Definition of “Ordinary Wage” in Korea: Korean Employment & Labor Law Basics

The courts of the Republic of Korea, for years, has struggled to find a consistent interpretation of an “Ordinary Wage.” The definition of Ordinary Wage, under Korean Law, was clarified by the Korean Supreme Court in two decisions handed down on December 18, 2013. The calculation of Ordinary Wages is important, since the calculation is utilized to calculate statutory entitlements, and thus has an impact on the aggregate amount of contributions necessary to be paid to employees. For example, according

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Dismissal of Employees in Korea: Supreme Court of Korea Precedent

The Korean Supreme Court ruled, in March of 2018, that a company may terminate employees for one incident of employee gambling. The case is a precedent that may make it easier for employees to terminate employees that violate certain company rules without the need to provide notification and an opportunity to improve. The case stems from the termination of bus drivers that were caught on one occasion gambling prior to driving buses. The lower courts ruled, in short, that gambling

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Wrongful Termination in South Korea

South Korea is not an “at-will” employment country, which means that an employer may not dismiss an employee for any reason nor without warning or notice. Under the Korean Labor Standard Act, an employer who has five or more employees may not dismiss or suspend from work any of its employee without “justifiable cause.” And even the employer can establish justifiable cause for dismissal, in Korea, the employer is still required to give a minimum of 30-days advance notice (or

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Korean Independent Contractor Risks and Obligations under Korea LSA Speech to Amcham Korea

During a recent speech the head of the Korean Labor & Employment Law Team and I gave to the American Chamber of Commerce in Korea, a few interesting topics came up that seemed to be of particular interest to participants.  For the Power Point of the presentation click HERE. Factors Courts use to Determine if an Individual is an Employee and Thus Obligated to Provide Severance and Employment Security etc. Under the Korea Labor Standards Act (LSA). These following factors

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Execution of Stock Options in Korean Corporations under Korean Commercial Code

Stock options, in Korea, are often provided to senior foreign and domestic employees of companies in Korea.  For stock options, in non-listed/non-public companies in Korea, to be exercisable by employees in Korea (thus a valid option) the option must be approved, in most cases, at a general shareholders meeting of the Korean company. Another article that may be of interest can be found at: Granting & Exercising Stock Options in Korea.   The articles of incorporation should be amended or should

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Korean Labor Law Checklist for Employers and Employees

The Korean Ministry of Labor created this list with revisions by Sean Hayes and IPG.  I will update the list periodically. The checklist is intended for all employers that employ five or more workers. The list contains many generalizations, thus, don’t take this as the end all list.  I suggest, also, clicking on the label to the right entitled Korean Employment Law.  Please note that Korea’s Labor Law is evolving rapidly, thus, this list may not reflect recent changes.   KOREAN

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Audit Proof your Independent Contractor Expenses

I just read a great post on an even better blog entitled the New York Small Business Law Blog. The blog post – Tips on Making your Independent Contractors Audit Proof – notes that the feds are increasing their efforts to crack down on misclassified independent contractors. They advise the attorney gave on how to avoid the scrutiny of the government would have also been useful for a client of ours that ran into an issue with the Korean National Tax Service and the Ministry

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The Ten Commandments of Labor Relations in South Korea: Korean Human Resources Basics

Korea has one of the most capricious and least efficient labor forces in the world (which the exception of a few industries) and China is catching up with Korea very fast. Vietnam, Cambodia, Laos, Malaysia, Indonesia and the Philippines will soon follow. The fault is not only on the employees, but on the employers.  Korean companies have departed for greener fields in China to discover that the fields are not as green as originally imagined. Many of these same companies,

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Korea, the Land of Perpetual Crisis, is facing yet another crossroads by Tom Coyner

Korea, the Land of Perpetual Crisis, is facing yet another crossroads — this time Korean the focus is on renewed challenges facing manufacturing. The weakening Japanese yen together with the growing strength of Chinese manufacturing, not to mention rising costs of local labor, is placing Korea once again as the proverbial shrimp positioned between the two whales. In fact, to a large degree, the real growth of Korean manufacturing is taking place in Korean-owned facilities outside of Korea. While this

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Alternative Legal Fee Arrangements at Korean-based Law Firms: Limited Scope Representation Explained

Many Korean law firms have been willing to work in relationships based on a non-time charge flat-fee or contingency basis for Korean clients.  However, many of these law firms in Korea have been unwilling to work on alternative fee arrangements with non-Korean clients, because of, among other things, the requirement to represent the client in a far different manner than that of a Korean client and, also, reduced competition in the foreign-client market, because of the reality that only a

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Filing a Complaint to the Merit System Protection Board from within Korea

The Merit System Protection Board (MSPB) is a U.S. government agency protecting the rights of US employees. US Federal employees in South Korea are entitled to the same protections, under U.S. Law as employees based in the United States. The United States attorneys at IPG Legal have extensive experience handling appeal matters at the Merit Systems Protection Board (MSPB), grievances under the Negotiated Grievance Procedure and complaints to the Equal Employment Opportunity Commission (EEOC). We have worked with GS and

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Immigration updates for Foreigners In Korea: Expiration of Visas

The Korean Ministry for Justice (MOJ) announced it is relaxing passport restrictions for foreign residents in South Korea. Under the new guidelines from the MOJ, long-term foreign residents shall be allowed to stay in the country after their passport expires. The MOJ announced it was giving foreign nationals in Korea an amnesty period until June 2022. Foreign nationals shall be allowed to stay in Korea for up to 12 months, even if their passport has expired. Once the amnesty period has expired,

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Minimum Wage Increased in South Korea for 2021: Employment Law Update

The Ministry of Employment and Labor of South Korea has increased the minimum hourly wage by 1.5% for 2021 to KRW 8,720.00 compared to the 2020 minimum hourly wage of KRW 8,590.00. This new minimum hourly wage took effect on January 01, 2021. Moreover, in accordance with the hourly wage increase, the new minimum monthly wage, based on 209 working hours per month, will now be KRW 1,822,480.00 per month. The new minimum hourly wage also applies to both local

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What Do You Need To Know About Severance Pay in South Korea?

Korean Severance pay (retirement pay) is the compensation that an employee in Korea is entitled to receive from his employer doing business in Korea once the employment has ended. Under Korean Employee Retirement Benefit Security Act, a regular full-time employee in South Korea shall receive a severance pay within 14 days from termination of employment. The amount of severance pay is equal to employee’s one month salary for every year of consecutive service. For similar articles, you may read: Statutory

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Calculation of Korean Hourly Wage Rate under the Minimum Wage Act of Korea

Korea’s minimum wage as per the Korean Minimum Wage Act in 2019 is determined by the Minister of Employment & Labor as KRW 8,350 per hour. The latest decisions of the Supreme Court developed a calculation standard/method for determining an hourly wage rate that is not in line with the opinion of the Ministry of Employment & Labor. In many such cases, a Ministry, simply, pushes to amend the law. This matter is important, since the standard hourly wage rate

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EEOC Complaints in Korea at Yongsan Army Garrison, Camp Humpreys and Area I: EEO Korea Complaints

This law firm’s U.S. lawyers handle EEOC Korean complaints from our office in Korea; Merit System Protection Board (MSPB) appeals from Korea; grievances under the Negotiated Grievance Procedure from Korea; complaints to the Equal Employment Opportunity Commission (EEOC); lawsuits in U.S. federal court for federal employees working at Yongsan, Camp Humphreys, Area I and throughout the Korean peninsula.  We, also, on occasion handle matters stateside and throughout other parts of Asia.  These matters are all personally handled by Sean Hayes and

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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

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Employment Support for Disabled Soldiers in the Line of Duty as per the Amended Korean Act on the Management of Civilian Personnel in the Military Service 2019

The bill on the Amendment to the Korean Act on the Management of Civilian Personnel in the Military Service (hereinafter as “Amendment to the Act on Civilian Personnel in the Military Service” or “Act”) was passed by the Korean National Assembly on March 28, 2019. The Act is intended to improve the financial and work-related recovery of Korean military soldiers, which are disabled by an injury during military service. History and Legal Background to the Amendment to the Act on

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Korean Workplace Discrimination Laws

There are numerous Korean labor and employment laws that prohibit employers from discriminating against their employees in a Korean workplace. These Korean workplace discrimination laws are found in a myriad of Korean statutes and regulations. This article on Korea’s discrimination laws shall provide a quick guide as to where employers and employees can locate the basic requirements under law. The major pieces of legislation are the following: the Korean Labor Standards Act; the Korean Equal Employment Opportunity Act; the Korean

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Suspending Korean Workers without Pay due to Economic Fallout from the Coronavirus: Korean Employment Law Basics

IPG has numerous client-employers in Korea that are facing serious economic conditions because of the spread of the coronavirus across Korea. In my nearly two decades, in Korea, we have never seen such a dire situation. This situation seems, on its face, even more dire for those in F & B and certain manufacturing sectors than the 1997 Asian Financial Crisis (IMF Crisis). Yes, I was even in Korea during the Asian Financial Crisis. Korea, as of the writing of

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