1.

Reduced Working Hours

President Lee aims to implement broad working hour-reduction measures. The administration plans to introduce support measures for companies adopting a 4.5-day workweek. During his campaign, President Lee emphasized that the goal is to reduce Korea’s average working hours below the OECD average whilst maintaining the same level of wages.
 

2.

Repeal of Comprehensive Wage System

The comprehensive wage system is a wage calculation arrangement that many multinational companies use. This is typically implemented by adding a provision in the employment contract stating that the employee will receive a fixed amount as monthly salary and that such fixed amount will cover all or part of overtime, nighttime or holiday work performed by the employee. This has been the subject of debate for many years with criticism that the system allows “unpaid” overtime work. President Lee’s pledges include explicitly prohibiting the comprehensive wage system and implementing a new requirement that would force employers to track employees’ working hours accurately (e.g., mandatory clock-in, clock-out).
 

3.

Promotion of Annual Leave

To promote the use of annual leave, measures such as shortening the paid annual leave eligibility threshold from one year to six months of employment and an annual leave savings system to allow employees to carry over unused annual leave days may be introduced.
 

4.

Extension of Retirement Age

The mandatory retirement age is expected to be gradually extended to 65 to align with the national pension eligibility age. Rather than pursuing concurrent wage system reforms to address labor cost concerns, the government will instead support voluntary labor-management agreements on improving wage structures and working conditions.
 

5.

Extension of the Labor Standards Act to Small Businesses

The Labor Standards Act may expand to fully cover businesses with fewer than five employees, ending Korea’s long-standing exemption for small enterprises. This change could have sweeping implications for small businesses, as they would become subject to the same employee protection measures as larger companies, including having to meet the strict just cause standard for terminations, paying overtime premiums, granting paid annual leave, and offering holiday pay.
 

6.

Enhanced Union Rights

President Lee’s flagship labor initiative centers on expanding collective bargaining rights through the controversial “Yellow Envelope Act” – a legislation that has faced two presidential vetoes under the previous administration. This reform will allow subcontractor workers to negotiate directly with the contracting entity and significantly limit businesses’ ability to claim damages from strikes and other industrial actions (whether or not legal) and also other types of union activities.
 

7.

Industry Level Bargaining

The area most emphasized by President Lee in his policy pledges is the guarantee of workers’ rights and the expansion of the role of labor unions. His representative pledge in this regard is to promote industry level bargaining and we expect the administration to start with public sector industry-wide collective bargaining agreements before expanding to private enterprises. The administration will seek to expand the binding force of collective bargaining agreements by requiring that, even in cases where there is no collective agreement or an unfavorable one has been concluded, a collective bargaining agreement with equal conditions in the same industry, region, or sector will be applied, effectively standardizing conditions across entire industries and regions.
 

8.

Anti-Discrimination: Equal Work, Equal Pay

The principle of “equal pay for equal work” may be legally codified with concrete enforcement mechanisms. Companies will be required to disclose wage distribution data, including job categories, ranks, tenure, and salary levels to enable a systematic monitoring of pay equity.
 
Employment equality wage disclosure requirements will mandate publication of gender employment ratios and their respective average wages. The administration plans to introduce a so-called “employment insurance experience rating system” that increases unemployment insurance premiums for companies with an excessive number of terminations or non-regular employee hirings.