TITLE : HR AND LABOR
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■ HR and labor
▶ Labor Contract
A labor contract must precisely determine key working conditions, such aswages and working hours, and is essential for the protection of the rights ofboth employee and employer
01. Stated Matters
The labor contract must contain wages, work hours, holidays, annual paidleaves, work, retirement allowance, etc. A standard labor contract is provided onthe website of the Ministry of Employment and Labor
02. Employees on Probation
Probationary employment is a type of work that is intended to develop theworking skills or adaptability of a new employee who has formally signed a laborcontract. The Labor Standards Act applies to employees on probation and assuch, there must be justifiable cause where an employer intends to dismiss theemployee.
※ Related law: Article 5 (2) of the Minimum Wage Act, Article 3 of the Enforcement Decree of the Act
DETAIL
Prohibitions on Requiring Applicants’ Personal Information (region oforigin, etc.)
Amended Article 4-3 of the Fair Hiring Procedure Act
A company that employs 30 or more workers on a permanent basis is prohibited from requiring a jobseeker to provide evidence of the following information that is not required for its job performance at the timeof employment (signed into enforcement on Jul. 2019).
• Physical condition (appearance, height, weight, etc.)
• Job-seeker's region of origin, marital status, and property ownership
• Educational background, occupation, and property ownership of the jobseeker's parents, children, andsiblings
▶ Wages
Wages refers to wages, salary, and any other kinds of money or valuables,regardless of how it is referred to, which the employer pays to an employeeas remuneration for work under the Labor Standards Act, the Wage ClaimGuarantee Act, and the Minimum Wage Act. The minimum wage set by theLabor Ministry applicable in 2022 is KRW 9,160 per hour or KRW 1,914,440 amonth when a total 209 hours are worked per month.
01. Payment
Payment of wages shall be directly made in full to employees in currency. Ifotherwise prescribed by statutes or by a collective agreement, wages maypartially be deducted or may be paid by means other than currency
02. Date of Payment
Wages shall be paid at least once per month on a fixed day. This shall not applyto extraordinary wages, allowances, other similar payments, or those wagesprescribed by Presidential Decree. An employer shall pay wages correspondingto work already offered even prior to the payday if an employee requests theemployer to do so in order to cover expenses for childbirth, diseases, disasters,or other cases of emergency (marriage, death, returning home for at least oneweek due to unavoidable circumstances) as prescribed by Presidential Decree.
03. Overtime Work, Night Work, and Holiday Allowance
Employers shall pay 50% or more of the ordinary wage by adding 50% or moreof the ordinary wage for overtime work and an additional 50% of the ordinarywage for night work (work between 10 p.m. and 6 a.m. of the next day). Forholiday work, employers shall pay 50% of the ordinary wage for work of eighthours or less and 100% or more of the ordinary wage if it exceeds eight hours.
▶ Work Hours
Work hours shall not exceed 40 hours a week and eight hours a day, excludinghours of recess. Upon calculating the work hours, any waiting time, etc., spentby employees under the direction and supervision of their employers that isnecessary for the relevant work shall be deemed work hours
01. Maximum Limiton Overtime Work
Under the Labor Standards Act revised in March 2018, companies that employ300 workers or more can extend their working hours by up to 12 hours perweek from July 2018, which makes the maximum weekly work hours 52 hours.From January 1, 2020, it is applied to companies with 50 or more employees,and to companies with five or more employees from July 1, 2021. From July1, 2021 to December 31, 2022, where an employer who regularly employsless than 30 full-time employees makes a written agreement with the laborrepresentative, he/she may extend work hours up to eight hours per week, inaddition to the work hours extended as above
02. Hours of Recess
An employer shall allow employees a recess of not less than 30 minutes in casesof working for four hours, or a recess of not less than one hour in cases ofworking for eight hours, during work hours.
03. Flexible Work Hours System
t is a system for flexible operation of decision-making and arrangement ofworking hours, which can allocate work hours according to the amount of workor left to the choice of workers to operate them flexibly and efficiently.
Work Hours System | Details |
Flexible workhours system | To observe the statutory average work hours for a certain period of time, the work hours of acertain day are extended while the work hours of another day are reduced. |
Selective work hours system | Workers set their working hours including overtime work freely for a period within one month(three months), with the weekly work hours not exceeding an average of 52 hours per week. |
Deemed hours of work outsidethe workplace | When it is difficult to calculate the work hours provided by an employee because he/shecarried out all or part of his/her duty outside the workplace owing to a business trip or anyother reason, it shall be deemed that he/she has worked for contractual work hours |
Discretionary work hourssystem | In the case of work designated by Presidential Decree which requires leaving the methodsof performing work to an employee’s discretion due to the nature of the work, it shall bedeemed that the work has been provided for such work hours as determined by a writtenagreement between the employer and the labor representative. |
Compensatory leave system | An employer may grant employee leaves in lieu of wage payments for extended work, nightwork, or holiday work pursuant to Article 56 of the Labor Standards Act according to awritten agreement that is concluded between him/her and the labor representative |
※ Related law: Articles 51, 52, 57 and 58 of the Labor Standards Act
▶ Holidays and Days-off
01. Day-off
An employer shall guarantee an employee who has continuously worked for certainworking days at least one paid holiday per week on average and also guaranteeholidays as prescribed by Presidential Decree as paid holidays. However, where he/shemakes a written agreement with the labor representative, such paid holidays may besubstituted with particular working days
02. Public Holidays
The regulations on public holidays apply to those who employ five or more full-timeworkers. Under the Enforcement Decree of the Labor Standards Act amended on June29, 2018, private companies are also required to grant paid holidays and substitute publicholidays under the Regulations on Holidays of Government Offices. The regulationswill go into effect on January, 2020 for companies with 300 or more employees andpublic institutions, January 1, 2012 for companies with 30 to less than 300 employees,and January 1, 2022 for companies with five to less than 30 employees
03. Statutory Annual Paid Leave
Every employer shall grant any employee who has worked not less than 80% of oneyear a paid leave of 15 days in the next year. The paid leave days are calculated thereafterby adding one day for every two continuously working years not including the firstone year to the 15 paid leave days. In this case, the total number of paid leave days,including the additional paid leave days, shall not exceed 25 days. Every employer shallgrant any employee who has continuously worked for less than one year one paid leaveday for each month during which he/she has continuously worked. Every employee hasthe right to claim wages as a substitute for unused annual leave days and it is theimprescriptible right even if the right of claim for annual leave terminates. Where anyemployee's paid leave is terminated by time limitation because the employee fails to takehis/her paid leave although the relevant employer has taken the measures falling to urgeemployees to take their respective annual leave, the relevant employer is not liable toindemnify the employee for his/her failure to take the paid leave
▶ HOLIDAYS AND DAYS-OFF
The four major insurances are employment insurance, industrial accidental compensationinsurance, national pension and national health insurance (as of 2021).
Contribution Rates
(as of 2021)
Employmentinsurance | ndustrial accidentalcompensationinsurance | National pension | National Health insurance | |
Employee | 0.8% of the total pay | N/A | 4.5% of thestandard monthlyincome | 3.43% of the standard monthly wage |
Employer | Depends on the type of business |
Long-term health care insurance premium is 10.25% of health insurance premium, and is collected withnational health insurance. In the case of employment stabilization occupational ability development business,the employer pays 0.25 to 0.85% of the total pay, depending on the number of employees.
* Contribution rate of industrial accidental compensation insurance: Refer to website of theMinistry of Employment and Labor www.moel.go.kr
DETAIL
Obligation of Foreign Employees to Subscribe to the Four Major Insurances
Foreign employees must subscribe to national health insurance (application for exclusion from subscription canbe filed if certain requirements are met) and industrial accident compensation insurance, as is the case of theirKorean counterparts, while employment insurance can be subscribed to arbitrarily, depending on residencyqualifications and nationality. Subscription to national pension varies by nationality, depending on reciprocity
▶ HOLIDAYS AND DAYS-OFF
01. Retirement
① Settlement of Payments
When an employee dies or retires, the employer shall pay wages, compensation,and other money or valuables within 14 days of the day on which the cause of suchpayment occurred.
② Issuance of Certificate of Employment
Whenever an employer is requested by an employee to issue a certificate specifyingthe terms of employment, the kind of work performed, positions taken, wagesreceived, and other necessary information, he/she shall immediately prepare anddeliver a certificate based on facts, even after the retirement of the employee.The certificate shall contain nothing other than what has been requested by theemployee.
02. Severance Pay System
① Types
Severance pay refers to an annuity or lump sum paid to workers who providedconsecutive service during a number of years. There are two types of retirementpension reserves-severance pay and retirement pension plan.
② Severance Pay System
It is a system established to pay a retiring worker a pro-rated amount equivalentto or more than the average wage earned for 30 days for each year of his/hercontinuous service by his/her employer
③ Retirement Pension Plan
The defined benefit retirement pension system (DB), defined contribution retirementpension system (DC) and personal retirement pension (IRP) are defined as a systemin which the user reserves the funds of retirement benefits to outside financialinstitutions and pays the reserve as pension or a lump sum upon retirement. Whensubscribing to a retirement pension, the employee can safely receive the severancepay without fear of defaulting after leaving the company, and the user can savetax because the paid reserves are recognized as deductible expenses under theCorporate Tax Act
• Defined Benefit Plan (DB): Retirement benefits shall be multiplied by the length of time(years of service) in which the work is provided in excess of the average wage of 30 days peryear. The level of retirement benefits to employees will be determined in advance
•Defined Contribution Plan (DC): A twelfth of a subscriber’s annual wages or more shouldbe paid as contribution to the subscriber's account. The contribution of the employer isdetermined in advance.
•Individual Retirement Pension (IRP): This is a retirement pension plan established toaccumulate and operate the lump sum paid by a participant or the contributions paid by anemployer or a participant according to the participant's choice in which the amount of thebenefits or contributions is not predetermined.
DETAIL
Introduction of the Retirement Pension System
An employer is required to set a retirement pension plan within one year of the establishment of the business;otherwise, such employer shall be deemed to have established a retirement allowance system. There is nopunishment regulation for not setting up a retirement pension plan, however, the employer who fails to payretirement benefit or retirement allowance shall be punished by imprisonment for not more than three years orby a fine not exceeding KRW 20 million.
※ Article 5, 11 of the Act on the Guarantee of Employees’ Retirement Benefits
▶ Dismissal
01. Justification of Dismissal
Dismissal refers to the termination of a working relationship against the will ofan employee. An employer shall not, without justifiable cause, dismiss, lay off,suspend, or transfer an employee, reduce his/her wages, or take other punitivemeasures against him/her.
① Disciplinary Dismissal
This refers to the termination of working relationship in a disciplinary form where employerand employee cannot continue to maintain their working relationship. The institutioncomprehensively evaluates various circumstances, including disciplinary purposes, businesscharacteristics, workers' duty, non-compliance, and their impact on the corporate order
② Dismissal for Managerial Reasons
This refers to the termination of a working relationship based on urgent managerial needsin order to maintain the existence of a company for management. An employer shall makeevery effort to avoid dismissal and shall establish and follow reasonable and fair criteria for theselection of those persons subject to dismissal and inform them at least 50 days before theintended date of dismissal and consult in good faith with the labor union.
02. Advance Noticeof Dismissal
When an employer intends to dismiss an employee (including dismissal formanagerial reasons), he/she shall give the employee a notice of dismissal atleast thirty days in advance of such dismissal. If the employer fails to give suchadvance notice, he/she shall pay such employee a minimum of 30 days' ordinarywage
03. Written Notice for Dismissal
When an employer intends to dismiss an employee, the dismissal shall becomeeffective only upon a written notice of grounds and timing for the dismissal.
04. Restriction on Dismissal
An employer shall not dismiss an employee during a period of suspension ofwork for medical treatment of an occupational injury or disease and within30 days immediately thereafter. No woman shall be dismissed before or afterchildbirth during a period of suspension of work guaranteed by law and for 30days immediately thereafter
▶ Rules of Employment
01. Preparation andReport of Rules of Employment
An employer employing 10 full-time employees or more should prepare andreport the rules of employment to the Minister of Employment and Labor, andshould also make a report when the rules are altered.
02. Matters to Includein the Rules of Employment
• Matters pertaining to the beginning and ending time of work, recess hours,holidays, leaves, and shifts
• Matters pertaining to the determination, calculation and payment methodof wages, the period for which wages are calculated, the period for payingwages, and pay raises
• Matters pertaining to the methods of calculation and payment of familyallowances
• Matters pertaining to retirement / Matters, etc. pertaining to retirementbenefits, bonuses, and minimum wages
※Related law: Article 93 of the Labor Standards Act
03. Amendment of Rules
An employer shall, with regard to the alteration of the rules of employment,hear the opinion of a labor union if there is such a labor union composed of themajority of the employees, or otherwise hear the opinion of the majority of saidemployees if there is no labor union composed of the majority of the employees.When amending the rules of employment unfavorably to employees, theemployer shall obtain their consent thereto.
04. Effect of Violation
if a labor contract includes any term or condition of employment which fallsshort of the standards of labor as provided for in the rules of employment, suchpart shall be considered null and void. In this case, the invalidated part shall begoverned by the standards provided for in the rules of employment.
▶ Protection of Pregnant Women
01. Maternity Leave before and after Childbirth
An employer shall grant a pregnant woman a total of a 90-day maternity leave(120-day maternity leave, if she is pregnant with at least two children at a time)before and after childbirth. In such cases, at least 45 days (60 days, if she ispregnant with two or more children at a time) of the leave period after childbirthshall be granted
02. Reduction of Working Hoursfor Period of Pregnancy
Where a female employee who has been pregnant for not more than 12 weeksor for not less than 36 weeks requests the reduction of her work hours by twohours a day, the employer shall permit it. However, no employer shall reduce anemployee's wages for reason of reduction of work hours. The employer mayallow her work hours to be reduced to six hours if her work hours are shorterthan eight hours a day
03. Paternity Leave
Employers are required to give a 10 day paid holiday if an employee applies fora leave on the grounds of a spouse's childbirth. However, the claim cannot bemade 90 days after the date of the childbirth.
▶ Work-Family Balance Assistance
01. Childcare Leave
Where a pregnant worker wishes to protect her motherhood or a workerparenting his/her children (including adopted children) eight years old or youngeror in the first or second grade of elementary school applies for temporaryretirement, his/her employer shall grant permission therefor. The period ofchildcare leave shall not exceed one year, and no employer shall dismiss or takeany other disadvantageous measures against a worker on account of childcareleave, or dismiss the relevant worker during the period of childcare leave. Theperiod of childcare leave shall be included in his/her continuous employmentperiod
02. Reduction of Working Hours for Period of Childcare
Where any worker eligible to apply for childcare leave applies for a reductionof working hours in lieu of such leave, his/her employer shall grant it and noemployer shall dismiss, or take any disadvantageous measures against, a workeron grounds of reduction of working hours for a period of childcare. Workinghours after reduction shall be at least 15 hours a week, but shall not exceed 35hours a week.
※ Related law: Article 19 through 19-3 of the Equal Employment Opportunity and Work-family BalanceAssistance Act
▶ Safety and Health
01. Health and Safety Education
A business owner shall regularly educate employees on health and safety in his/her place of business. Where a business owner employs a person for a harmfulor dangerous job, he/she shall specially educate the employee for health andsafety related to the job.
02. Health Examination for Employees
Health examination for employees should be conducted in order to protect andmaintain employee's health. Office workers, other than those directly engagedin sales, shall take the examination at least once every two years while othersshall take it at least once a year.
▶ Irregular Workers
01. Fixed-term Worker
Fixed-term workers refer to an employee who has a fixed contract period, andan employer may hire a fixed-term worker for a period not exceeding twoyears. Where an employer hires a fixed-term worker for more than two years,such fixed-term worker shall be deemed a worker subject to non-fixed termemployment contract. No employer shall give discriminatory treatment to anyfixed-term worker on the ground of his/her employment status compared withother workers engaged in the same or similar kind of work on a non-fixed termemployment contract at the business or workplace concerned
02. Temporary Agency Worker
Temporary agency worker refers to a worker employed by a temporary workagency who works for the dispatched company under the direction andsupervision of the dispatched company in accordance with the terms andconditions of a contract on temporary placement of workers. Jobs permitted fortemporary work agency business shall be deemed appropriate for that purposein consideration of professional knowledge, skills or experience or the nature ofduties and prescribed by Presidential Decree, except for those directly related toproduction in the manufacturing industry.
▶ Prohibition of Workplace Harassment
No employer or employee shall cause physical or mental suffering to otheremployees or deteriorate the work environment beyond the appropriate scopeof work by taking advantage of superiority in rank, relationship, etc. in theworkplace
.01. Protection of Workers
Where deemed necessary to protect employees who suffer or claim to sufferworkplace harassment while investigation is conducted, the employer shall takeappropriate measures for the victimized employees, etc., such as transferringtheir place of work or ordering them a paid leave of absence. In such cases,the employer shall not take measures contrary to the will of the victimizedemployees, etc.
.02. Measures
Where the occurrence of workplace harassment is verified as a result ofinvestigation, the employer shall take appropriate measures for the victimizedemployees, etc., such as transferring their place of work, giving them a lateraltransfer or ordering them a paid leave of absence if the victimized employees,etc., make a request, and without delay, take necessary measures, such astaking disciplinary measures against the perpetrator of workplace harassment ortransferring his/her place of work.
※ Related law: Chapter 6-2 of the Labor Standards Act (Enforced Jul. 16, 2019)
▶ Collective Labor-Management Relations
01. Labor Union
Labor union refers to an organization or associated organizations of workerswhich is formed voluntary, and there is no restriction in its form. Labor unions inKorea are formed generally as an associated organization including an industrialassociated organization, the members of which are unit labor unions in the sameindustry, or a confederation of associated organizations, the members of whichare industrial associated organizations or nationwide industrial unit labor unions.
02. Unfair Labor Practices
The government bans any infringement of users' right to work and guaranteesthe basic right to work under the Constitution through the system of correctingunfair labor practices. Unfair labor practices include: unfavorable treatment ofa worker on grounds that he has joined or intends to join a labor union, etc.;employment of a worker on the condition that he should join a particular laborunion; refusal or delay of the execution of a collective agreement or othercollective bargaining; domination of or interference in the organization oroperation of a labor union by workers; and unfavorable treatment of a workeron grounds that they have participated in justifiable collective activities, or thatthey reported to or testified.
※ Related law: Article 81 of the Trade Union and Labor Relations Adjustment Act
03. Labor Relations Commission
t is an administrative agency established to carry out judgment and coordinationwork on labor relations swiftly and fairly. The Labor Relations Commission shallcarry out duties concerning the correction of judgment, decision, resolution,approval, recognition or discriminatory treatment under the Labor Union andLabor Relations Adjustment Act and the Labor Standards Act, and support forthe mediation or arbitration of labor disputes or the resolution of independentlabor disputes by the parties concerned, investigation, research, educationand promotion related to the performance of such duties. The Labor RelationsCommission has the right to request cooperation from related administrativeagencies and to investigate the case if necessary.
※ Related law: Article 1, 2-2, 22-26 of the Labor Relations Commission Act
04. Labor-Management Consultation
It is a system in which both workers and users consult or jointly decide on variousmanagerial matters for the common good. Companies with a permanentworkforce of 30 or more are required to set up a labor-management councilwhich consists of the same number of members representing workers and users.It usually consists of three or more members but no more than 10.
information
Obligation toHire Persons withDisabilities andPersons ofDistinguishedService to theNation 1. Obligation to Hire Persons with Disabilities Any business owner who regularly employs at least 50 full-time employees shall employ personswith disabilities at a ratio of at least 3.1% of the total number of employees. A business ownerwho employs persons with disabilities (excluding business owners who regularly employ at least50, but not exceeding 100 employees), but fails to meet the mandatory rate for employmentshall pay a contributory charge to the Minister of Employment and Labor each year. ※ Related law: Article 28, 33 of the Act on the Employment Promotion and Vocational Rehabilitation ofPersons with Disabilities, Article 25, 36 of the Enforcement Decree of the Act 2. Persons of Distinguished Service to the NationA public or private enterprise and public or private organization which ordinarily employs atleast 20 persons a day shall preferentially employ persons eligible for employment assistance innot lower than the employment* rate for each enterprise subject to employing persons eligiblefor employment assistance, which is set by Presidential Decree (Appendix 9 of the EnforcementDecree of the Act of the Honorable Treatment of and Support for Persons, etc. of DistinguishedService to the Nation), within the scope of 3 to 8% of the total number of its employees. Anemployer who refuses to employ such persons of employment assistance without any justgrounds after an instruction from the Minister of Patriots and Veterans Affairs shall be imposedKRW 10 million or more of administrative fines.Foreign-invested companies that move into free economic zones may be excluded from theapplication of the obligation to hire persons with disabilities and national meritorious workers,while foreign-invested enterprises that move into free trade zones may be excluded from theapplication of the obligation to hire persons with disabilities. * Related law: Article 33-2, 86 of the Act of the Honorable Treatment of and Support for Persons, etc. ofDistinguished Service to the StateReference: Labor-Management Practice for Foreign-invested Businesses 2020 (KOTRA) |