In 2012, many bills were discussed in the National Assembly regarding revision of existing labor laws and regulations; however, most of them remain pending due to the general and presidential elections. So far, there have been no major changes to labor laws or regulations.
Nevertheless, there still remain some concerns over those pending bills. They are mostly about welfare expansion, working hour reduction, extension of retirement age and mandatory hiring quotas. If passed, these bills are likely to negatively influence business conditions. Employers need to continue paying attention to legislative changes in 2013.
Individual Labor Relations
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Main Details
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Before
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Revision
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Applicable Law
(Enforcement date)
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In workplaces with 4 or fewer employees, employers shall pay 100% of the retirement plan contribution
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The contribution to be borne by employers is 50% for the period from Dec. 1, 2010 until Dec. 31, 2012
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Employer’s contribution is increased from 50% to 100% from Jan 1, 2013
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Subparagraph 2 of Article 8 (2) of the Addenda to theEmployee Retirement Benefit Security Act
(Jan. 1, 2013)
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<New>
Employers shall pay operating cost for retirement pension system
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–
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Under the retirement pension plan implemented as of July 26, 2012 with enforcement of the law, employers shall pay operating cost incurred from July 26, 2013.
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Article 2 of the Addenda to theEmployee Retirement Benefit Security Act
(July. 26, 2013)
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<New>
Public disclosure system of worker employment types
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–
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All workplaces with more than a certain number of employees (to be specified by Presidential Decree) are required to notify the public of the employment types of their workers
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Article 15 (2) of theFramework Act on Employment Policy
(coming into force 6 months after promulgation)
※ Passed in the Assembly plenary session on Nov. 22, 2012
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Social Policy
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Main Details
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Before
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Revision
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Applicable Law
(Enforcement date)
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Minimum wage
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KRW 4,580 ($4.26) per hour
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∙ KRW 4,860 ($4.52)
per hour
∙ Per day (8 working hrs): KRW 38,880
($36.16)
∙Per month:
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Announcement of minimum wage for 2013
(Jan. 1, 2013)
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Regardless of workplace size, employers are required to pay same rate of charge for subrogation payment for unpaid wages
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Employers employing fewer than 5 workers can pay less
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The provision to reduce charges for employers employing fewer than 5 people is removed
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Article 10 (1) of theWage Claim Guarantee Act (Jan. 1, 2013)
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Longer paternity leaves to be granted
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In workplaces with fewer than 300 employees, up to 3 days of paternity leave is granted
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3 ~ 5 days of paternity leave in workplaces with fewer than 300 employees
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Article 18(2) of theAct on Equal Employment & Support for Work-Family Reconciliation
(Feb. 2, 2013)
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Mandatory family care leave system
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Mandatory family care leave system in workplaces with
at least 300 workers
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In workplaces with fewer than 300 workers, employers must accede to employees’ requests for family care leave to take care of their family members suffering from disease, accidents, or old age (barring exceptional circumstances)
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Article 22(2) of theAct on Equal Employment & Support for Work-Family Reconciliation
(Feb. 2, 2013)
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Strict quota for employment of the disabled
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Quota for employment of the disabled applies to workplaces with more than 200 workers
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Workplaces with 100-200 workers are required to fulfill the quota for employment of the disabled or pay employment levies for non-compliance
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Article 3 of theAddenda to Employment Promotion & Vocational Rehabilitation for the Disabled Act
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Increased levies for failure to meet quota for employment of the disabled
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Employment levy (per disabled person per month) in 2012
* imposed levies according to rate of compliance with employment quota
– 1~50%: KRW 590,000
($549)
– 0%: KRW 957,000 ($890)
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Increased employment levies (per disabled person per month) in 2013
* imposed levies according to rate of compliance with employment quota
– 75% ~ :
KRW 626,000 ($582.7)
– 50~75% :
KRW 782,500 ($728.5)
– 1 ~ 50% :
KRW 939,000($875.3)
– 0% : KRW 1,015,740
($947)
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Government announcement for 2013
(Jan. 1, 2013)
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Occupational Safety & Industrial Accident Insurance
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Main Details
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Before
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Revision
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Applicable Law
(Enforcement date)
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Expanded scope of persons qualified to receive survivors’
compensation annuities
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Children and grandchildren aged less than 18
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Children and grandchildren aged less than 19
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Article 63 and 64 of the Industrial Accident Compensation Insurance Act (enters into force on the date of
promulgation)
※ passed in the Assembly plenary session on Nov. 22, 2012
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No age limit for husband qualified to receive compensation annuities
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aged 60 or older
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No age limit
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Article 63 of the Industrial Accident Compensation Insurance Act (enters into force on date of
promulgation)
※ passed in the Assembly plenary session on Nov. 22, 2012
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Bills Pending in the National Assembly
Many bills still remain pending in the National Assembly; however, employers need to watch the situation closely as the bills are likely to be passed in the near future. First, a bill prohibiting a wide range of discriminatory treatment against non-regular workers has been passed in the Parliamentary Committee on Environmental & Labor Affairs. If this bill passes in the Assembly plenary session, any differences in treatment at the workplace will be regarded as discrimination against non-regular workers. Thus, employers need to take extra caution not to become embroiled in legal disputes regarding discrimination against non-regular workers when implementing policies on benefits and wages, etc.
Many other bills (Refer to the following table) have passed the Parliamentary Committee on Environmental & Labor Affairs. After the long debate over restoring Hangul Day, it is likely to become an official holiday again in 2013 after ministerial meetings.
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Main Details
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Before
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Revision
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Applicable Law
(Enforcement date)
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Wider scope of treatment considered discriminatory against non-regular workers
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‘Discriminatory treatment’ refers to unfavorable
treatment in terms of wages and other working conditions
etc. without justifiable reasons
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Discriminatory treatment refers to unfavorable treatment in the following areas:
① wages, ② regular bonuses, ③ performance pay ④ other working conditions and welfare policies, etc.
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Article 2 and 3 of the Act on the Protection, etc., of Fixed-Term & Part-Time Employees, Article 2 (7) of the Act on the Protection, etc., of Dispatched Workers
※ passed in the Assembly plenary session on Nov. 21, 2012)
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Mandatory youth employment quota in public agencies
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Recommended
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Mandatory (3%)
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Article 5(1) of the Special Law to Promote Youth Employment
※ passed in the Assembly plenary session on Nov. 21, 2012
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< New>
Provide subsidies for workers put on unpaid leave for managerial reasons
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–
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Workers forced to take unpaid leave will be provided with a stipend.
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Article 21(1) of the Employment Insurance Act
※ passed in the Assembly plenary session on Nov. 21, 2012
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The government removed national holiday status for Hangul Day in 1991
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Hangul Day to regain official holiday status
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Regulation on Holidays for Government & Public Offices (pre-announcement of legislation: Nov. 8 ~ Dec. 18, 2012)
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