IPG’s Korean Employment & Labour Law Chapter in Global Legal Insights 2018

IPG is proud to announce the contribution of the Korean chapter to GLI’s 2018 Edition of Employment & Labour Law.  The publication contains chapters from 29 different countries.  The publication may be found at: Employment & Labor Law, Sixth Edition. Key Issues addressed are, among others,: -General Labour Market Conditions in Korea -Employment Policies under the Moon Administration -Litigation Trends in Korea -Definition of “Ordinary Wage” in Korea -Korean Supreme Court’s Regular Interval Bonus Case -Director as an Employee for Korean Employment Security Purposes -Korean Employee Lockouts -Layoffs and Dismissals Based on Fault of the Employees in Korea -Korean Restrictive Covenants Law -Trade Secrets Protection in Korea -Severance Payments in Korea -Childcare Leave in Korea -Maternity Leave in Korea -Paternity Leave in Korea -Annual Leave in Korea Please see the other articles below and via the Employment Law Tag. [ABTM id=1137] (c) Sean Hayes – SJ IPG. All Rights reserved.

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Part-time Worker Annual Paid Leave Obligations under the Korean Labor Standards Act

Employers, in Korea, are in most cases required to grant annual paid leave to full-time and even part-time workers working in Korea-based companies.  Exceptions to this Korean annual paid leave law exist for Korean workers that work, on average, less than 15 hours per week for these Korean-based companies. Article 18 of the Korean Labor Standards Act notes that: “(1) The terms and conditions of employment of part-time workers shall be determined on the basis of relative ration computed in comparison to those work hours of full-time workers engaged in the same kind of work at the pertinent workplace.” However, annual paid vacation leave and other articles/obligations under the Korean Labor Standards Act do not apply to “workers whose contractual work hours per week on an average of four weeks (in cases where their working periods are less then four weeks, then, based on such period of work) are less

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Korean National Tax Service Tax Law News Release to Foreign Corporate Taxpayers: Korean Tax Law Updates

The following Korean Tax Law News is a publicly released Korean tax notification that is intended for foreigner companies in Korea.  The notification was not translated or drafted by this law firm.  For any questions on this notification please Contact Us. Korean Tax Law News 【January 2018】 ☞ The following Korean tax information is translated from Korean for foreign-invested companies, and is not legally binding. ※ Year-end tax settlement by foreign workers in Korea □ With the increase in foreigners residing in Korea, the number of foreign workers in Korea has increased every year as well. ○ For the convenience of foreign workers‘ year-end tax settlement in Korea, here are a few tips on year-end tax settlement for foreign workers this year. □ If a foreigner has wage and salary income generated in Korea, he/she should perform year-end tax settlement just like domestic workers, regardless of his/her sojourn period and

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Korean Tax Law Amendment Press Release by Korean Government

The following is a Press Release by the Korean Government on recent Korean Tax Law enforcement decrees.  We shall update the reader when more is known.  The following press release was not proofread or translated by this firm.  The Press Release was published by the Ministry of Strategy & Finance in the English language and copied, in its entirety, below. Decree Focuses on Boosting Investment and Broadening Tax Base The government announced a revision to a total of 17 tax enforcement decrees, including ones to help create jobs, improve income and broaden the tax base.  Major revisions to the 2017 tax enforcement decrees are as follows. – Expand the angel investment tax incentives (30 to 100 percent income tax deduction):  Include crowdfunding investment in companies run for less than 7 years, or investment in companies run for less than 3 years if they are qualified by credit rating agencies –

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Korean Tax Risk of Foreign Corporation Deemed “Actual Business Management Locale” within Korea: Korea Tax Law Basics

Foreign corporations, doing business in Korea, may be deemed local corporations subject to taxation on worldwide income if the foreign-incorporated company is deemed a Korean “domestic corporation” for Korean tax purposes.  This liaison-office Korean Tax Risk can, thus, lead to taxes on worldwide income, a tax audit and even criminal sanctions against those operating in Korea.  We have dealt with matters were employees, even, received exit bans. Thus, in most cases the establishment of a local Korean corporation is essential in assisting in shielding your foreign corporation from tax and other liabilities unless substantial reasons exist to not establish a local Korean corporate entity. One of the most significant risks of foreign companies doing business in Korea without a local entity is being deemed a local corporation subject to tax on worldwide income.  A domestic corporation under the Corporate Tax Act of Korea is a company with its “actual business

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Abuse of Market Dominance in Korea: Competition Law in Korea

The Seoul Central District Court ruled earlier this year that Namyang Dairy Products Co. (“Namyang”) was in violation of the Monopoly Regulation and Fair Trade Act of Korea by abusing its market dominance and “unfairly taking advantage” of retailers. For more Antitrust/Competition Law articles please click on the labels noted Antitrust Law on the right. Namyang, a major Korean dairy company, was accused by retailers of, among other things, forcing retailers to purchase expired or soon to expire products and purchase unpopular products.  The Seoul Central District Court in 2014GaHab592238 ruled the company was in violation of Article 23 of the Monopoly Regulation and Fair Trade Act of Korea and awarded damages to the plaintiffs. Monopoly Regulation and Fair Trade Act of Korea Article 23(1), no. 4 prohibits a company or individual from: “Trading with a certain transacting partner by unfairly taking advantage of his/her position in trade.” The Court

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Guidelines on Rules of Employment & Guidelines on Fair Personnel Management Withdrawn by Korean Ministry of Employment

Inline with the labor union and employee-focused promises of the President Moon Administration, the Ministry of Employment & Labor has withdrawn the impeached President Park’s Guidelines on Rules of Employment & Guidelines on Fair Personnel Management to the regret of most of industry.  The withdraw of the Guidelines does not change the present state of Korean Labor & Employment Law. Ex-President Park’s Guidelines on Rules of Employment, inter alia, noted procedures to amend the rules of employment of a company even without the mandated consent of the employees and the Guidelines on Personnel Management noted a procedure and reasons to terminate poor performing employees.  The Guidelines, together, were a means, in part, to express an opinion and clarify issues, seemingly, with the purpose to to add more labor flexibility to a system that is perceived to be overly protective of employees.  Korea, in international surveys, is rated as have one

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Publicity Rights/Portrait Rights in Korea: Entertainment Law Basics in Korea

The Seoul Central District Court delivered, in mid 2016, a decision ruling that an individual’s publicity rights (portrait rights) were violated by a person sharing an image on a public social media site.  The violators were sharing the images for commercial purposes and shared the images without the publisher’s consent (Seoul Central District Court 2015GaDan5324874). FACTS Mr. A posted photos of himself on his Instagram Page.  Mr. B utilzed those photos on Naver’s Band without Mr. A’s consent. Band is a Korean social media site. C company, also, posted the photos on Facebook without Mr. A’s consent.  Thus, Mr. A’s photos were re-posted from Mr. A’s Instagram Page and posted on Naver’s Band by an individual and posted on Facebook by a company.  Seemingly, the purpose of the re-posting was to promote the pages and products of Mr. B and Company C.  The attorneys for Mr. B and Company C

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Starting a Company in Korea: Establishing a Foreign Capital-Invested Korean Company, Branch or Liaison Office

Korea, for many business, is an excellent market to enter.  We assist numerous franchisers, tech companies, chemical companies, oil & gas companies, automotive suppliers, defense companies and basic manufacturing companies on compliance and contentious issues related to their business in Korea.  We, also, assist entrepreneurial individuals in establishing and doing business in Korea. To establish a company in Korea, there are, in short, three legal manners for a foreign company or individual to do business in the Korean Market.  A business may enter as a Foreign Capital-Invested Company (Foreign Direct Investment Company)a Branch or Liaison Office.  In most situations, the most suitable manner to enter the Korean market is via the FDI Company route in order to avail of certain favorable tax treatments, not expose the foreign entity to liability, easier remittance of profits and easier processing of visas. However, many exceptions to this general rule do exist.  The basics

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Increased Scrutiny of Employers by Korean’s Ministry of Employment & Labor under President Moon’s Administration: HR Audit Needed by Korean Employment Lawyers

Many Korean Employment Lawyers are taking note of the recent initiative by Korea’s Ministry of Employment & Labor.  At the end of June of 2017, the Ministry announced an “Unfair Labor Practice Eradication Initiative.” This Initiative intends to investigate and punish perceived “unfair labor practices” of employers in Korea by having the Ministry of Employment & Labor conduct more audits of companies and provide punishment for those perceived to be in violation of Korea’ Labor Law.  It is time to do an internal audit of the labor practices of your company.  The audits completed by Labor Lawyers (not actually lawyers usually- usually NoMusa – licensed labor professionals) is, often, not adequate.  These individuals are unable to take cases to the court and, typically, do not have the nuanced necessary to adequately advise on more complex labor matters concerning strategy.  The “Unfair Labor Practice Eradication Initiative” shall: Increase the Frequency &

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English-speaking Korean lawyers and International Lawyers at International Law Firm in Korea discussing issues of Korean Law

IPG Legal is a leading client-focused international law firm with offices in Korea that is, often, selected over the ubiquitous Korean Law Firms when success is essential and success depends on nuanced street-smart advice, proactive  and unconflicted representation. Our attorneys are, intentionally. different from the crowd.  From our retired judge partners to our junior associates, we are all trained with an intense focus on client success, lawyer proactivity, and to understand the nexus between your commercial and legal needs. Our attorneys shall never push to you useless memos, non-nuanced legal advice or get you into litigation without an honest assessment of the merits and shortcomings of the matter. We are  – intentionally different from the crowd.  Globally Experienced – Locally Connected.  We are IPG.  Korean Legal Practices Korean Antitrust, Competition & FTC Arbitration, Int’l & Domestic Korean Civil Litigation Korean Criminal Defense Korean Corporate Law & Compliance Korean Employment, Labor &

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Korean Distributor Sales Territory or Customer Restrictions in Korea: Korean Distributor law Agreements in Korea

Korea’s Distribution Law is governed, primarily, by the Commercial Code of Korea, Monopoly Regulation and Fair Trade Law of Korea (FTL) and the, newly enacted, Fairness in Distributor Transactions Act of Korea.  These laws comprise a substantial body of law that is consistently evolving. The main regulatory body enforcing the FTL of Korea is the Fair Trade Commission of Korea (“FTC”).  The Fair Trade Laws of Korea, in most cases, creates the most significant risk for suppliers and manufacturers doing business with distributors in Korea.  A nuanced understand coupled with a proactive approach to your distributors is necessary in succeeding in the Korean market. Distribution Agreements in Korea General Rule In general, Korea prohibits the “unfair restriction” of trade based on the territory or type of customer. However, numerous exceptions exist to this general restriction.  I shall be detailing some of these exceptions over the next couple of months.  Please check

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English-Speaking Business Lawyers in Seoul, Korea: Corporate Law & Compliance Team at IPG Legal

Sean Hayes and English-Speaking Korean attorneys working for an international law firm in Korea author the Korean Law Blog.  Sean Hayes is the author of this blog.   Additionally, English-Speaking corporate attorneys and Korean-savvy business professionals contribute articles to the blog.  The blog is rated by the ABA one of the Top 100 Law Blogs. Leading rating services rate IPG Legal  as a leading law firms operating in Asia.  IPG serves mainly expat companies and individuals and, thus, has many English-speaking Korean lawyers with significant overseas corporate law experience. The Corporate Law and Compliance Team at IPG Legal Entry of a Fortune 500 e-commerce site into the Korean and Chinese markets.  Advisory Services related to FTC and Supplier Risks for a major e-commerce company in Korea. Consulted on licensing, joint venture and regulatory compliance issues for an American real estate developer’s shopping mall joint venture operating in Korea. Due Diligence, drafting of shareholder

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Guardianship Law in Korea: The Lotte Family Conservatorship Saga Continues

With news late in 2016 that the Seoul Family Court Appointed a Law Firm as Legal Guardian for Shin Kyuk Ho, founder of Lotte Group, and the negative effect the ruling had on his elder son’s efforts to regain control of the conglomerates, it is a good time for business owners and their families to understand what guardianship law may mean for businesses and families in Korea. Guardianship Law in Korea The Adult Guardianship Act of 2011 of Korea in the main law, in Korea, creating a Guardianship/Conservatership System in Korea. Under the Guardianship Act of Korea, a family court, in Korea, may declare a person to be legally “limited-incapable” if, as a result of, inter alia, mental illness or disability, a person lacks the mental capacity to make his or her own decisions or will jeopardize the livelihood or their family’s livelihood in he or she does make decisions

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Korea to Rule if Pokémon GO Can Be Released Nationally in Korea

Korea awaits a decision from the government that will effect the national release of the wildly-popular Pokémon GO app. We recently discussed the legal ramification in America that come with use of augmented reality games like Pokémon GO on our sister blog, The New York Law Blog.  Augmented reality games involve live direct or indirect views of a physical, real-world environment whose elements are augmented (or supplemented) by computer-generated sensory input such as sound, video, graphics or GPS data.  In the case of Pokémon GO, fictional creatures are projected onto a mobile device’s camera through the game’s app and relies on Google Maps, as part of the game’s presentation, to locate various elements of the game. Pokémon GO has yet to be released across Korea, the 4th largest gaming market in the world, because of alleged concerns for cyber security. The Ministry of Land, Infrastructure and Transport (MOLIT) is scheduled

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Top 10 Rules for Doing Business in Korea: Korean Business Ethics Basics

The following guest post contains some great business advice from Tom Coyner on Korean Business Ethics.  Tom works with us as a business adviser and, also, in these golden years he is, also, pursuing his passion – photography. Top 10 Business Rules for Building a Successful Business in Korea Thou shall always have a Formal Introduction. If you are in Korea, it is most important and advisable to have a formal introduction to any person or company with whom you want to do business. Whenever possible, obtain introductions, using a proper intermediary, when possible, in your business meetings. Thou Shall Not Be Without Business Cards. In Korea, a businessperson is not comfortable until he or she knows what company and what position the person he or she has just met. Have a large supply of name cards made prior to visiting companies. Exchange your card with the other person’s taking

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Korea’s Anti-corruption/Anti-Graft Law: Kim Young-ran Law Implementation in Korea

Korea’s Anti-graft Law shall be effective on most companies doing business in Korea on September 28, 2016. Call your lawyer in Korea and get your lawyer to write you a memo on the issue.  The law will have, immediate, effects on most companies doing business in Korea. Korea, based on calls from civic groups and some in the media criticized the powers that be in Korea that Korea was lax on white-collar crime.  These individuals, among other arguments, claimed it is near impossible to succeed in business in Korea without resorting to corruption. The Chair of the Anti-Corruption and Civil Rights Commission – retired Supreme Court Justice Young-ran Kim – motioned the National Assembly of Korea to implement a broad-based anti-corruption law.  A watered-down version of the law passed the Korean National Assembly after much debate.  Challenges filed to the Constitutional Court were dismissed by the Court. This Anti-graft law

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Non-Registered Company Director (Executive Director/Senior Managerial Worker) in Korea deemed Employee under Korean Labor & Employment Law

Article 27 of the Labor Standards Act of Korea stipulates that all “employees” must be notified in writing of the reason for dismissal.  In most cases, 30-days notice or 30-days pay in lieu of notification is required.  Employees may, also, only, be terminated for “fault attributable to the employee” or “urgent managerial necessity.”  The burden is on the employer to prove “justifiable grounds for termination.”  All good proactive employment lawyers in Korea have detailed programs in place that assist in justifying termination.  However,  sadly, it is very difficult to find good proactive employment lawyers in Korea. Directors are, typically, not deemed “employees” under Korean Law.  However, exceptions exist.  We wrote an article on these exceptions at: Factors in Determining if a Worker is an “Employee” under the Korean Labor Standards Act of Korea. A recent cases filed against TongYang by an unregistered “director” sheds light on the risks associated with terminating

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Searching Trademark & Service Marks in Korea: Register your Trademarks/Service Marks Prior to Doing Business in Korea

Prior to marketing products, services or a business in Korea do a thorough search for like trademarks/service marks in Korea, then, have your trademarks/service marks registered in Korea – if you don’t want the added cost of litigating a matter at a Korean court.  If you have patents, don’t forget to, also, register your patents and other intellectual property. Your U.S. and E.U. trademark, service mark and patent filings are not enough. These “international filings” only gives you a grace period to file outside of these jurisdictions.  The Korea Intellectual Property Organization has a website, in English, that has a decent search system.  Regrettably, not all of the information on the site is in English.  This search is not the end of the matter.  You should, obviously, also hire a professional to assist. Upon filing, also, make sure you develop at strategy to protect your Intellectual Property.  Your strategy should,

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Suing Directors for Company Loses in Korea: Korean Corporate Compliance Basics

It is getting easier for shareholders to obtain judgments against directors for breaching their fiduciary duties to Korean companies.  We recommend all director to obtain director liability insurance and for all shareholders to consider suing directors when disputes arise because of the lack of oversight or malfeasance by directors. Director’s Fiduciary Duties to Korean Companies Under Article 382-3 of the Korean Commercial Act and, also, 681 of the Korean Civil Act imposes fiduciary duties on directors of Korean companies.  These clauses impose a duty to affirmatively act “faithfully,” with reasonable prudence and to comply with law.  Article 399 of the Commercial Act allows courts to award damages to shareholder for breaches of these duties. Korea courts have been very lenient in imposing liability on directors, but recent cases may be an indication that Korean courts are becoming more willing to protect minority shareholders rights in Korea. I will be writing

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