practice area articles
By Robert Flemer, Christopher Mandel and Soojung Lee
Back to International Employment Law
KEY DEVELOPMENTS FOR 2020
Enhanced Parental and Family Leave
A recent amendment to the Equal Employment Opportunity and Work-Family Balance Assistance Act (the "Equal Employment Act") has significantly increased employees' rights to family-related unpaid leave and reduced working hours, as follows:
Paid paternity leave has been increased from three to ten days, and employees can now use it as two separate leave periods rather than having to use it continuously.
Childcare Leave and Reduced Hours
Under previous legislation, a parent with at least six months' continuous service could take up to one year of either (i) unpaid leave; (ii) reduced working hours (with pro-rata pay reduction); or (iii) a combination of the two, to take care of a child aged 8 years or less (or in the second grade or below). As a result of the recent amendment, parents of young children are now entitled to one additional year of reduced working hours.
Family-Care Leave and Reduced Hours
Under previous legislation, an employee with at least six months' continuous service was entitled to take up to 90 days' of unpaid family-care leave in one year to take care of a sick or elderly parent, parent-in-law or child. This family-care leave had to be taken in portions of at least 30 days at a time. Under the new law, grandparents and grandchildren are also included in the scope of 'family members' for the purpose of family-care leave. Moreover, an employee can use 10 of the 90 days on an individual basis to care for sick or elderly family members or to take care of children (e.g., attend school events). An additional change is also being phased in according to workforce size (from 1 January 2020 to 1 January 2022), which provides that employees will be entitled to reduced working hours (with pro-rata pay reduction) instead of taking family-care leave. Reduced hours may also be utilised for a wider variety of purposes, including an employee's own illness or injury (noting that there is no general legal right to sick leave in Korea for non-work-related illnesses), retirement preparations (for those aged 55 and over) and for academic study.
New Workplace Harassment Law
Korea's new workplace-harassment law has, for the first time, specifically prohibited non-sexual bullying and harassment in the workplace.
The new workplace harassment law requires employers to update their rules of employment - which is similar to an employee handbook and must generally be filed with the Labor Office - to reflect the new law. The law also obliged employers to respond to an allegation of workplace harassment in a similar manner to sexual harassment, requiring them to conduct a prompt investigation, maintain confidentiality, take protective measures and take any appropriate disciplinary action. However, the new workplace harassment law is somewhat less demanding of employers than existing law prohibiting sexual harassment in the workplace. For example, although the new workplace harassment law also requires an employer to promptly investigate an allegation of harassment, unlike the sexual harassment law, it does not impose any express fines or penalties for failure to do so. Rather, failure to follow the law and promptly investigate could lead to a comprehensive labor audit if reported to the Labor Office. However, retaliation is a serious criminal offence under both laws.
Despite the workplace harassment law being less exacting on employers than the sexual harassment law, many employees are aware of their rights under the new law and may well rely on the law to file internal grievances or lodge complaints with the Labor Office.
The South Korean Government has taken significant measures, such as temporarily shutting down schools and day care centres as a result of the coronavirus outbreak. Operation of schools and day care centres have gradually resumed since June. On the employment side, the Ministry of Employment and Labor ("MOEL") has published guidelines for how businesses should act during this crisis. Under the relevant laws, private employers do not have significant direct legal duties to deal with this type of infectious disease, although all employers do have a general duty to provide a safe workplace and can be liable to employees for civil damages if any workplace injury or illness is caused by the employer's negligence. Moreover, employers are required to comply with any orders issued by competent Government authorities (such as the Ministry of Health and Welfare or relevant regional Government) to take protective measures against an infectious-disease outbreak. Such measures may include temporarily shutting down a workplace and disinfecting it. Employers also have a general duty to prohibit or restrict the work of an employee who is infected by a contagious disease, in accordance with the diagnosis of a doctor, and to report any detected cases of certain infectious diseases—which would include COVID-19—to a public health clinic.
Payment of Wages & Government Subsidies
If the Government orders a workplace to be shut down due to a confirmed or suspected case of coronavirus, the employer is not legally required to pay any wages to the employees who work at the shut-down location. However, the Government recommends providing employees with pay to the extent possible.
If an employer closes down a work location or otherwise mandatorily places any employees on furlough or reduced hours at its own initiative without any confirmed or suspected case—for example, as a mere precaution due to fears of coronavirus, or because of loss of business due to coronavirus—the employer must pay a 'shutdown allowance' of at least 70% of an employee's average wage or 100% of the employee's ordinary wage, whichever is lower.
The Government will provide an employment-retention subsidy to help defray the cost of the shutdown allowance. This subsidy must be claimed by the employer and is subject to various conditions. The amount of the subsidy (subject to a KRW66,000 per person per day cap and a 180-day limit per company) is, at the time of writing: (i) 90% for employers below a certain workforce-size threshold of between 100 and 500 employees, depending on the industry; and (ii) 2/3 or 3/4 depending on whether one is in a 'special employment support' industry (e.g., travel). The 90% subsidy rate is set to expire after June 2020, except for employers in 'special employment support' industries, for whom these increased rates are to continue through September 2020 (although these periods are likely to be extended).
Even if the workplace has not shut down, in the event that an employee is unable to work due to being hospitalized/quarantined as a confirmed or suspected carrier of COVID-19, the employer is not legally required to pay wages for the period in which the employee cannot work. However, again, employers are recommended to pay wages to the extent possible, and can apply for a Government subsidy of up to KRW 130,000 (approximately $108 USD) per day to support offering paid leave to those employees. If an employer applies for such subsidies, as a condition of receiving these, it is legally required to grant paid leave to the employee and this must be equal to the value of the subsidy. In other cases, an employee can choose to use statutory annual leave or sick leave if any is available for use or permitted under company policy. Additionally, employees who use unpaid 'family-care leave' to take care of young children or other family members who have been quarantined can apply for a temporary Government subsidy (KRW 50,000 or roughly $42 USD per day) for up to five days.
KEY DEVELOPMENTS FOR 2019
Changes to working hours
An amendment to the Labor Standards Act (“Amendment”) came into force on 20 March 2018 and made the following changes:
- it reduced the maximum weekly working hours from a possible 68 hours per week to 52 hours per week;
- it defined “one week” for purposes of working hours as seven consecutive days (previously, the statute did not specify whether it meant a workweek or a calendar week); and
- it specified that for holiday work, the applicable pay rates would be time and a half for the first eight hours and double time for any work hours over eight.
The Amendment also included a phased introduction of the weekly working hour limit, based on the number of employees working for an employer. Businesses with 300 or more employees and public agencies were required to be compliant by 1 July 2018, businesses with 50 to 299 employees by 1 January 2020, and businesses with five to 49 employees by 1 July 2021. Additionally, the scope of businesses falling under the special categories regarding working hours was reduced from 26 types to five types and with respect to the 21 types of businesses that are now excluded, for businesses with 300 or more employees, the 52 working hours per week cap will be effective as of 1 July 2019.
Increased Ministry of Employment and Labor ("MOEL") enforcement
In March 2018, the MOEL announced its intent to gradually increase the number of inspection targets, and to conduct labor inspections that will have actual social impacts. We expect that in 2019, the MOEL will continue along this path, along with increased inspections concerning working hours and workplace safety inspections.
With regard to occupational health and safety matters, the Korean government has set “the establishment of a workplace guaranteeing workers’ lives and safety” as a key policy goal, with the aim to achieve a 50% reduction in the number of deaths due to occupational accidents from current levels by 2022. In this regard, the MOEL submitted a draft amendment to the Occupational Safety and Health Act on 1 November 2018 which aims to expand the responsibilities of service recipients and project owners (in the construction industry) in connection with workers’ safety and health in order to prevent tower crane accidents at worksites, which has drawn substantial social and media attention.
Employee relations/labor union issues
Over the last couple of years, labor unions in Korea have become more active in attempting to unionize industries that have not historically been unionized. To date, only a few international companies in the Korean IT industry have become unionized and unionization has been relatively uncommon in the Korean IT industry.
Given that unpaid overtime work has been a chronic issue in Korea's IT industry, and also in light of the reduction of working hours by legislative amendment (implemented in phases from July 2018), IT companies’ unionization may be a precursor for broader union developments across the industry. Developments at the top domestic IT companies are likely to impact broader industry practices, and may merit close attention going forward.