Nov 28, 2013

Status of Interns Under the Korean Labor Standards Act: Employees Entitled to Severance/Minimum Wage?

Interns in Korea may be considered Employees under the Korean Labor Standards Act, thus, entitling the interns to minimum wage, severance and the numerous other protections and benefits under the Act.   The matter is having an impact on franchises, entertainment companies, and other SMEs.

The, incredibly vague, Employment & Labor Ministry Guideline 826 (April 7, 2009) notes, in part, that:
If a person is considered an employee under the Labor Standards Act shall be determined by considering the subordinate relations with the employer collectively - with regard to the details of job, supervision by the employer, disciplinary actions, capability to ignore work orders and the type of wages paid, etc.  In cases when students provide work to an employer to gain academic credit with no promise to hire via a academic-industrial cooperation agreement, even though the agreement contains working hours, a stipend, social insurances, etc. the students are, generally, not considered employees.  However, in evaluating the employment contract made with a company, if the work is essentially similar to the provisions of the labor service, and conducted under the supervision of an employer, the trainees can be considered employees. 
The Guideline contains little specific guidance.  However, courts have been pragmatic and, typically, interns that are hired for a few month period of time shortly after graduation for university are considered mere interns. 

The fear we have and that is, already, showing its ugly head is that less internships will be available.  Many of us began our careers as interns and proved our worth through these internships.  We may have never got our foot in the door without these internships.  Hopefully, this reality with be consistently reiterated by the attorneys litigating these cases and Labor Scrivener/Paralegal (노무사) will push this issue at the Labor Boards.   
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Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team and Entertainment, Media and New Tech Law Team at IPG Legal.   He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.  He assists clients in their contentious, non-contentious and business developments needs in Korea and China.