On April 29, 2021, a total of eight proposed amendments to labor-related laws, including the Labor Standards Act (the “LSA”), were approved in the plenary session of the National Assembly and were promulgated into law on May 28, 2021 (collectively the “Amendments” and “Amendment” singularly).

Different effective dates have been specified for the Amendments, as some are expected to take effect immediately, while others are granted a one-year grace period.  In addition to the introduction of regulations imposing criminal sanctions for violations, the Amendments include several issues that companies should note with regard to HR management, including the duty to issue a wage statement and the duty of safety managers and health managers.  In this regard, we provide further guidance for companies on the Amendments as follows:
 

1.   Changes to LSA (Effective from November 19, 2021) 

• The Labor Relations Commission (the “LRC”) is allowed to issue an order of remedy even for an employee whose fixed-term employment has been expired or who has reached the age of retirement.  Accordingly, even in cases where it is not possible for the company to reinstate the employee to his or her former position, the LRC may issue a relief order requiring the employer to pay money and valuables equivalent to wages that the employee concerned would have received during the period of dismissal. 

• The upper limit of the penalty for non-compliance with the LRC’s relief order, which was up to KRW 20 million for each occurrence of non-compliance (which can be levied up to four times in total), has now been increased to KRW 30 million (with no change to the frequency). 

• Under the amended LSA, when paying wages to employees, an employer is obligated to issue a wage statement to employees either in writing or electronically specifying the matters prescribed by the Presidential Decree, including wage items and calculation method. 

2.   Key Changes to Equal Employment Opportunity and Work-Family Balance Assistance Act (the “Equal Employment Act”) 

• Newly added provisions expand the reasons for childcare leave by pregnant employees.  In the past, childcare leave was allowed only for employees who had children aged eight or younger or in the second grade or lower.  However, the Amendment expands the scope of eligibility for granting childcare leave to female employees who are pregnant so that they may use childcare leave if they have a risk of miscarriage or stillbirth.  In addition, the current law enables employees to split childcare leave for up to two periods, but under the Amendment, the childcare leave that a pregnant employee uses for maternity protection will not be subject to the split limit.  This Amendment will take effect on November 19, 2021. 

• The law has also been changed to introduce relief measures by the LRC for violations of the Equal Employment Act, enabling the LRC to issue corrective orders to cease discriminatory acts, improve working terms and conditions, and award appropriate compensation.  Furthermore, this Amendment provides additional regulations prohibiting disadvantageous treatment of employees who file a request for relief (a violation may result in an imprisonment of up to three years or a fine of up to KRW 30 million) and imposing administrative fines of up to KRW 100 million for violating the confirmed corrective orders without justifiable reasons.  This Amendment will take effect on May 19, 2022.

3.   Key Changes to Industrial Accident Compensation Insurance Act (Effective from January 1, 2022) 

• Provisions requiring advance payment of funeral expenses have been added, allowing employers to pay funeral expenses in advance at the request of a bereaved family if the employee concerned is presumed to have died in the performance of his or her duties.

• Under this Amendment, in cases where an employee who suffered an industrial accident requires a long-term medical treatment or is expected to have a disability thereafter, the Korea Workers’ Compensation and Welfare Service may request the employer to prepare and submit a reinstatement work plan with respect to the said employee.  Accordingly, a new system to support the return-to-work of employees by the Korea Workers’ Compensation and Welfare Service has been established, in which support is to be based on the reinstatement work plan submitted.

4.   Key Changes to Occupational Safety and Health Act (the “OSHA”) (Effective from November 19, 2021) 

• Under the current OSHA, there is no provision restricting safety managers from concurrently serving as health managers and vice versa.  However, the amended OSHA requires employers of workplaces which fall under the size of a workplace prescribed by the Presidential Decree to have separate safety managers and health managers exclusively responsible for their designated duties, and a violation may result in a fine not exceeding KRW 5 million. 

• In case where a service recipient company and a service providing company perform work in the same location, the service recipient company is obligated to check the time and details of work and safety and health measures for the service providing company.  Additionally, the service recipient company is obligated to adjust the time and details of work if there is a risk of fire or explosion due to performance of work in the same location, and a violation may result in a fine not exceeding KRW 5 million.

5.   Key Changes to Protection of Fixed-Term and Part-Time Employees Act (the “PFPEA”) (Effective from May 18, 2021) 

• The amended PFPEA provides corporations with grounds for being exempt from vicarious liability, allowing employers who can demonstrate that they have exercised due care or supervision to prevent a violation of the PFPEA by the employers’ agents and employees to be exempt from paying a criminal fine.  

In addition to the above, the Amendments include various matters such as the enactment of the Act on the Protection and Support of Essential Employees, amendment of the Labor Relations Commission Act, and amendment of the Framework Act on Employment Policy.