The factors a Korean Court will, typcially, look at to determine if one is an “employee” are:
- Does the company have decision making power over the content of work of the individual?
- Are company rules of employment applied to the individual?
- Does the individual have business risks associated with working with company?
- Does the company substantial control over the work processes of the individual?
- Does the company set the time and date and other specifics of work of the individual?
- Does the company own the work assets of the individual?
- Can individuals use a third party to replace the work of the individual?
- Are earnings based on work – not success/sales?
- Does individual near exclusively depend on the work from the particular company?
- Is the work with the company continuous,thus, not temporary?
- Is the individual deemed an employee under the Social Security System?
The “independent consultant,” also, when explained the reality – finds this type of arrangement more advantageous. Normally, having a business, allows, tax benefits for the independent consultant.
We have written a good deal on this blog on distribution agreements in the past. Please take a look at these, below, articles for more details on doing business in Korea, Korean employment law and distribution and agency agreements.
- Distribution Agreements in Korea: Crawl Before you Walk
- Finding a Korean Distributor: Top Ten Musts
- Entering into a Joint Venture/Partnership in Korea
- Independent Contractor Obligations in Korea: Amcham Speech
Sean Hayes may be contacted at: [email protected] Sean Hayes is co-chair of the Korea Practice 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 is ranked, for Korea, as one of only two non-Korean attorneys as a Top Attorney by AsiaLaw.
- Korean Distribution Agreements: So you Want to Work with a Korean Distributor
- Hiring/Terminating an Employee/Contractor in Korea: Employment Law in Korea
- Employment Background Checks in Korea: Not so Different from China
- Enforcement of Covenants Not to Compete in Employment Agreements in Korea: Restrictive Covenants in Korea
- Legal/Compliance Checklist for your Korean Company: Top 7 Things to Do Before you Do Business in Korea
- So you Want to Start a Partnership/Joint Venture in Korea?