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 of Labor a few years back.  The client, who was working with a large ubiquitous Korean law firm, lost a costly battle with the Ministry of Labor and National Tax Service because of a naively drafted contractor agreement and poor advice given by a team that consideres itself the leading team in labor law.  Never believe those publications that rate law firms.  The blog post reawakened my memory of this incident.  The practical advice noted in the

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Survey on Labor Law Violations

In July of 2010, a survey was published by Jungbu Employment and Labor office. The office conducted a survery on 207 companies in Incheon that hired foreigners (non-Koreans), minors and the handicap. I assume they combined the three groups, since they are perceived as the most abused individuals by employers. The report concluded that: 1. 196 of the 207 employers violated labor law (94.7%);2. 83 breached a labor law clause requiring a written employment agreement (40%);3. 66 breached a clause of the labor law requiring employees to pay retirement allowance, wage arrears, yearly and monthly allowances, within 14 days of resignation (31.9%);4. 36 didn’t pay all wages or yearly allowancess (17.39%);5. 4 paid wages below the minimum wage of KRW 4,110 per hour. [email protected] (c) Sean Hayes – SJ IPG. All Rights reserved.  Do not duplicate any content on this blog without the express written permission of the author. [email protected]

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Back to Park Chun-Hee

Korea Times September 18, 2009 by Sean C. Hayes (Host of this blog) This past week, Korea and my practice group lost a large multinational company to Hong Kong. The client, who first hired a business consultant to conduct research on where to establish a regional headquarters, chose Hong Kong primarily based on the Index of Economic Freedom and its mention of Korea’s: “burdensome labor regulations” and “non-transparent rule making and law formulation; exclusionary social, political and business structures; and insufficient institutional checks and balances.” Other negative implications included “piracy of copyrighted works”; “contracts … considered a matter of consensus”; and a “justice system [that] can be inefficient and slow.” These were contrasted, by the consultant, with Hong Kong’s: “flexible labor regulations”; “foreign firms not seeing corruption as an obstacle to investment”; “strongly protected” contracts; a “legal system [that] is transparent”; and the emphatic mention that “foreign capital receives domestic

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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 LABOR STANDARDS ACT A Korean company should conclude a labor contract with every worker whom it directly employs. An employer, when concluding a labor contract, should clearly state terms of employment prescribed by the act. (Fine up to 5 million Won) An employer ordinarily, employing ten workers or more, should prepare rules of employment and submit them to the Ministry of Labor. (Civil fine up to 5 million Won) An

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Dismissal of Workers for Operational Emergency Declared Invalid under Korea Labor Standards Act.

Incheon District Court (2007 KaHap 4420) recently ruled that the dismissal of 5 workers for an “operational emergency” is in violation of the Labor Standards Act, since “In order for an employer to dismiss a worker due to operational reasons, there should be and emergency in operations. But defendant has maintained profit since 2000 and only had a loss in 2006.” The Court also noted that employer did not have debt and was sufficiently solvent. The employer was ordered to pay the defendant for wages “which they could be paid if continuing to work. So the plaintiff should pay them for wages from the next day after the dismissal to the reappointed day.” Here is a general article I wrote for the Korea Times last year that may be useful when an employer dismisses an employee or when an employee is dismissed. Ahnse Law Offices successfully represented the employee asking

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No American Law Firms in Korea – YET

Posted by:  Sean Hayes (Chair, Korea Practice Group at IPG)[email protected] _____________________ The KOR-EU FTA passed and thus British law firms will be able to setup shop in Korea over a five-year three-stage phase-in period.  All of the leading British firms have begun building relationships with an eye to formal partnerships.  KOR-US FTA, however, has stalled because of opposition of some prominent lawmakers in the liberal parties even though the two FTAs are very similar in scope. The following article is an interesting article on the intention of an American law firm in the Korean market and shows that local firms have nothing to fear and will benefit from these firms’ focus on quality, profitability per attorney and equitable management. Full Disclosure: We have not had a meeting with the firm mentioned in the article. _________IPG is engaged in projects for companies, entrepreneurs and individuals doing business in Bangladesh, Cambodia, China, Korea, Laos,

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Corporate Downsizing the Korean Way

Corporate Downsizing the Korean Way Appeared in the Korea Times on May 18, 2007Lex Pro Bono Column Dear Professor Sean Hayes, I am working for a company that has notified us that they will layoff around 25 workers. I heard that under the Korean Labor Law an employer cannot dismiss employees without just cause. Is this true and what can I do to protect my job? Worried in Yeouido. Dear Worried, the Korean Labor Law provides some protection from dismissal by employers, but provides little protection for employees that are dismissed because of serious economic difficulties facing an employer. Korean Labor Law is codified in the Korean Labor Standards Act (LSA). The LSA is a statute that dictates the working standards for most workplaces. The statute is vague and most of its language has been developed through case law. Article 30 and 31 of the LSA assist in guaranteeing employment

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