Introduction
For foreign nationals staying in Japan under the status of residence “Skilled Labor,” the sudden closure or bankruptcy of their employer can create serious anxiety about both their livelihood and immigration status.
This article explains what happens to your status of residence when your company goes out of business, how long you effectively have to find a new job, and what concrete emergency actions you should take, based on Japanese laws and information from public authorities.
What is the “Skilled Labor” status?
The status of residence “Skilled Labor” is defined under the Immigration Control and Refugee Recognition Act as activities to engage in services which require industrial techniques or skills belonging to a special field, based on a contract with a public or private organization in Japan.
Typical examples include foreign cuisine cooks, foreign construction specialists, manufacturers or repairers of foreign-specific products, processors of jewelry, precious metals or furs, pilots, sports instructors, and wine sommeliers.
In official information provided by the Immigration Services Agency of Japan, the English name of this status is “Skilled Labor,” and this is also the term used on residence cards.
In this article, we use both the Japanese name 「技能」 and the English term “Skilled Labor.”
Does your status of residence end immediately when your company closes?
1. Basic rule: “status cancellation system” and the 3‑month rule
Japan’s immigration law has a “status of residence cancellation system.” If a foreign national does not continuously engage in activities corresponding to their status of residence, their status can be cancelled even before the expiration of their period of stay.
For work‑related statuses like “Skilled Labor” and “Engineer/Specialist in Humanities/International Services,” if the person stays in Japan for more than three months without engaging in activities corresponding to their status, the Minister of Justice may cancel the status unless there is a justifiable reason (Article 22‑4, paragraph 1, item 6 of the Immigration Act).
Therefore, even if your employer goes out of business, your status of residence does not become invalid immediately, but if you stay for over three months without working in the Skilled Labor field, the risk of cancellation increases.
2. Whether the termination is employer‑initiated
The closure or bankruptcy of an employer is usually treated as employer‑initiated termination or “dismissal for business reasons.”
The Immigration Services Agency has announced that, for foreign workers who lose their jobs due to reasons beyond their control, such as bankruptcy or business downsizing, they may be allowed to remain in Japan under their current status until the end of their authorized period of stay, and extension may be granted if they are actively seeking new employment.
This means that losing your job because your company went out of business does not automatically force you to leave Japan, as long as you have a genuine intention to continue working and are actively looking for a new job.
Key emergency steps and notification duties
1. 14‑day notification of change of organization
Foreign nationals with work‑related statuses such as “Skilled Labor” must notify the Immigration Services Agency within 14 days when their contract with their employer ends due to resignation, dismissal, or bankruptcy (notification of the affiliated organization, Article 19‑16 of the Immigration Act).
You must submit this notification within 14 days from the date of contract termination or the last day of work.
You can file this notification by:
- In person at a regional immigration services bureau
- Online through the Immigration Services Agency’s electronic notification system.
2. Procedures at Hello Work and public support
At the same time, the Ministry of Health, Labour and Welfare requires employers to notify Hello Work (Public Employment Security Office) when they hire or dismiss foreign workers.
Hello Work provides re‑employment support based on these notifications, so when your company closes you should visit your local Hello Work office and register as a job seeker as soon as possible.
Records of your job search at Hello Work can later be used as evidence of your continuous job‑hunting activities when you apply to extend or change your status of residence at immigration.
Important points while job hunting
1. Continue substantial job‑hunting activities, keeping the 3‑month period in mind
As noted above, staying for more than three months without engaging in activities corresponding to your status may expose you to the risk of status cancellation.
However, ongoing job hunting can qualify as a “justifiable reason,” so it is very important to keep the following records.
- Job‑seeker registration number and consultation records from Hello Work.
- Screenshots or printouts showing registration with private job agencies and online job boards.
- Emails and records of applications and interviews with companies.
- Rejection notices from companies.
By keeping these documents, you can later explain that you were seriously looking for a new job corresponding to your status, which may help immigration authorities decide on your extension or status cancellation.
2. Confirm that the new job fits the “Skilled Labor” category
When you look for a new job, you should not only focus on whether you can get hired, but also check whether the job actually falls under the “Skilled Labor” category.
For example, if you hold a Skilled Labor status as a foreign cuisine cook and you move to a general clerical or sales position unrelated to your skills, you may need to change your status to another category such as “Engineer/Specialist in Humanities/International Services.”
The Immigration Services Agency website provides an official list of activities allowed under each status of residence, so it is highly recommended to review this information before or during your job search.
Sample scenario: closure of a foreign restaurant and job change
The following is a general, hypothetical scenario to illustrate the typical process.
Example:
Person A, a foreign national working as a Chinese cuisine cook at a restaurant in Japan with a “Skilled Labor” status, learns that the restaurant will close due to prolonged financial difficulties after the COVID‑19 pandemic.
A possible course of action for A would be:
- Confirm the contract termination date and submit the “notification of affiliated organization” to immigration within 14 days from that date.
- Register as a job seeker at Hello Work as soon as possible and start looking for a new position.
- Apply mainly to restaurants and hotels serving foreign cuisine or related services that qualify under the Skilled Labor category.
- Keep all records of job applications, interviews, and consultations with Hello Work as proof of continuous job‑hunting activities.
- If the period of stay is approaching its end and no new job has been secured, consult immigration about a possible extension of stay or a change of status.
In this way, “14‑day notification,” “job‑hunting records,” and “matching the job with the Skilled Labor category” are the key points after your employer goes out of business.
Possibility of changing to another status or “Designated Activities”
For foreign nationals who have lost their job due to bankruptcy or similar reasons, the Immigration Services Agency may allow a change of status to “Designated Activities” for job‑hunting purposes.
If the expiration of your current period of stay is near but you wish to continue your job search in Japan, you may consider applying to change your status to “Designated Activities (job‑seeking).”
The period of stay for this Designated Activities category is generally one year, and in some cases it may be extended up to two times, depending on individual circumstances and the progress of job hunting.
If your new job will not fall under the Skilled Labor category, you may need to change your status from “Skilled Labor” to another category, such as “Engineer/Specialist in Humanities/International Services.”
Summary
Even if your employer goes out of business, your “Skilled Labor” status of residence does not become invalid immediately, but staying in Japan for more than three months without engaging in corresponding activities can increase the risk of cancellation.
After termination, it is crucial to submit the 14‑day notification of change of affiliated organization, register at Hello Work, actively use public re‑employment services, keep records of your job‑hunting activities, and secure a new job that fits the Skilled Labor category as early as possible.
If the expiration of your period of stay is approaching, changing your status to “Designated Activities (job‑hunting)” or to another appropriate work‑related status may be an option, so checking official information from the Immigration Services Agency and consulting a professional can greatly help you navigate this difficult situation.
