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Major Issues Related to Labor

The companies with 10 or more full-time employees should allow employees to readwork regulations freely. The work regulations include their own policies and regulationsregarding working hours, designated breaks, safety, and sanitation. It is the employee’sresponsibility to learn about these policies when looking for a job.

01 Labor Standards Law

The Labor Standards Law was enacted to guarantee and improve the basic livelihood of workers and topromote the balanced development of the national economy by setting the standards for labor terms.

(1) Employment Contracts

Employment contracts are signed agreements addressing important items such as wages earned, workingtime, rest, day-off, vacations, etc.; the contents of the contract must be made in a written form betweenparties concerned.

(2) Applicable Range of the Labor Standards Law

  • Applicable to all companies or businesses that regularly employ five or more workers
  • Partially applicable to businesses or companies that regularly employ four or fewer workers
  • Salaries are to be paid directly on the date agreed upon, in full and in cash and at least once per month
  • Additional salary may be paid to employees who work overtime, at night, or on holidays
  • Employees can report violations of the Labor Standards Act (such as failure to receive wages orretirement benefits physical assault by employers or managers, forced overtime without the employee'sconsent, etc.) to the regional employment and labor administration and the labor improvementpromotion department. (Customer counseling center ☎1350)

(3) Delays in Salary Payments

Delayed payment of wage means a business owner does not pay wage on the regular designateddate and in this case, an employee can make a report to the competent local labor office.
When a related case is accepted by the local labor office, officials investigate the employee and theemployer. The employee can deal with the case more rapidly by preparing various materials (wageaccount, wage receipt, employment contract) to prove his or her argument.
  1. 1Counseling and submission of statements (Civil Service Center of local offices of education)
  2. 2Report to the Labor Office and due diligence
  3. 3Due diligence
  4. 4Order for corrective actions given to employer after due diligence
  5. 5If employers refuse to rectify the situation, the case may be sent to the court for prosecution

(4) Layoffs

Under the Labor Standards Act, for a lay-off by the employer to be valid, there should be a justifiablereason; without it, the employer cannot lay off the employee. An employee who has been dismissedwithout a justifiable reason can apply to the competent local labor committee for intervention, and if itis determined to be an unfair lay-off, he/she can go back to work. The application must be made within3 months after the date of lay-off.

(5) Working Hours

  • For businesses with more than 5 workers regulated by the Labor Standards Act, standard workinghours per week cannot exceed 40 hours excluding break time, and working hours per day cannotexceed 8 hours excluding break time.

(6) Breaks

  • A thirty-minute break is given for every 4 hours of work, and a 1 hour break is given for every 8 hours of work.
  • Employees are free to use their breaks as they wish, but will be unpaid during the break period.

(7) Overtime, Night Work, and Holiday Work

  • Extended working hours is defined as working more than 40 hours per week, or 8 hours per day.
  • Night work refers to work that takes place between 22:00 and 06:00.
  • Holiday work refers to work that takes place on national and contractual holidays.
  • Pay for overtime and night work is set at 1.5 times the regular wage.
  • Holiday work within 8 hours is set at 1.5 times the regular wage, and holiday work exceeding 8 hoursis set at 2 times the regular wage. (Law revised on March 20, 2018)
  • Extended work hours are allowed up to 12 hours per week if both parties agree.

(8) Shifts

  • Companies that require production facilities to be run 24 hours a day divide their employees into twoor three teams to work in shifts.
  • Some factories make arrangements whereby their employees rotate day and night shifts on a weekly basis.
  • Others group their employees into shifts on a permanent basis.

02 Minimum Wage System

This is the minimum amount of money that the government requires employers to pay to employees.

  • This applies to all businesses with one or more employees.
  • As of 2020, the minimum wage is KRW 8,590 per hour and KRW 68,720 per day.
  • The minimum wage applies to all labor workers under the Labor Standards Law.
Payment System
  • Salary contracts can be based on hourly, weekly, monthly, or yearly pay.
  • Generally, employees working in the manufacturing industry are paid on a monthly basis, while thoseworking in the construction industry are paid on a daily basis. Employees with hourly working contractshave their pay calculated by the hour, but most employees are paid on a monthly basis.
  • It is important to keep a record of your working hours and check that you are receiving the correctamount of money from your employer. Some companies keep timecards in order to maintain accuratetime records.

03 Workers Retirement Benefit Guarantee System

Employees who have worked for one year or more can receive severance pay

  • Only employees working in accordance with the Labor Standards Act will qualify for severance pay.
  • There is no severance pay granted to employees who work less than 15 hours per week.
  • If employees work in the same business for one year or more, they may receive severance pay.

04 Salary Compensation System

Employees who are unable to receive wages or retirement benefits after retirement due to the bankruptcyof the employer are guaranteed the following:

  • Salary for the final three months of work: from the planned retirement date or the date of actual retirement
  • Benefits for leave for the final three months of work: Benefits for leave for the final three months ofwork, from the planned retirement date or the date of actual retirement
  • Retirement benefits for the last three years of work: Legal retirement benefits for three years retroactivefrom the date of retirement (regular wages for 90 days)
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