New labor laws were established and existing ones revised in 2013 without thorough evaluation due to excessive political conflicts between the ruling and opposition parties, and the prolonged outside struggle by the opposition parties. One example of the revised laws passed without adequate consideration is the bill on extending the compulsory retirement age to 60.
The field which requires the most attention is occupational safety and health. The Occupational Safety & Health Act, which had been applied mostly to the manufacturing industry, was revised for the first time in 20 years to include virtually all industries. Major revisions include increasing responsibility on primary contractors’ supervision and expansion of regulations on occupational safety and health. Although regulatory policies cannot reduce accidents anymore and policy should focus on the need for companies to prevent accidents on their own (according to their own situations), it is still important for companies to recognize the revised Act and be prepared for enforcement.
Concerning social policy, incentives for the wage peak system have been expanded to promote the introduction together with the new retirement age of 60. These incentives are expected to reduce the financial burden on companies and to help the introduction of the wage peak system.
In individual labor relations, the minimum reserve ratio for the Defined Benefit Retirement Pension has changed, and disclosure of information on employment types is taking effect for employers hiring 300 or more workers. These companies should post types of employment by 31st March.
Regarding the Supreme Court’s ruling on the scope of ordinary wage, solutions from legislation will be proceeded in order to prevent confusion in the workplace.
Finally, attention should be paid on the reduction of working hours since discussions on legislation will continue as related decisions are made to be by the Supreme Court.
Individual Labor Relations
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Feature
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Before Revision
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After Revision
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Related Law & Implementation Date
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Minimum wage
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USD $4.57
per hour
($1 KRW1,078)
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‧ Per hour: $4.90
‧ Per day (8 hours): $39.20
‧ Per month (40-hour work week): $1,024
‧ Per month (44-hour work week): $1,107
※ Until end of 2014, 90% of minimum wage may be paid to workers engaged in surveillance/ intermittent work with approval from the Minister of Employment & Labor, with 100% of the hourly minimum wage required from 2015.
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‧ Announcement of minimum wage for 2014
(2014. 1. 1)
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Increase inminimum reserveratio for definedbenefit retirementpension
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‧ Minimum reserve ratio: 60%
(60% standard liability reserve to secure the ability to pay benefits)
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‧ Minimum reserve ratio: 70%
(70% standard liability reserve to secure the ability to pay benefits)
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‧ Article 5 (1)-2 of the Enforcement Decree for the Employee Retirement Benefit Security Act
(2014. 1. 1)
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Disclosure ofinformation onemployment types
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According to Article 11 of the Public Administration Act, public institutions shall publish information on the current employment status of workers (including board
members).
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‧ Employers usually employing 300 or more workers shall post information at internet website (Worknet) about their employment situation (number of permanent contract workers, temporary workers, and workers with other employment types) for the previous year, as of 1stMarch of every year.
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‧ Article 15 (2) of the Framework Act on Employment Policy (Collection and Provision of Employment and Job Information ) and Article 26 (2) of the Enforcement Decree for the Framework Act
(Procedure for disclosure of information on employment types)
※ Disclosure is due 31stMarch 2014
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Expansion of pre- and post-natalleave days andpaid leave days formultiple births
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‧ Pre- and post-natal leave days for expectant mothers: 90 days
‧ Paid leave days for expectant mothers: 60 days
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‧ Pre- and post-natal leave days for expectant mothers: 120 days
‧ Paid leave days for expectant mothers: 75 days
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‧ Article 74 of the Labor Standards Act (2014. 7. 1)
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Add academicbackground todiscriminatorycriteria when employing workers
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‧ Gender, religion, age, physical condition, social status, place of origin, school attended, marital status, pregnancy or medical history
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‧ Gender, religion, age, physical condition, social status, place of origin, academic background, school attended, marital status, pregnancy or medical history
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‧ Article 7 (1) of the Framework Act on Employment Policy (Coming into force 6 months after promulgation)
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Broaden eligibility for childcare leave
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‧ Parents of children aged 6 and under and not enrolled in elementary school
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‧ Parents of children aged 8 (2nd grade in elementary school) or under
– Workers can request childcare leave for children born before 2008
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‧ Article 19 (1) of the Act on Equal Employment and Support for Work-Family Reconciliation (Coming into force right after promulgation)
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Social Policy
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Feature
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Before Revision
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After Revision
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Related Law & Implementation Date
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Expand support with wage peaksystem introduction
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‧ Support provided to:
employees receiving annual salaries of $5,400 or less after wage reduction
‧ (Requirements for subsidy)
<Retirement age extension type>
Reduction of 20% or more of wage from certain age after 50 (for priority companies: 10%)
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‧ Support provided to:
employees receiving annual salaries of $6,400 or less after wage reduction
‧ (Requirements for subsidy)
<Retirement age extension type>
Reduction of 10% or more of wage from certain age after 55 for the 1st year, at the 2nd year 15% or more and at the 3rd~5th year 20% or more (reduced by 10% or more for workplaces with fewer than 300 employees)
<Re-employment type>
Companies with a retirement age of 55 or older.
Rehiring retired employees by reducing their wages by 20% or more (for priority companies: 10%)
‧ (Maximum limit)
For companies extending their retirement age up to 60 or older, up to $7,800 per year in subsidies shall be given, $6,700 per year if extended to 56~59, for a maximum 5 years
* Regulation on subsidy for re-employment shall not be changed (up to $5,600 per year, for a maximum 5 years)
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‧ Article 25 of the Enforcement Decree for the Employment Insurance Act
(2014. 1. 1)
* Those already receiving a subsidy shall follow the pre-existing rules.
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Subsidy for extending employment of retirement-age workers
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‧ Support provided to:
All workplaces
‧ (Requirements for subsidy)
<Retirement age extension type>
Extending retirement age to 58 (or older) or abolishing retirement age
<Re-employment type>
Companies rehiring employees retired at 58 or older
‧ (Benefit period)
<Re-employment type>
Maximum 2 years* with upper limit of $3,300 per year
* 6 months (for priority companies: 1 year) if retired employee is re-employed for 1 ~ 3 years, 1 year (for priority companies:
2 years) if re-employed for more than 3 years
Maximum 2 years* with upper limit of $3,300 per year
* 6 months (for priority companies: 1 year) if retired employee is re-employed for 1 ~ 3 years, 1 year (for priority companies:
2 years) if re-employed for more than 3 years
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‧ Support provided to:
Workplaces with fewer than 300 employees
‧ (Requirements for subsidy)
<Retirement age extension type>
Extending retirement age to 60 (or older) or abolishing retirement age
<Re-employment type>
Companies rehiring employees retired at 55 or older
‧ (Benefit period)
<Re-employment type>
Maximum 1 year* with upper limit of $3,300 per year
* 6 months if retired employee is re-employed for 1~ 3 years, 1 year if re-employed for 3 years or longer
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‧ Enforcement Decree for the Employment Insurance Act
* Pre-existing rules shall apply to workplaces already receiving subsidies
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Increasing mandatory rate for employment of the disabled
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‧ Mandatory rate for employment of the disabled in 2013: 2.5%
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ㆍMandatory rate for employment of the disabled in 2014: 2.7%
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‧ Article 25 of the Enforcement Decree for the Employment Promotion & Vocational Rehabilitation for the Disabled Act
(2014. 1. 1)
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Standards for establishing and submitting plans for active employment measures
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‧ Company shall establish and submit plans for active employment measures if the average proportion of female staff is below 60% of the average in similar companies in the similar industry
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ㆍCompany shall establish and submit plans for active employment measures if the average proportion of female staff is below 70% of the average in similar companies in the similar industry
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‧ Annex 2 of the Enforcement Rule for the Act on Equal Employment & Support for Work-Family Reconciliation (2014. 1. 1)
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Regulation on upper limit of employment insurance premium
(2 year extension)
(2 year extension)
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‧ If total remuneration exceeds 115% of total wage, insurance premium for excess amount shall be reduced for 3 years (2011~2013)
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‧ Regulation on maximum limit shall remain until 2015 (to be abolished in 2016) but maximum limit shall be 120% in 2014 and 125% in 2015.
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‧ Article 2 of the Addenda to the Enforcement Decree for the Act on the Collection, Etc., of Premiums for Employment Insurance & Industrial Accident Compensation Insurance (2014. 1. 1)
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Expanding scope of subsidy application for recruiting substitute workers
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‧ Childcare leave
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‧ Maternity leave or childcare leave
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‧ Article 29 (1-3) of the Enforcement Decree for the Employment Insurance Act
(2014. 1. 1)
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Promoting job creation through working hour reduction
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‧ Wages shall be subsidized if the number of workers increases
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‧ Wages and cost of installing facilities shall be subsidized if the number of workers increases. Wages of workers whose working hours are reduced shall be subsidized
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‧ Article 17 (1-1) of the Enforcement Decree for Employment Insurance Act
(2014. 1. 1)
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Mandatory extension of retirement age to 60
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‧ Companies should extend retirement age to 60
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‧ Companies shall extend their retirement age to 60
* After enforcement date, retirement age will be legally regarded as 60 even for those companies failing to extend retirement age
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‧ Article 19 of the Act on Prohibition of Age Discrimination in Employment & Aged Employment Promotion
(Enforcement date)
– Workplaces with 300 or more employees: 2016.1. 1
– Workplaces with fewer than 300 employees:
2017 .1 .1
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Increasing benefit for multiple births
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‧ Maternity leave benefit for multiple births
– for priority companies: the Employment Insurance Fund shall pay for the entire 90 days
– for large companies: the employer shall pay for 60 days, Employment Insurance Fund shall pay for the remaining 30 days
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‧ Extending leave period for multiple births
– for priority companies: the Employment Insurance Fund shall pay for the entire 120 days
– for large companies: the employer shall pay for 75 days, Employment Insurance Fund shall pay for the remaining 45 days
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‧ Article 76 of the Employment Insurance Act (2014. 7. 1)
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Occupational Safety & Health & Industrial Accident Insurance
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Feature
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Before Revision
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After Revision
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Related Law & Implementation Date
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For business contract out, employer obligated to provide thecontractor with information on safety and health hazards
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(New)
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‧ An employer who contracts out harmful or hazardous work such as remodeling or dismantling of equipment/facilities
(e.g. reactor, distillation column, pipes, or storage tanks etc.) that involve manufacture, use, transport or storage of chemical substances shall provide the contractors with information on safety and health hazards
(Penalty) Persons violating Article 29 (5) shall be punished with imprisonment of 1 year or less, or a fine not exceeding $9,265
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Occupational Safety & Health Act, Article 29 (5) (2014.3.13)
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Increased responsibility of employer over thecontractors when contracting business out
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‧ If deemed necessary, an employer shall demand that the contractors correct an identified violation
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‧ Employers who contract work out shall, if their contractors violate this Act in relation to the relevant work, take necessary measures to correct the violation.
(Penalty) Any person violating Article 29 (6) shall be punished with a fine not exceeding $4,632
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Occupational Safety & Health Act, Article 29 (6) (2014.3.13)
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Scope of businesses required to have a safety and health manager extended
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(New)
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‧ Workplaces ordinarily employing 300 workers or more in agriculture, fishing, computer programming, system integration and management services, financial and insurance activities, etc. are also required to have a safety and health manager
※ Workplaces employing only office workers are exempted
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Enforcement Decree of the Occupational Safety & Health Act, Article 2 (2) (2014.1.1)
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Scope of businesses required to operate an occupational safety and health committee extended
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(New)
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‧ Workplaces ordinarily employing 300 workers or more in agriculture, fishing, computer programming, system integration and management services, financial and insurance activities, etc. are also required to run a safety and health committee
※ Workplaces employing only office workers are exempted
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Enforcement Decree of the Occupational Safety & Health Act, Article 25 (2014.1.1)
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Employers obligated to report manufactur–ing, etc. of chemical substances
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(New)
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‧ A person who manufactures, imports, or sells chemical substances shall report how they are used and the quantity manufactured to the Minister of Environment every year
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Act on the Registration & Evaluation, etc. of Chemical Substances, Article 8
(2015.1.1)
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Scope of registration of chemical substances (and their hazards) extended
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‧ Manufacturing or importing 0.1 tons or more of new chemical substances/year
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‧ A person who manufactures or imports 1 ton or more of new or existing chemical substances/year shall register and submit materials on evaluation of their hazards
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Act on the Registration & Evaluation, etc. of Chemical Substances, Article 10 & 18
(2015.1.1)
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