The following is an update on several important HR/Labor law amendments for 2021: 

1.   Amendments to the Labor Standards Act (the "LSA")

• An amendment to the LSA now allows companies to stipulate and deliver working conditions using electronic documents (Article 17 (2) and Article 67 (3) / to be amended and enforced as of January 5, 2021).

• A new proviso has been added to the law to allow companies to omit preparing a list of employees for the daily workers employed for less than 30 days (a proviso to Article 41 (1) to be amended and enforced as of January 5, 2021).

• New provisions have been added to the law to allow companies to introduce a flexible working hour system with a unit period of up to six months (the previous limit was three months) (Article 51-2 and Article 116 (1) 3. to be newly established / to be amended as of January 5, 2021 and enforced in a phased manner from April 6, 2021).

• The law has also been changed to introduce a maximum measurement period for a selective working hour system which has been extended to three months, but this only applies to employees engaged in research of new products or new technologies, and if a measurement period exceeding one month is set (by way of the required written agreement with the employee representative), it is required to provide a rest period for 11 consecutive hours between working days, and to pay an additional allowance for hours exceeding 40 hours per week based on a monthly average (Article 52 / to be amended as of January 5, 2021 and enforced in a phased manner from April 6, 2021).

• The LSA also was amended to add a provision requiring employers to take appropriate measures for an employee who has worked overtime under special circumstances and per the employee’s consent and an approval by the Minister of Employment and Labor, such as implementing a medical check-up or granting a rest period, in order to protect the employee’s health and well-being (Article 53 (7) / to be amended as of January 5, 2021 and enforced as of April 6, 2021).

• Starting from July 1, 2021, the enforcement of the weekly maximum working hours of 52 hours (= 40 regular hours/week + 12 overtime hours/week), including overtime and holiday work, will be expanded to private companies regularly employing 5 to 49 employees (Article 2 (1) 7.).

• Starting from January 1, 2021, the holidays of government offices under the Regulations on Holidays of Government Offices and substitute holidays therefor will be applicable as paid holidays for private companies regularly employing 30 to 299 employees (this requirement already applied to employers with 300 or more employees), and to substitute the prescribed holidays with other working days, a company is required to reach a written agreement with the employee representative (Article 55 (2)).

2.   Amendments to the Equal Employment Opportunity and Work-Family Balance Assistance Act / to be enforced as of January 1, 2021)

• Starting from January 1, 2021, for private companies regularly employing 30 to 299 employees, if an employee applies for a reduction of working hours for the following reasons, the employer must grant it: to take care of his/her family or his/her own health, an employee who is 55 years or older to prepare for his/her retirement, and/or to allow an employee to pursue his/her studies.  The working hour reduction may be between 15 to 30 working hours (if the employee normally works a 40 hour per week schedule, a reduced work schedule could range between ten to 25 working hours per week).  The maximum period for the reduced working hour schedule is one year, and based on reasonable grounds (excluding study purposes), the period may be extended by up to two years (Article 22-3).

• Starting from December 8, 2020, a leave of absence for childcare may be split into three periods of leave (Article 19-4 (1)).

3.   Minimum hourly wage increased to KRW 8,720 in 2021 (to be enforced as of January 1, 2021)

• The minimum hourly wage in 2021 is KRW 8,720, which is an increase of about 1.5% compared to the 2020 minimum hourly wage KRW 8,590.  And among regular bonuses and cash welfare benefits, bonuses exceeding 15% of and welfare benefits exceeding 3% of the monthly calculated sum (KRW 1,822,480 based on 209 hours) of the 2021 minimum hourly wage (KRW 8,720) will be counted in calculation of the minimum wage (this is part of the phased expansion of application of such payments to the minimum wage calculation from 2019 to 2024).

4.   Amendment to the Employment Insurance Act

• Provisions have been added to the law to allow certain artists prescribed by the Employment Insurance Act, upon obtaining employment insurance and satisfaction of certain requirements, to receive job-seeking (unemployment) benefits in the case of involuntary job change.  Furthermore, if an insured artist cannot provide services due to childbirth, or miscarriage or stillbirth, she can receive maternity benefits, etc. (Article 77-2, 3, and 4 to be newly established / to be enforced as of July 1, 2021).

5.   Amendments to the Act on the Collection of Insurance Premiums, Etc. for Employment Insurance and Industrial Accident Compensation Insurance

• The law has been amended to temporarily operate a special reporting period regarding industrial accident insurance of employees in special types of employment, and if such an employee reports a valid insurance relationship within a certain period, he/she may be exempted from payment of all or part of the industrial accident compensation premiums, etc. (Article 22-3 and Article 22-4 / to be amended and enforced as of January 5, 2021).

• Provisions also have been added to the law that cover an employer who has executed service provision contract with a service provider.  Such an employer is required to insure the service provider via employment insurance, and if a service provision platform business operator executes a service provision platform contract with the business owner of a service provision business, he/she is required to report it to the Korea Workers’ Compensation & Welfare Service ("KCOMWEL"), and to conduct withholding on the employment insurance contributions of the service provider and the service provision business owner (Article 48-3 and 4 to be newly established / to be enforced as of July 1, 2021). 

6.   Amendment to the Industrial Accident Compensation Insurance Act

• This law has been amended so that a person who received medical care benefits can request confirmation from KCOMWEL on whether his/her contribution is excluded from the scope of the medical care benefits, and receive the overpaid amount.  Furthermore, a spouse (including a common law spouse) or a relative closer than a first cousin of the business owner of a small or medium-sized enterprise, and who provides service for the business, may be insured upon the approval of KCOMWEL (Article 31(1) and Article 41-2 to be newly established, Article 124(2) / to be enforced as of June 9, 2021).

7.   Amendment to the Wage Claim Guarantee Act

• Provisions have been added to this law so that salaries during the maternity leave period are included in the scope of substitute payment (Article 2 (3), Article 7 (2) 3. / to be enforced as of December 8, 2020, and if necessary, employees (including retirees) can apply for loans through the Ministry of Employment amd Labor for the cost of living, and the accounts to which the substitute payment has been paid can be protected from seizure. (Article 7-2, Article 11-2, Article 14, Article 19, and Article 23 / to be enforced as of June 9, 2021).

[Korean version]