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 is a necessary mathematical component to calculate the monthly salary of employees. Korean Minimum Wage Act The Korean Minimum Wage Act’s main purpose is to provide a minimum sum per hour to employees that employers must, at least, pay to employees. The fear, in short, is that without a minimum wage, employers may be able to exploit vulnerable workers. The appropriate hourly minimum wage under the Korean Minimum Wage Act

Continue reading

Korean Intestate Succession Law: Inheriting Property from your Korean-National Parents

We assist numerous clients concerning intestate succession issues in Korea. Many of these clients are foreigners who are children of a Korean decedent who passed away without a will. Typically, the clients are in need of an asset scrub and assistance in the transfer of the assets to the name of the client and forwarding of the funds overseas. Please note this present article deals, solely, with Interstate Succession under Korean Law. If your parent was, solely, a national of Korea, in most cases, the laws of the Republic of Korea shall apply to the estate of your parent. The relevant law can be found at: Korean Civil Act Part V (Inheritance) For an additional article on Korean inheritance law please see: Korean Inheritance Law: Who Inherits What, When & How in Korea. Inheritance Priority under Korean Interstate Succession Law? The rank of priorities, in Korea, for a person that

Continue reading

Provisional Attachments of Assets in Pending Litigation in Korea Courts

A party attempting to collect on a debt or potential liability based on breach of contract or torts in Korea may obtain a Provisional Attachment of an Asset. Another useful tool to expedite proceeding in a Korean civil matter is to Obtain a Payment Order from a Korean Court.  A provisional attachment is considered provisional, since the attachment is executed prior to the final judgement. The, facial, purpose of a provisional attachment is to secure assets necessary for enforcement in cases where a defendant may conceal or dispose of assets. However, a provisional attachment, often, encourages settlement. We advise most creditors attempting to enforce a debt or potential debt against a debtor is to obtain a provisional attachment if the debtor is a company or individual without significant tangible assets.  Companies with significant assets are likely to pay debts after a judgement and, normally, are not significantly harmed by the attachment.   Courts

Continue reading

Liquidated Damages v. Penalties in Korean contracts

As a NY attorney, it’s a bit strange for me to read a Korean contract and see how the word “penalty” is used.  In the United States (as well as other common law jurisdictions), when a contract contains a “penalty,” the clause is, often, invalidated. Korea, however, allows some “penalties” in contracts. Cutting to the chase, this is merely an issue of confusing and overlapping terminology.  But since its confusing, it is worth explaining. To start with, a bit of background on liquidated damages.  Liquidated damages refer to damages, the amount of which, the parties designate during formation of a contract as compensation for non-breaching parties in the event of breach.   In the US and other common law jurisdictions, liquidated damages clauses are invalidated if the purpose is to punish the breaching party, rather than to compensate the injured party.  These clauses are referred to by the court as “penalties.”

Continue reading

Enforcing Punitive & Liquidated Damages Awards against Korean Companies via Contracts with Foreign Subsidiaries of Korean Companies

A recent amendment of the Korean Civil Procedure Act added Article 217-2.  The Amendment has codified a holding by the Seoul Central District Court and other Korean courts noting, in part, that Korean Courts may refuse to “recognize foreign damage awards that clearly exceed amounts considered reasonable in Korea in violation of good morals and the social order of Korea” (99 KaHap 14496, S. Cent. Distr. Court, 10/20/2000). The Amendment allows Korean Courts, in Korea, the power to not recognize a damage award that the Korean Court’s perceives as “excessive.”  This standard-less “standard” leaves much wiggle room for Korean Courts. A typical situation is a case where an American importer sues a Korean conglomerate in a U.S. Court and damages are awarded to the U.S. company.  The damages may include liquidated, punitive and non-“actual” damages.  The American importer, then, attempts to enforce the judgment in Korea. There is a simple

Continue reading

Liquidated (Penalty) Damages Necessary in Most Korean NDA and Non-Compete Agreements

For any company engaged in negotiations, agreements, pre-M & A due diligence, OEM outsourcing or other activities with a Korean business or individuals that may lead to you disclosing your companies intellectual property, know-how or other proprietary information, always include in your no-competition, non-use, non-circumvention and non-compete agreements a liquidated damages (Penalty Damages) clause.  Without a Penalty Damages Clause – good luck in proving damages when a breach occurs. If the other party refuses to sign the clause, this is good sign that the party will breach. The clause is of course, only triggered when a breach occurs. I, recently, had a client that was very worried about losing “goodwill.” Easy solution, blame the “lawyer.” For companies that are not engaged in active, continuous and substantial business in Korea, the chance of finding evidence of damage, after a breach, is remote – best. The reason stems from proof of market potential in

Continue reading

Entering into a Joint Venture/Partnership in South Korea?

One of the major parts of my law practice for international clients, in Korea, is the structuring of joint ventures and the resolution of joint venture disputes in court and through arbitration.  I find, in most of these cases, the non-Korean party is not in need of a joint venture with a a Korean party to succeed in Korea and the Korean party does not realize or has no intent in satisfying obligations under the joint venture agreements.  The parties are commencing a relationship, thus, with an immediate potential for failure. Thus, many disputes are caused by the realization by the non-Korean party that he/she doesn’t need the Korean party and the realization by the non-Korean party that the Korean party had no intent, at signing, in following the joint venture agreement. Do You Need a Korean Joint Venture to Succeed in Korea? We find that a joint venture is,

Continue reading

Preparation for Korean Police & Prosecutor Interrogations & Witness/Defendant Questioning at Korean Courts

All good Korean attorneys prepare all clients for witness questioning & suspect interrogations in Korea.  Clients may be subpoenaed to appear in a Korean police office, Korean prosecutors office or to appear as a witness or a criminal defendant in a Korean Court and should be thoroughly prepared by their attorneys. We at IPG, hear of too many issues of lawyers, only, telling clients to “tell the truth and don’t worry.”  This is, obviously, not adequate witness or suspect preparation.  We see this from Korean law firms large and small.  Thus, the following list was prepared as a basic guide to necessaries prior to coming before a Korean Court, prosecutor or police investigator.  Please retain an attorney that has experience preparing clients for witness questionings and suspect interrogations – it is sad to note that few Korean attorneys have experience preparing even criminal defendants for court.   The reality is, however, that all

Continue reading

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

Continue reading

Motor Vehicle Accidents/Negligence Cases in Korea

Regrettably, many Korean insurance companies, in Korea, are less than generous in offering settlements to unrepresented parties in injuries sustained by car, trucks, taxis and trucks.  The various Taxi Associations’ insurance coverages are, particularly, notorious. The Korean insurance companies utilize an internal calculation method that leads to a settlement compensation amount that, often, is laughable at best.  The claims adjusters, at Korean insurance companies, are great at getting victims of motor vehicle accidents and other accidents, in Korea, to settle matters. Often, the claim adjusters will meet the accident victims in the hospital and use psychological tactics to encourage the accident victim to settle the matter for an amount much less than what would be obtained via a court judgment or negotiation with a Korean attorney. For modest amounts of damages, an attorney in Korea may not be a cost that is justified, however, for any matter that has lead

Continue reading

Korean Arbitration: An Introduction

Korean Arbitration has come a long way since the ratification of the New York Convention in 1973. The Korean Commercial Arbitration Board (KCAB) went from a small organization handling a handful of cases to, now, and organization handling hundred of arbitration cases each year. The number of international arbitrations is, also, on the rise. This article shall give readers the backstory of how Korean arbitration as a dispute mechanism tool has developed over the years in Korea; review the key industries involved in arbitration; and provide a quick overview of the mainstay arbitration institution in Korea: the KCAB. 1973 – 2020: Arbitration in Korea Over the Years The Korea Arbitration Act was enacted into law in 1966. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, aka the “New York Arbitration Convention” or “New York Convention,” is the Magna Carta of international arbitration. The New Arbitration Convention was

Continue reading

The Case for Arbitration over Litigation in Korea

Many of you are prospectively weighing the options of executing contracts with and without arbitration clauses in Korean contracts (aka setting yourself up for prospective litigation battles in Korean courts or resolving a dispute in Korea with the help of an arbitration panel). Thus, this article is intended to consider the option of arbitration over litigation in Korea. In most cases, IPG recommends arbitration over litigation for expat companies doing business in Korea and/or with Korean companies. While of course every case is unique, we at IPG have found great success over the years fighting for our clients amidst the backdrop of arbitration. Our Korean International Arbitration Team was, recently, ranked the top Dispute Resolution Firm in Korea. Benefits of Korean Arbitration over Litigation in Korean Courts Language: If you are not a native to Korea, there is a high chance that you do not speak the Korean language fluently

Continue reading

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 Civilian Personnel in the Military Service of Korea The main trigger for the amendment was an accident in 2016, where a young man lost his leg due to a land mine near the Korean Demilitarized Zone. The man was injured during his mandatory military service. Compensation for Disabled Military Personnel The Korean Military Pension Act provides, inter alia, a retirement pension, a severance pay and a pension for wounds (compare

Continue reading

Fleeing Korea while under Police/Prosecutor Investigation: International Hold in Korea

From changes a couple of years ago in the computer system and policy of the Korean Immigration Services, even if the Korean prosecution/police have not requested that an accused be placed on an International Hold, some records of police investigations, indictments and proposed fines and sentences by the prosecution/police are being reported to the Korean Immigration Service at airports and ports of departure. An International Hold, in Korea, is an official procedure that flags passports and fingerprints & prevents one, under this International Hold, from departing Korea prior to the lifting of the International Hold. Even if you are not under an official International Hold, Korea Immigration may refuse your departure or entry into Korea based on information from data being shared between the Police, Prosecution, National Tax Service and other Korean government agencies.  Please note that the Korea Immigration is a branch of the Ministry of Justice. The Ministry

Continue reading

Leading Commercial Arbitration Law Firm in Korea

IPG is one of the leading Korean law firms retained for international arbitration matters by multinational companies in need of efficient, proactive and non-conflicted advocacy in Korea, North America and East Asia. IPG was recently ranked as a top Dispute Resolution Law Firm. We work on complex international commercial arbitration disputes, investor-State arbitration disputes, construction arbitration disputes, and a myriad of other commercial disputes for international companies doing business in Korea and/or with Korean companies. Locally Connected – Globally Experienced: International Arbitration Team IPG is, often, chosen over the ubiquitous Korean-based law firms when non-conflicted, aggressive and efficient advocacy is necessary for success. We are, intentionally, different from the crowd. All international arbitration matters are personally handled by attorneys with significant international and local experience. Our attorneys have judicial, large law firm, in house and/or government experience and most have studied and practiced law in Korea & abroad. IPG shall

Continue reading

IPG Korea Dispute Resolution Law Firm of the Year

IPG’s Korean Office was awarded the distinction as the Korea Dispute Resolution Law Firm of the year by a well-known international business journal in the United Kingdom. The journal is known for producing tailored news and guides for multinational companies doing business in Asia, North America and Europe. IPG is thrilled that, based on feedback from a survey, our frankness, street-smart advice, non-conflicted advocacy and efficiencies created by a cutting-edge case management system was highly appreciated by our clients. For a consultation with an attorney in Korea please: Contact IPG.

Continue reading

Korean Statute of Limitation in Civil Cases in Korea

The period of the Korean statute of limitation varies based on the type of wrong/breach, type of parties to the case and details of the matter.  The list below is a non-exclusive list of the major Korean Statute of Limitations. The following is an overview of the major periods of the statute of limitations in Korea.  Statute of Limitation law is considered a part of the substantive law and not mere procedural law in Korea.  The following is a list of the major Korean statute of limitations.  The list is not exhaustive.   10-Year Statute of Limitation in Korea Contractual Claims not involving “commercial activities”; and Contractual Claims not involving “commercial” litigants. 5-Year Statute of Limitation in Korea Contractual Claims involving “commercial activities”; and Contractual Claims involving “commercial” litigants. Three-Year Statute of Limitation in Korea Insurance claims; Tort claims; Salary claims; and Rent claims; One-Year Statute of Limitation in Korea Hotel

Continue reading

Korean Commercial Liens versus Korean Civil Liens

Korea, in short, has two major types of liens – Commercial Liens and a Civil Liens.  For example, in a dispute between a contractor and a landowner or developer, a contractor make execute a Commercial Lien or Civil Lien.  A Commercial Lien is governed by the Korean Commercial Code while a Civil Lien is governed by the Korean Civil Code.  I shall for ease, utilize the contractor and landowner (developer) for example purposes only.  For explanation of Korea’s law on attachment please see: Preliminary Attachments in Korea Korean Civil Liens Korean Civil Liens are governed by the Korean Civil Code.  The code mandates that the contractor, to execute the lien, must be in possession of the subject property and the monetary claim must have a nexus to the subject property.  It is interesting to note that the subject property does not need to be owned by the debtor. Korean Commercial

Continue reading

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 it 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 to Article 56 of the Korean Labor Standards Act, an employer must pay 50% of the Ordinary Wage plus the Ordinary Wage for overtime, night and weekend work performed by the employee. Because of the potential for a large unknown future liability, this issue became the most significant issue, in the last few years, among domestic and foreign employers in labor and employment law in Korea. The basic Korean test is

Continue reading

Korean Data Privacy Act: Need for Compliance Audit for your Korean Company

The European Union General Data Protection Regulation (EU GDPR) focuses on the data security of personal data of users of the internet. As the EU offers a potentially lucrative market for online businesses for many Korean companies, South Korea was eager to amend its existing Act on the Promotion of IT Network Use and Information Protection of Korea (“Korean Network Act”) based, at least, partially on bench-marking of the EU GDPR. We suggest all companies, doing business in Korea, conduct via a professional in data privacy – a compliance audit. We suggest the professional has an understanding of not, only, Korean Law, but the law of the European Union as it relates to data privacy. Fines and criminal penalties for violation of data privacy laws have increased in Korea. Korean Network ActThe Korean Network Act was amended in December of 2018. Korea, the EU and other nations are in ongoing

Continue reading