, when the personnel involved are foreign engineers holding the “Engineer/Specialist in Humanities/International Services” work visa, blindly applying the gray customs of the industry poses a fatal risk to the company. If there is even the slightest error in the choice of contract type or the “locus of command and orders” on-site, the company will unknowingly commit a violation of the Immigration Control Act (the crime of promoting illegal labor).
This article thoroughly explains the strict legal boundaries regarding on-site assignments for foreign IT engineers and objective contract structuring approaches to prevent visa renewal denials or the revocation of residence statuses.
1. 3 Contract Types and the Legal Boundary of “Command and Control”
To legally operate on-site assignments, the contract type formed between the companies must perfectly align with “who gives instructions to the engineers on-site (the locus of command and orders).” A contradiction here creates the greatest legal risk.
- Worker Dispatch Contract: A structure where you dispatch your engineer to the client company, and the client’s representative directly issues work instructions (command and orders). *Obtaining a “Worker Dispatch Business License” for your company is an absolute requirement.
- Contracting Agreement (Ukeoi): A contract aimed at completing a system or delivering a final product. The method of work and the authority to command the engineers lie entirely with the employer (your company). It is illegal for the client to give direct instructions.
- Quasi-Mandate Contract (SES): A contract aimed not at a final product, but at providing technical services or executing tasks for a certain period. Like a contracting agreement, the command authority remains with the employer (your company), making direct client instructions illegal.
2. The Chain of Visa Renewal Denials Caused by “Disguised Contracting”
The most frequent legal trouble in IT on-site assignments is “Disguised Contracting (Giso Ukeoi).” This refers to a situation where the written contract is an “Outsourcing Agreement (Contracting/Quasi-Mandate),” yet the reality on-site is that the client company directly issues “work instructions (commands)” to the foreign engineer.
Disguised contracting is a violation of the Worker Dispatching Act and the Employment Security Act, but for foreign engineers, it directly leads to severe issues under the Immigration Control Act. If the Immigration Services Agency determines during screening that the engineer is “not in a legal working environment (i.e., forced to work in an illegal disguised contracting state),” the next work visa renewal for that engineer becomes extremely difficult, and in the worst case, the residence status is subject to revocation. The company also bears the risk of being barred from hiring foreigners in the future for having promoted illegal labor.
3. The Risk of Unpermitted Activities via “Simple Labor” at the Client Site
The Engineer visa is a status of residence granted only for duties that require “highly professional and intellectual knowledge acquired at a university, etc.,” such as programming, requirements definition, system design, and network construction.
While you can control the job duties for in-house development projects, in on-site assignments, there is a constant risk that the engineer may be reassigned to the following types of duties that differ from their primary role, depending on the client’s convenience or project status:
- Manual-based system testing that anyone can do (debugging only)
- Simple data entry work into Excel, etc.
- Physical transportation, packaging, and cable wiring of PC equipment or servers
- General call center duties that do not require IT knowledge
Even if your company is an IT firm and the job title on the employment contract is “System Engineer,” if the actual main duty at the on-site assignment is simple labor like the above, it constitutes an “Activity Other Than That Permitted (Illegal Labor).”
4. Objective Proof Approaches for Legally Operating On-Site Assignments
To safely and legally assign foreign engineers on-site, it is essential not to be swayed by industry customs, but to clearly separate contracts according to the reality of the site and build evidence to prove this objectively.
① Obtaining a Dispatch License and Enforcing Dispatch Contracts
If the client company wishes to, or the site requires them to, give direct work instructions (commands) to the engineer, you must conclude a “Worker Dispatch Contract.” To do so, your company, as the employer, must possess a “Worker Dispatch Business License.” Dispatching without a license is immediately illegal.
② Establishing an Independent Execution Structure in Outsourcing (SES)
If you are assigning them under a legal “Outsourcing Agreement (SES)” without a dispatch license, the principle is to station your own person in charge (project leader) on-site. You must completely eliminate the suspicion of disguised contracting by building an “independent task execution structure,” where the leader receives all requests and instructions from the client, and the leader allocates the work to the foreign engineers. If an engineer is stationed alone, you must keep records proving a clear task management structure from your company using chat tools, etc.
③ Prior Auditing and Documentation of On-Site Duties
Before signing the contract and starting the assignment, carefully examine the specific job duties at the client’s site and ensure they match the high level of expertise required for the Engineer visa. During a visa renewal, Immigration will require the submission of a “Detailed Explanation of Job Duties at the Dispatch/Assignment Site” and “Copies of Contracts Between Companies.” It is crucial to preserve objective documentation proving that simple labor is not included.
5. Conclusion: Gray Customs Do Not Work in Immigration Law
When handling foreign IT personnel, the gray customs specific to the IT industry—such as “It’s fine because other companies use this contract too” or “It hasn’t been a problem before”—will not work at all in strict Immigration screenings.
If illegal labor or disguised contracting is discovered even once, it not only ruins the company’s credibility but also strips the foreign engineers working there of their careers and lives. Strictly auditing your business model from both immigration and labor law perspectives, and building a structure where all contracts and actual working conditions can be objectively proven, is the only approach to protect both the corporation and the foreign talent.