News and developments
New President-Elect’s Labor Policy Outlook
On 9 March 2022, Suk-Yeol Yoon was elected as the 20th president of the Republic of Korea. As one of the central components of his campaign platform, the president-elect advocated various policy changes and reforms that could have significant impacts on the employment and labor laws in Korea.
We summarized some of the key policy proposals of the president-elect in regards to the employment and labor laws of Korea.
| Areas | Summary of Policy/Program | Impacted Statute |
| Protection for Proprietors and Platform Workers | New legislation to provide statutory protections (e.g., fair rules of contract) to protect the fundamental rights of employees across a wide array of engagement structures, including ‘platform workers.’ Platform workers refer to individuals working for online platforms – typically under freelance contracts – to service the platform’s users.
Government-sponsored support system for proprietors and platform workers including job training and outplacement services Government-sponsored business support programs for aspiring proprietors | N/A |
| Protection for Young, Temporary Workers | Additional statutory protection for young temporary workers’ rights and legal recourse (「Youth Employment Protection Act」
New system designed to provide consultation service and relief for young workers whose rights/entitlements (e.g., unpaid wage, paid leave) have been infringed upon | 「Labor Standards Act」, etc |
| Fairness in Hiring Practice | Expansion of the current 「Fair Recruitment Procedure Act」 to impose substantive additional requirements to ensure fairness in hiring practice
Overhaul of hiring procedures and requirements to address fairness concerns regarding potential preferential treatment for government-issued license holders Invalidation of any provisions/clauses in collective bargaining agreements fostering unfair hiring practice (e.g., hiring a child of long-tenured employees or retired employees) Invalidation of hiring/recruitment attributable to nepotism or favoritism (e.g., a succession of employment or hiring based on family connections) Establishment of a hiring-irregularity reporting center within the Anti‑Corruption and Civil Rights Commission to facilitate the monitoring of and investigation into hiring irregularities and incentivize reporting thereof | 「Fair Recruitment Procedure Act」 |
| Work Hour Flexibility | Expansion of the selective work hours system by (a) extending the evaluation period (i.e., the base period during which the average work hours are calculated) from the current 1-3 months up to 1 year, thereby providing employers with greater flexibility over work hours, including adopting a possible 4-day workweek, because employers will have a longer period to meet the 52 work hours/wk average.
Introduction of an annual work-hour savings account from which employees can ‘deposit’ extra work hours and ‘withdraw’ their accumulated balance in a form of long-term vacation Reform of the existing daily workhour restrictions in favor of a statutory cap on cumulative overtime hours Granting employees the right to request for conversion from full-time to part-time without risking their permanent employee status Creation of a new statutory exemption for startup businesses that would exempt them from overtime work hours regulations and limits Exemption for licensed professionals and high-salary employees from work hour regulations (including the statutory overtime pay) | 「Labor Standards Act」 |
| Wage System Reform | Reformation of the current wage system to provide greater focus on merit, work value, and job performance
In case of disagreement regarding wage structure within different classes or positions, allow employers to sign an agreement with an employee representative to decide upon a wage structure for a specific class or position Mandating for public disclosure of wage information per job category | N/A |
| Expanding Paternity Leave and Childcare Leave Period | Increasing the maximum childcare leave period from current 1 year per parent to 1.5 years per parent
Introduction of an incentive for businesses to adopt the remote-work practice for childrearing employees Expansion of the paternity leave entitlement from the current 10 days to 20 days Expansion of the selective work hours systems to employees who are unable to work remotely and prioritize childrearing employees with the right to select working hours | 「Gender Equal Employment and Work-Life Balance Support Act」
「Labor Standards Act」 |
| Labor-Management Relations | Strengthening of the Labor Relations Commission’s mediation function by (a) appointing a labor-management expert to lead mediation proceedings and (b) establishing a mediation committee to handle long-term labor-management disputes
Requirement for a labor-management council’s employee-representative to be voted directly by employees Adoption of a time-off policy for union officers at government officers’ unions and teachers’ union Imposition of strict sanctions against unlawful labor practice (e.g., failure to acknowledge union, unauthorized occupancy of the workplace, use of violence) | 「Labor Union and Labor Relations Mediation Act」 |
| Industrial Accident Prevention for High-Risk Industries | Budgetary and technical support for industrial accident prevention in high-risk areas (e.g., small businesses, construction sites)
Promotion of a mutually beneficial system where large-sized businesses can utilize their resources and technological expertise to help smaller contractors reduce the risk of workplace accidents Support for businesses to adopt fourth industrial revolution technologies (e.g., wearable devices) to prevent industrial accidents | 「Industrial Accident Compensation Insurance Act」
「Serious Accident Punishment Act」 |
| Reform Career Support Policies | Provision of a comprehensive, tailored service for jobseekers based on their life stage using artificial intelligence and database
Provision of a comprehensive, tailored service for small-to-medium-sized businesses to promote job growth (e.g., support for additional hiring, improve job quality, vocational training, workplace reform, support to digitalize workplace) | 「Employment Security Act」
「Small and Medium Enterprises Promotion Act」 |
|
Individualized Job Training | Expansion of vocational training support programs for senior citizens in partnership with private sector businesses
Construction and operation of additional vocational training facilities for disabled jobseekers across the country Creation of a career-management platform for obtaining job training Assigning career advisor(s) for employees working in small-to-medium-sized businesses to provide relevant information, career-planning services as well as aptitude evaluation services
| 「Employment Security Act」
「Disability Employment Promotion and Vocational Rehabilitation Act」
「Prohibition against Age Discrimination in Employment and Elderly Employment Promotion Act」
「Small and Medium Enterprise Workers Welfare Promotion Act」 |
| Expanded Eligibility for and Amount of Earned Income Tax Credit | Expansion of the scope of eligibility for earned income tax credit (EITC) by adjusting the current income threshold by 20%
Increase of the maximum payment amount by 10 to 20% | 「Restriction on Special Taxation Act」 |
Potential Impact on Your Business
Looking back at the past elections, a change in administration was often followed by new policies and initiatives in the employment law landscape (including the 52-hour workweek policy under the current administration), resulting in significant changes to Korea’s work environment and employer practices. Similarly, President-elect Yoon’s labor policy proposals – e.g., greater flexibility in work hours, expanded childcare leave, fair hiring practice – are anticipated to have a tangible impact on the day-to-day practices of businesses. It is important to continue monitoring the legislative movements and assess the impacts and implications of the possible legislative changes.
Some of the policy proposals in particular, such as the proposed additional protections for youth employment and platform workers, and measures to ensure fairness in hiring practices, are closely related to the new administration’s ‘fairness’ initiative and may affect existing labor-management dynamics as well as recruitment practices of Korean businesses. While the new administration’s plans may impose additional obligations on employers, it is worth noting that they may also introduce greater flexibility for employers, especially with regard to work hours management (e.g., lengthening the evaluation period for the average weekly work hours to 1 year to ease the burden of satisfying the 52 hour workweek).
If you have any questions regarding this article, please contact below:
Sang Hoon LEE ([email protected])
Chang Soo JIN ([email protected])
Hyunseok SONG ([email protected])
William KIM ([email protected])
Se Young Kang ([email protected])
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