Major laws and systems which influence business activities have been revised or established. Businesses should check new laws and systems coming into effect in 2012. In particular, there are huge changes to the Employee Retirement Benefit Security Act and unification of bargaining channels in workplaces with multiple trade unions, something which was postponed to next year.
1. 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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Stating working conditions when altering
working conditions
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Working conditions should be stated only when a labor contract is made.
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Working conditions shall be stated not only when a labor contract is made but also when working conditions are altered.
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Labor Standard Act, Article 17, Paragraph 1
(2012.1.1.)
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Strengthening employer obligation to issue a labor contract
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A labor contract shall be issued to the worker upon his/her request.
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Labor contracts should be issued even if the worker has not requested it. However, if collective agreements or Rules of Employment have been altered due to Presidential Decree, labor contracts shall be issued to the worker upon his/her request.
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Labor Standard Act, Article 17, Paragraph 2; Enforcement Decree, Article 8-2
(2012.1.1.)
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Priority on setting retirement benefit scheme in new workplaces
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<New>
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On principle, after the implementation date, an employer should set the retirement benefit scheme for new businesses within the first year.
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Employee Retirement Benefit Security Act, Article 5
(2012.7.26.)
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Strengthening flexibility in setting up Retirement Pension System
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<New>
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To provide options for workers, employers may set up a Retirement Pension Plan as a mix of a Defined Benefit Pension Plan and Defined Contribution Pension Plan.
☞ Whatever they choose, employers shall make a Retirement Pension Plan that has a combined rate of 100%.
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Employee Retirement Benefit Security Act, Article 6
(2012.7.26.)
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Setting conditions for interim payment of retirement benefit
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There were no separate conditions for interim payment of retirement benefit
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Conditions established for interim payment in cases decided by Presidential Decree, such as housing purchases.
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Employee Retirement Benefit Security Act, Article 8, Paragraph 2
(2012.7.26.)
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Ensuring the solvency of the Defined Benefit Pension Plan
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<New>
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A retirement pension trustee must monitor the level of reserve funds by the end of every business year and inform the employer within 6 months.
☞ If the reserve fund is lower than the minimum level, the retirement pension trustee shall inform the employee representative and the employer should make an effort to restore the reserve fund up to at least the minimum level.
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Employee Retirement Benefit Security Act, Article 16, Paragraph 2, 3
(2012.7.26.)
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Strengthening continuity of retirement pension system
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<New>
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A beneficiary may receive retirement benefits (either Defined Benefit Pension Plan or Defined Contribution Pension Plan) into his/her designated individual retirement account if not decided otherwise by Presidential Decree.
If the beneficiary of a Defined Contribution Pension Plan retires, the retirement benefit shall be transferred to his/her individual retirement account.
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Employee Retirement Benefit Security Act, Article 17, Paragraph 4; Article 19, Paragraph 2; and Article 20, Paragraph 5,6
(2012.7.26.)
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Retirement benefit system expanded to workplaces with
4 or fewer employees
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Retirement benefit system shall be expanded to workplaces with 4 or fewer workers, from December 1, 2010
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From December 1, 2010 to December 31, 2012, employers shall pay 50% of the contribution amount.
☞ From Jan. 1, 2013, employers shall pay 100%.
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Employee Retirement Benefit Security Act Addenda, Article 8, Paragraph 2-1
(2012.1.1.)
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Work hour reduction benefit for childcare
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<New>
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Workers may receive a certain benefit amount when they take time off for childcare.
(Childcare leave benefit will consider the level of working hour reduction)
☞ The benefit amount shall be calculated by multiplying the percentage of remaining working hours by original amount of childcare leave benefit.
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Employment Insurance Act, Article73-2 (2011.9.22)
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2. Collective 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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Implementation of the multiple union system in workplaces
with multiple trade unions
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Regulation of unifying bargaining channels to be postponed in workplaces with multiple trade unions existing before December 31, 2009.
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Regulation of unifying bargaining channels shall be applied to workplaces with multiple trade unions existing before Dec 31, 2009.
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Trade Union & Labor Relations Adjustment Act / Addenda,
Article 6
(2012.7.1.)
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3. 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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Minimum Wage
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₩4,320 per hour
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₩4,580 per hour, ₩36,640 per day
(8 hours), ₩957,220
(40 hour work week)
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Announcement of minimum wage
for 2012
(2012.1.1)
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Increasing rate of mandatory employment of disabled workers
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2.3% of workforce
in 2011
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2.5% will be applied from 2012 to 2013.
※ Further increased to 2.7% in 2014
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Enforcement Decree of the Act on Employment Promotion & Vocational Rehabilitation for Disabled Persons, Article 25, Paragraph 1
(2012.1.1)
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4. Occupational Safety and 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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Strengthening employer obligation to take industrial accident prevention measures
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Employers should take measures to prevent industrial accidents if part of the work is done by contractors.
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Employers should take measures to prevent industrial accidents when the entire work as well as part of the work is done by contractors.
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Occupational Safety & Health Act, Article 29, Paragraph 1
(2012.1.26.)
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Employer obligation to provide space for sanitation facilities
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<New>
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Employers shall provide space to install sanitation facilities or allow workers of their contractor to use their own facilities.
– If violated, the employer shall be fined no more than 5 million Korean won.
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Occupational Safety & Health Act,
Article 29, Paragraph 8
(2012.1.26.)
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Revision of obligation to prepare and maintain Material Safety Data Sheets (MSDS)
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Employers are responsible for preparing, providing, and maintaining MSDS.
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Persons providing chemical substances shall be responsible for preparing and providing MSDS.
– Employer’s obligation shall be to post or keep the MSDS
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Occupational Safety & Health Act,
Article 41
(2012.1.26.)
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Increasing fines for failure to cooperate with illness investigations
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If an employer does not cooperate with an illness investigation, he/she shall be fined no more than 3 million Korean won.
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The fine for failure to cooperate with an illness investigation (through refusal, interference or evasion), shall be adjusted to no more than 15 million Korean won.
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Occupational Safety & Health Act,
Article 43-2, Paragraph 2; and Article 72, Paragraph 4
(2012.1.26.)
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Expansion of obligation to submit an Industrial Accident Prevention Plan
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Only two types of business were required to submit an Industrial Accident Prevention Plans.
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The number of business types required to submit an Industrial Accident Prevention Plan is expanded to 10.
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Enforcement Decree of the Occupational Safety & Health Act, Article 33-2
(2012.1.26.)
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Exemptions expanded for safety tests and safety certificates
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Safety certificates or safety tests were required even for equipment already approved under another law.
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Safety certificates are not required for storage tanks already tested under the Safety Control of Dangerous Substances Act. Safety tests are not required for internal inspections under Installation, Maintenance and Safety Control of Fire-Fighting System Act or regular checks under the Safety Control of Dangerous Substances Act.
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Enforcement Rules of Occupational Safety & Health Act, Article 58-2 and Article 73
(2012.1.26.)
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Simplification of documents to be submitted for the Industrial Accident Prevention Plan
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The documents required to be submitted as part of the Industrial Accident Prevention Plan was the same for all cases.
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The documents required to be submitted is simplified when installing or transporting dangerous machinery, instruments or equipment (as decided by ordinance of the Ministry of Labor), or changing important mechanical components.
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Enforcement Rules of the Occupational Safety & Health Act, Article 121, Paragraph 1
(2012.1.26.)
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Revision of occupational safety & health education frequency
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Workers shall receive safety education every month or every quarter. Managers shall receive such education twice or once a year.
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Workers shall receive quarterly education. Managers shall receive annual education.
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Enforcement Rules of Occupational Safety & Health Act, Article 33, Paragraph 1
(2012.1.26.
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