The following are updates on key HR/labor law amendments that companies should take note of now and in 2023.
 

1. The scope of protection under the Industrial Accident Compensation Insurance Act (“Act”) has been expanded for employees engaged in special types of employment (Effective as of July 1, 2023)

• Currently, employees who are engaged in special types of employment are protected under industrial accident compensation insurance only when they undertake work “exclusively” for one business.  Accordingly, when an employee works for multiple businesses through online platforms, etc., he/she has not been covered by such insurance.  To protect these employees, the exclusiveness requirement has been revoked and an employee who provides work-labor to multiple businesses through online platforms, etc. will be legally covered in case of an industrial accident.

2. Related amendments to the Act on the Collection of Insurance Premiums for Employment Insurance And Industrial Accident Compensation Insurance (Effective as of July 1, 2023)

• A business owner-employer and an employee engaged in special types of employment will each bear 50% of the premiums for industrial accident compensation insurance.  In case of certain occupations prescribed by the Presidential Decree, which is determined in consideration of the subordinate relationship between an owner-employer and an employee engaged in special types of employment, the owner-employer will bear the full amount of the insurance premiums.

• Special requirements will be imposed on “platform operators” as defined by the Act: platform operators will be responsible for administrated tasks related to industrial accident compensation insurance, such as reporting monthly remuneration, withholding industrial accident insurance premiums, and opening accounts for withholding and paying out industrial accident insurance premiums.

3. A child who suffers from a health issue or dies due to an industrial accident involving the pregnant mother will be protected by the Act (Effective as of January 12, 2023)

• Where a pregnant employee’s newborn child suffers from injury, illness, or disability or dies due to an industrial accident involving the employee-mother, an accident during commuting to or from work, or handling of or exposure to harmful factors in the course of performing her duties, these cases will be acknowledged as an occupational accident in line with Korean case law.  Such children with health issues will be covered under the Act as if the child was an employee of the business the pregnant employee belongs to and will be entitled to medical care benefits, disability benefits, personal care benefits, a funeral subsidy and occupational rehabilitation benefits.

4. The minimum hourly wage for 2023 will be KRW 9,620

• The 2023 minimum hourly wage is increased by KRW 460 compared to the 2022 minimum wage of KRW 9,160.

• Regular bonuses exceeding 5% of and cash welfare benefits exceeding 1% of the monthly calculated sum (KRW 2,010,580 based on 209 hours) of the 2023 minimum hourly wage (KRW 9,620) will be included in the calculation of minimum wage (this is part of the phased expansion of the application of such payments to the minimum wage calculation from 2019 to 2024).

5. Increase of the non-taxable cap for meal allowances (Effective as of January 1, 2023)

• With the amendment of the Income Tax Act, the non-taxable cap for a meal allowance will be increased from KRW 100,000 to KRW 200,000 per month.
   

In addition, the following are key changes to HR/Labor laws that took effect in the second half of this year:
 

1. Strengthening representation of employee representatives (Effective as of December 11, 2022)

• Starting from December 11, 2022, where there is no labor union in a company representing a majority of the employees, the employee representatives will be elected by said majority of the employees via direct, secret, and anonymous votes.

• Indirect elections may be held when a direct election is infeasible/impractical due to the peculiarities of the relevant business.  In such case, a majority of employees will elect delegates in proportion to the number of employees by department via direct, secret, and anonymous ballots, and a majority of the delegates will in turn elect employee representatives by direct, secret, and anonymous ballots.

• Previously, an employee needed recommendations from ten employees of the business or workplace to run for a position of employee representative.  After the amendment, any employee may run for this position without such recommendation.

2. Administrative fine to be imposed on business places not cooperating with the fact-finding survey on the status of workplace child care centers (Effective as of December 11, 2022)

• Under the Child Care Act, an owner-employer who runs a workplace of a certain size, as prescribed by the Presidential Decree, has an obligation to establish workplace child care centers or to provide entrusted child care services.  The Ministry of Health and Welfare conducts an annual fact-finding survey as to whether the applicable owner-employer have established workplace child care centers, and unless there are special circumstances, such owner-employers not cooperating with fact-finding survey may be subject to an administrative fine not exceeding KRW 100 million.

3. Requirement to establish rest areas (Effective as of August 18, 2022)

• An owner-employer’s obligation to establish rest areas under the Occupational Safety and Health Act has become compulsory.  Accordingly, in certain types of business places, as determined by the Presidential Decree based on the type of business and the number of regular employees, rest areas must be established in accordance with guidelines provided under the decree of the Ministry of Employment and Labor (the “MOEL”).  In case of a violation, an administrative fine not exceeding KRW 15 million may be imposed for not establishing rest areas, and an administrative fine not exceeding KRW 10 million may be imposed for not complying with the standards set forth in the decree of the MOEL.

• Where employees of a subcontracting company (subcontracted workers) perform work at the business place of a principal company, an administrative fine not exceeding KRW 15 million may be imposed on a principal company if a principal company does not provide places that are necessary for a subcontracting company to install the facilities, as determined by the decree of the MOEL or interferes with subcontracted workers’ use of rest areas.

4. Introduction of default option for management of retirement pensions (Effective as of July 12, 2022)

• Under the Employee Retirement Pension Security Act, a default option for management of one’s retirement pension has been introduced so that where a participant of the defined contribution retirement pension does not provide investment direction within the prescribed period, a retirement pension provider manages retirement pensions in the method designated in advance by employees through a labor-management agreement.
   

[Korean Version]