Key HR Amendments for 2024

The following are updates on amendments to key labor and employment laws that companies should take note of in 2024.

1.	Minimum Hourly Wage for 2024: KRW 9,860 (The Minimum Wage Act, Effective as of January 1, 2024)

The minimum hourly wage for 2024 is KRW 9,860, which is an increase by KRW 240 (approximately 2.5%) compared to the 2023 rate.
The total amount of regular bonuses and cash welfare benefits are included in the calculation of minimum wage. This is a result of the amendment to the Minimum Wage Act in 2019, under which the application of such payments to the calculation of minimum wage would be implemented in phases from 2019 to 2024.

2.	Strengthening Employee Welfare Fund to Reduce the Welfare Gap (Article 46 of the Enforcement Decree of the Framework Act on Labor Welfare, Effective as of January 1, 2024)

If a company uses contributions from the employee welfare fund for welfare projects related to subcontracted workers (subcontractor employees and dispatched workers) within the company’s fiscal year, the company can use up to 90% (previously 80%) of the total amount of the contributions.
If the employer’s employee welfare fund foundation supports the improvement of welfare benefits for subcontracted workers, (i) the amount of the foundation’s basic assets that can be utilized is reduced to KRW 2 million or more (previously KRW 3 million or more) per employee, and (ii) the range of use regarding the foundation’s basic assets that can be used is increased to up to 30% of total basic assets regardless of disasters or business crises (previously 20%, but in case of disasters or business crises, 30%).

3.	Abolishment of Financial Stabilization Plan for the Defined Benefit (“DB”) Pension Plan (Articles 7 and 33 of the Enforcement Decree of the Act on the Guarantee of the Employees’ Retirement Benefits, Effective as of January 1, 2024)

The obligation to prepare, maintain and report a financial stabilization plan is abolished as the effectiveness of such plan, which was imposed on employers who did not meet the minimum accumulation ratio, has basically been made moot as a result of the enactment of a provision that imposes an administrative fine of up to KRW 10 million for non-fulfillment of the minimum accumulation duty under the DB Pension Plan from April 14, 2022.

4.	Additional Contents Required for Disability Awareness Improvement Training and Mitigation of the Reporting Obligation (Articles 5-2 and 27 of the Enforcement Decree of the Employment Promotion and Vocational Rehabilitation of Disabled Persons Act, Effective as of January 1, 2024)

“Respect for differences among disabilities” is added to the contents of disability awareness improvement training in the workplace, and the obligation for the employer to report its hiring plan regarding disabled workers is reduced from twice a year to once a year (in January of each year) in order to mitigate the administrative investigation burden of companies required to employ the disabled.

5.	Strengthening Transparency of Labor Union Financial Information (Articles 11-7 and 11-8 of the Enforcement Decree of the Trade Union and Labor Relations Adjustment Act, Effective as of January 1, 2024)

When a member of a labor union conducts an accounting audit of the union, his/her qualifications have been specified and such accounting auditor shall be a person who has experience in financial or accounting-related affairs or has extensive expertise or experience. In addition, a certified public accountant who is not a union member can conduct an accounting audit of the labor union’s financials.
A representative of the labor union shall announce (i) the results of the settlement of accounts, and (ii) the status of operations on the labor union’s bulletin board within two months after the end of each fiscal year. In addition, the representative of the labor union or affiliated organization shall announce the above results through the public disclosure system by April 30 of each year.

6.	Raising the Age of Grandchildren Who Receive Compensation Pensions for Bereaved Family Members Due to Occupational Accidents (Articles 63 and 64 of the Industrial Accident Compensation Insurance Act, Effective as of February 9, 2024)

If a worker dies due to an occupational accident, the age of eligibility for his/her grandchildren to receive compensation pension for bereaved families will be raised from 19 to 25 years old.

7.	Increasing the Tax Exemption Limit for Childcare Allowances (Article 12 of the Income Tax Act, Effective as of January 1, 2024)

The tax exemption limit for childcare allowances is increased from KRW 100,000 to KRW 200,000 per month according to an amendment of the Income Tax Act.

8.	Obligation to Submit Details of Overseas Stock-based Compensation Transactions (Article 164-5 of the Income Tax Act and Article 216-5 of the Enforcement Decree thereof, Effective as of January 1, 2024)

Pursuant to a provision newly enacted under the Income Tax Act to strengthen the identification of income, in case executives or employees of a domestic place of business of domestic or overseas corporations receive stock-based compensation (such as stock options, bonuses paid in money equivalent to stock or stock value) from the overseas parent company (or the head office/branch/controlling shareholder, etc.), the domestic place of business to which such officer or employee belongs to must submit the following:

–	(i) Details of the grant, exercise and payment of stock-based compensation;
–	(ii) Profits arising from such exercise and payment; and
–	(iii) Personal information of such executives or employees.

The submission deadline is March 10 of the year following the year of the taxable period in which the date of exercise or payment of stock-based compensation belongs. This provision is effective as of January 1, 2024, and will be applied to those who have exercised or received stock-based compensation on or after January 1, 2024.

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