The Dark Side of the Construction Industry (Cheap Labor Disguised as Support for Self-Employment)

Hello, everyone.

This is Enta.

I often see phrases like “support for starting your own business” in job postings.

Actually, that thing is...

Support for Starting a Business

There are a lot of crazy things going on.

There are companies that use that approach—especially with young people—to increase their workforce.

This is a common issue in private construction projects in the architecture field where the construction structure and such are vague, but it doesn't seem to happen very often in public projects like ours, does it?

 

If the public sector isn't represented by employees, the construction process becomes very complicated, which is why people tend to avoid it; plus, you can't proceed unless all the necessary paperwork is in order.

However, it seems that some general private construction projects don’t undergo such inspections (though they’re supposed to).

 

"Work here to prepare for going out on your own. Once you've learned the ropes and can handle the work to a certain extent, you can start taking on projects."That's the story.

Naturally, while they’re learning the job, they’re treated as contractors, so they’re not employees.

If you are not an employee, that means you are a self-employed individual.

Scaffolding Worker

Being a sole proprietor means...Take full responsibility myselfIt is necessary.

Young people don't understand things like this, and apparently there are companies that don't make this clear to them.


Let's consider the difference between self-employed individuals and employees (salaried workers).

The Difference Between Employees (Salaried Workers) and Self-Employed Individuals

Employee

  • You are employed by the company and are eligible for a salary, social insurance, and employee benefits.
  • This enables long-term development and skill building.
  • Because we are under command and control, we have little freedom in our work.
  • All vehicles, tools, and other equipment are provided by the company.
  • Even if an accident occurs, the company is generally liable.

Outsourcing (partner companies or sole proprietors)

  • I take on work on a contract basis.
  • Payment for deliverables, construction units, or on a regular (daily) basis.
  • No social insurance or employee benefits costs.
  • As a general rule, they cannot be placed under the company’s chain of command (the scope is defined in the contract).
  • If you cause an accident, it's entirely your own fault.
  • You are responsible for all expenses, including equipment, etc.

New Employees


What's the problem?

 

It's a simple story, but,

I want to find a cheap subcontractor who’s easy to work withThat's all.

For example, we can help that young person get used to being a sole proprietor by providing support for becoming independent.

Of course, since they can't work, we'll set the daily rate at 15,000 yen or so.

We make young people work two days a week, telling them they'll get paid as long as they're working.

 

15,000 yen × 25 days =375,000 yen

"This is your take-home pay!! Isn't that amazing??!!"

That's the kind of thing that gets young people excited.

 

However, in reality,

National Health Insurance + National Pension + Income Tax + Resident Tax

Since I'm a sole proprietor, I have to cover all the costs myself.

If you earn 4,500,000 yen over the course of a year at the above rate, you will be required to pay approximately 800,000 yen.

 

And, of course, you’re responsible for covering the cost of all your own equipment—from harnesses to fall arrest devices.

And above all, you're responsible for the costs even if you cause an accident.

If you don't have insurance here, you're in for a world of trouble.


By the way, here’s a comparison of an annual income of 4.5 million between a self-employed person and a salaried employee

Category Annual Income Social Insurance Premiums Income Tax + Resident Tax Take-home pay
Office Worker 4.5 million Approximately 1.18 million About 210,000 Approximately 3.11 million
Sole Proprietor (No Blue Tax Return) 4.5 million About 650,000 About 510,000 Approximately 3.34 million

Key Points

  • Self-employed individuals earn slightly more in take-home pay (about 200,000 yen).
  • However, for salaried employees, the company covers half of their social insurance premiums, and they receive generous pension and other benefits in the future.
  • While self-employed individuals pay lower insurance premiums, their pension benefits are smaller, and National Health Insurance premiums vary significantly by region.
  • By taking advantage of the Special Deduction for Blue-Form Tax Filing (550,000–650,000), self-employed individuals can further reduce their tax burden.
  • Self-employed individuals are responsible for all their own business expenses

Support for Starting a Business

There really are companies that, when an employee causes an accident, have the company cover the costs for the time being, make the employee sign a pledge, saddle them with debt, and use this to secure cheap labor.

If that happens, the unit price won't go up, and the debt won't go down.

In a way, it's like being kept on a leash.

 

To begin with, in cases like this, the company is liable, so it’s actually a strange situation.

But young kids who don't know any better just sign whatever they're told to.

 

Companies like this have a lot of these self-employed workers on their books, and when there’s no work, they just say there’s no work.

Since craftsmen are not employees, there are no various expenses associated with them.

So, even though they talk about supporting independence, they just use fancy words to exploit people as cheap labor.

That said, young people who don't look into these things are at fault, too.

 

It looks like there will be more companies like that in the future...

I really want young people, in particular, to be careful.

 

People in their 20s who lack both social skills and common sense can’t possibly match the knowledge of adults, so they get easily deceived and end up going down the wrong path.

And since I don't want people to get fed up with this industry and quit, I want to do everything I can to stop that from happening~ (even if it's just my own idea)

I can’t accept that the entire construction industry is being vilified because of a few unscrupulous contractors, and I want the young people of the future to grow up in a solid, reputable environment.

 

While there are certainly some reputable businesses out there, there are also many unscrupulous ones, so I want young people to be careful.

 

See you later.

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.