The easy guide to employee background checks in Japan

Background checks are a vital tool for employers looking to verify a candidate's abilities and safeguard their workplace from potential crimes. In Japan, however, conducting these checks can be daunting, as the country has strict legislation in place to protect its citizens' privacy.

Employers must navigate a complex web of regulations, including the Employment Security Act and guidelines established by the Minister of Health, Labor, and Welfare. Failure to adhere to these rules could result in hefty fines, making it essential for HR managers to know exactly what's permitted and what isn't under Japanese law.

This article will provide you with a comprehensive guide to navigating the country's strict privacy laws and help conduct thorough background checks in Japan confidently.

Table of Contents

• Are you legally required to run background checks on Japanese employees?
• Is it legal to run background checks on Japanese contractors?
• What types of background checks do businesses commonly run on Japanese employees and contractors?
• What types of background checks are illegal in Japan?
• When should you conduct Japanese employee background checks?
• The easiest way to run a background check on a Japanese employee or contractor
• Background check mistakes to avoid in Japan
• Frequently asked questions about background checks in Japan

Are you legally required to run background checks on Japanese employees?

No, it isn’t mandatory to run an employment background check in Japan.

Japan places great emphasis on the privacy rights of its citizens and discourages companies from screening their candidates. Nevertheless, companies can still conduct background checks by obtaining subpoenas or court orders authorizing them.

To conduct a background check on a potential employee, you must clearly identify and communicate the purpose behind personal information collection and obtain their written consent beforehand. This includes access to personal information, criminal records, employment history, civil records, and educational qualifications that are relevant to the position.

Note that you should use this information for legitimate purposes only and ensure the confidentiality of the candidate's personal information.

In addition, Japan has a few pieces of legislation in place to govern the screening process in the country.

Here are five laws employers must comply with before running a background check on Japanese employees:

• Labor Standards Law 1947, Chapter 1 and Article 3
• Personal Information Protection Law (PIPL)
• Welfare (MHLW) in 2000
• Act on the Protection of Personal Information (APPI)
• Human Resource Development in High-level IT — Ministry of Economy, Trade, and Industry (METI)

Rippling makes it easy to run background checks in Japan.

Is it legal to run background checks on Japanese contractors?

Conducting international background checks on contractors is not illegal in Japan, but you need their explicit permission to do so while ensuring compliance with federal laws. Japanese employment and privacy laws prohibit employers from seeking personal details, and criminal and litigation records without consent.

Although all the above screening methods are allowed, some have strict requirements and may only be used under specific circumstances. These include personal information checks, criminal record checks, credit and financial checks, medical record checks, inquiries into political views, drug testing, fingerprinting, and investigating union membership.

Here are the most common background checks in Japan in more detail:

• Personal information: The candidate's personal information, such as their residential address, marital status, and family history, is stored in the Koseki family registry and Juminyo residence records in Japan. Access to this information is strictly confidential; you’ll need to state a clear legal purpose to get access.
• Professional history and education verification: Accessing employment and educational records can prove to be a challenging task in Japan, given the country's stringent background check and privacy laws. Universities in Japan have the right to withhold personal information without the candidate's written authorization. Similarly, companies may choose to ignore requests for employment records of their former employees.
• Criminal records: Confidentiality laws in Japan keep criminal and civil court records away from the public eye, except for Supreme Court records. In order to conduct background checks on potential employees, many screening services specializing in this field maintain a proprietary database with collected information on legal proceedings. They also scour the news media to uncover any relevant information.
• Credit/financial checks: The National Gazette provides a publicly available database for bankruptcy-related searches in Japan. Note that the records only list the full name and address of the individual, so you’ll have to furnish the candidate’s complete residential address to run a perfect search. Sieger records are also listed on real estate property records at the Legal Bureau, but again, you need to provide a complete residential address.
• Assets: Obtaining information about a candidate's assets from the relevant ministries requires a subpoena from the Bar Association or a court order. However, if the candidate owns more than 5% of shares in a public company, such information can be found in the public domain.
• Reference checks: You can contact any reference provided by the candidate to ask standard, non-invasive questions related to the candidate’s abilities.
• Work authorization: You can ask the candidate for proof of citizenship or a work visa as proof that they are legally allowed to work in Japan.
• Credit reports: Most employers don’t look for a candidate's credit reports when hiring in Japan. But if you want to verify the candidate’s identity and background, you can consider it.
• Social media profile and internet search: You can look up a candidate’s social media profiles and online presence to get a sense of their character and find out if they exhibit any warning flags that should disqualify them for the position.
• License verification: Depending on the position, you can verify if the candidate holds the required professional licenses, such as teaching certification or medical license. For instance, if the role involves driving, you can access the candidate’s driving records through a driver’s license office to check the candidate’s license validity and whether there are any claims against it.
• Drug and alcohol testing: If you have pre-employment drug testing as part of your due diligence or candidate screening process, you can conduct a drug and alcohol test. But you’ll need the candidate's written permission to go ahead.
• Medical records: If a potential employee requests accommodations or adjustments based on a disability or medical condition, you can request them to provide a doctor’s note.

What types of background checks are illegal in Japan?

Aside from the above background checks, all other types of background checks are prohibited in Japan. If you don’t see something on our table, consider it against the law.

But to give you more perspective, the Ministry of Labor has guidelines that say certain personal information cannot be collected, except in special cases where it's necessary for business purposes and the employee is informed. This includes information that could lead to social discrimination, like race or family origin, or information about an employee's beliefs or labor union participation.

In addition, the Ministry of Health, Labor and Welfare also prohibits employment discrimination on the following 14 matters:

• Domicile and place of birth
• Family matters, such as occupation, relationships, health, etc.
• Housing situation, including room coverage and type of residence
• Living environment and home environment
• Religious beliefs
• Political party affiliation
• Life philosophy, creed, and beliefs
• Matters related to dignified persons
• Thoughts and personal opinions
• Labor union membership and social involvement
• Preferred publications like newspapers, magazines, favorite books, etc.
• Background checks
• Use of custom application forms
• Medical exams required during the hiring process

When should you conduct Japanese employee background checks?

In Japan, background checks on potential employees are often carried out during the pre-employment screening process, usually after a conditional job offer has been made. Also, these verifications can only be carried out if the job offer is contingent on the successful completion of the background check.

Moreover, you should provide a written notice to the candidate informing them that a background check will be conducted, and obtain their prior written consent beforehand to avoid any miscommunication and comply with the Japanese laws and regulations.

The easiest way to run a background check on a Japanese employee or contractor

There are several different companies that can run background checks on employees in Japan, including Rippling, Use Multiplier, and Info Cubic. The easiest by far is Rippling because background checks are directly integrated into the onboarding flow.

Just enter basic hiring info like salary and start date, and Rippling will send the offer letter and new hire paperwork—and automatically run a legally compliant background check and e-verify the results. See Rippling today.

Background check mistakes to avoid in Japan

• Assuming the Japanese laws forbid background checks. After the Personal Information Protection Act was implemented, many employers assumed Japan had made background checks illegal. That’s wrong; you can ask for information, as long as you have permission from the candidate and have ensured compliance.
• Doing background checks without employee consent. Japan has strict privacy laws, under which you’re mandated to obtain written consent from applicants before running any type of screening. You have to be upfront about the third-party background check services you’ll share their information with, what data they’ll use to run the screening process, and why.
• Rushing the background screening process. In the US, you can easily access most certain records online, while in some APAC countries, you can also fax over confirmation letters. This isn’t the case in Japan, and you need to be prepared for a longer screening process. In addition to the limited availability of public record information (criminal background checks, credit checks, court-based checks), even educational institutions have differing policies. For example, some universities require employers to complete specific forms, while others may require a call from the candidate.
• Not complying with federal law when asking candidates to furnish personal or professional documents. You need power of attorney from potential new hires for various disclosures, as Japan considers past employment records and personal data confidential on the grounds of protection of labor rights.
• Skipping the background check. With the complex rules and regulations involved, conducting background checks on new hires from different parts of the world may seem challenging. But ignoring this crucial step altogether can put your company at grave risk. Background checks play a vital role in the onboarding process and ensure the safety and security of your company. Background checks play a vital role in the onboarding process and ensure the safety and security of your business and personnel.

Rippling makes it easy to run background checks in Japan.

Frequently asked questions about background checks in Japan

Are background checks legal in Japan?

Yes, it's legal to run background checks in Japan.

Certain background checks are allowed and frequently used, but there are specific instances where conducting them is only permitted under strict conditions. Employers need to decide if a background check is really necessary and consider the potential consequences if someone challenges it and seeks compensation.

How do privacy and labor laws in Japan impact background checks?

In Japan, privacy laws and labor laws are designed to protect the privacy and rights of citizens. Naturally, they have a significant impact on how background checks get conducted.

For instance, under the Personal Information Protection Act (PIPA), employers need explicit consent from candidates before conducting a background check that includes personal information. The law also sets forth requirements for handling, storage, and sharing of that information. Failure to comply with these requirements can result in penalization and hefty fines.

Similarly, labor laws like the Labor Standards Act (LSA) prohibit employers from discriminating against candidates based on their race, ethnicity, nationality, gender, age, and disability. This prevents companies from using certain types of personal information in the background check process. For example, they cannot ask about a candidate’s religious beliefs, sexual orientation, or family status.

Additionally, the LSA limits the types of information employers can request from candidates, only allowing them to request information directly relevant to the job.

Are there different laws for running background screenings on existing employees in Japan?

No. In Japan, regardless of whether the person in question is a job applicant or an existing employee, the same principles and laws apply to conducting background checks.

Do the rules for background checks differ for full-time, part-time, and contingent Japanese workers?

No, there are no differences between doing background checks for full-time, part-time, and contingent workers in Japan.

Are there sector-specific background check requirements in Japan?

Restrictions on background screenings generally do not differ by industry or sector. That said, some background checks are only allowed under specific circumstances.

For example, if an employer intends to hire a new employee to handle finances, they can do a screening for their credit records and financial status.

Can employers hire a third-party vendor in Japan to conduct background checks?

Yes, employers can outsource background checks to a third-party vendor under an outsourcing arrangement—provided the information being collected is generally permissible under Japanese law, such as the candidate’s education, work history, and social media and internet presence. Background checks of sensitive information cannot be outsourced.

Generally speaking, all employers are required to:

• Clearly state the purpose for which the information will be used;
• Use the information only for the purpose stated, unless they get consent from the individual;
• Correct or delete any inaccurate information when requested;
• Clear or remove the information once it's no longer needed for the stated purpose;
• Take necessary measures to ensure the collected information's security; and
• Provide oversight and supervision of all staff and vendors who have access to the information.

What documents can you request prospective Japanese employees to produce as part of the screening process?

Here are some of the standard documents employers can ask for to ensure a thorough vetting process:

• Full legal name
• Permanent and temporary address
• Date of birth as per official documents
• Educational qualifications, including degrees, mark sheets, and certificates (as relevant to the role)
• Japanese citizenship certificate (or visa details for foreign applicants)
• Financial documents, such as bankruptcy records
• A clear photograph of the candidate

What are the benefits of running background checks in Japan?

Employers are increasingly relying on background checks to make informed hiring decisions. Some of these advantages are:

• Enhanced security: Conducting background checks helps employers identify potential job applicants who could pose a risk to the company or its employees.
• Eliminates negligent hiring risks: Companies may face legal liability for hiring employees who engage in misconduct, which can damage the company's reputation. Background checks enable employers to identify past misconduct and mitigate this risk.
• Quality talent: Background checks help employers verify candidates are who they say they are and that their qualifications and work history are accurate. They can filter out candidates with discrepancies or inconsistencies in their backgrounds.
• Protection from occupational fraud: Background checks help employers identify dishonest job seekers and protect the company's reputation from fraudulent activity.

Onboard new hires and run background checks with Rippling

With Rippling's Talent Management System, you can seamlessly onboard new hires and set them up for success. Just enter basic hiring info like salary and start date, and Rippling does the rest—including running a legally compliant background check.

Ready to hit the ground running with every new hire? See Rippling today.

Rippling and its affiliates do not provide tax, accounting or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.