Minimum Wage Raised in Korea for 2020: Employment Law Updates

South Korea has chosen to raise the minimum wage by 2.9% for 2020 to KRW 8,590 (c. USD 7.11).  The Minimum Wage Commission of Korea set the wage at a lower than expected increase because of deteriorating economic conditions in Korea. President Moon’s plan to raise the minimum wage to KRW 10,000 per hour shall fall short, because of, among other things, a slower than expected growth rate and regional geopolitical issues facing Korea.  We shall keep the reader updated when more is known. (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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Korean Independent Contractor Risks: Korean Labor Standards Act Basics

The Korean Court System has been less reluctant, in recent years, to deem a Korean independent contractor an “employee” under the Labor Standards Act (LSA).  This fact remains true even when an employer establishes that the independent contractor is aware that he/she was contracted as an independent contractor, thus, not a regular employee of the Korean company. Upon the establishment of the status as “employee” in Korea, the individual is entitled to all of the benefits of an employee including, inter alia, severance and employment security, thus, increasing the compliance, tax, payroll and other risks to the foreign-capital invested Korean company. Obligations to Employees under the LSA The obligations to employees under the LSA are extensive and beyond the scope of this short article.  The more significant and obvious are the Korean legal requirement to provide severance benefits and employment security. With regard to severance benefits, a company must pay,

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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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Can you Revise Employment Rules in Korea without the Agreement of Employees?

The Guidebook on Wage System Reform, published by the Korean Ministry of Employment & Labor, has sparked more interest, in the private sector, than the revamping of Korea’s wage system based on seniority. The major issue, in this regard, is if the Rules of Employment of a company may be amended, without violating the Labor Standards Act of Korea (“LSA”), when “wage system reform” is not consented to by a majority of the employees or the trade union. Numerous Korean government agencies have successfully moved to a more merit-based promotion and bonus system from a strict seniority-based wage system.  The private sector has carefully watched this trend, because of public failures by noted international conglomerates. The private sector, to date, has been slow to move to a merit-based wage or like system because of these public failures. The MOEL’s Guidebook on Wage System Reform (“Guidebook”) was drafted to be a

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Korean Employment Law & Labor Law amendments under Pres. Moon Administration

President Moon President Moon promised during his presidential campaign to make major changes to Korean Labor Law & Korean Employment Law .  President Moon intends to make Korean Labor Law more protective and beneficial for workers.  The major changes,  in short,  promised by the new administation are the following: Create 810,000 New Jobs via expanding Korea’s Public Sector President Moon has vowed to create over 340,000 new government social service jobs and over 140,000 new government jobs in public safety and security while converting 300,000 non-regular workers to permanent workers. Impose Limitations on the Utilization of Non-Regular Workers in Korea President Moon has vowed to propose a bill that some have named the “Special Act on Preventing Discrimination Against Non-Regular Workers.”  This Bill would, among other things, according to the President Moon Administration: Impose limits on the use of part-time and fixed-term workers to only work that is seasonal or

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Enforcement of Covenants Not to Compete in Employment Agreements in Korea: Restrictive Covenants in Korea

It is getting easier for an employer to enforce non-compete restrictive covenants in employment agreements in Korea, because of recent judgments by lower Korean courts noting, among other things, the value of trade secrets in competitive industries in Korea. Korean Non-Compete Agreements Recently, a interesting case, in a Seoul, Korean court, concerning the wedding planning business was handed down by the Seoul Central District Court (2104NA63529).  The Court upheld a three non-compete clause against an employee, but reduced a liquidated damage clause from KRW 1,000,000 per day to KRW 100,000 per day. The relevant restrictive covenant noted that: “the Employee shall not work at another company in the same field for three years after termination of employment and the Employee shall pay indemnification of KRW 1,000,000 per day if this Agreement is breached by the Employee.”  The business of the company was the wedding planning business.  The business is very

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