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

1. Expansion of the Scope of Protection Under the Industrial Accident Compensation Insurance Act (the “Act”) (Effective as of July 1, 2023)

• Currently, an employee who engages in special types of employment is eligible for industrial accident compensation insurance only when he/she undertakes work “exclusively” for a business.  Accordingly, in cases where an employee works for multiple businesses through online platforms, etc., he/she will not be covered by such insurance.  To protect these employees, the exclusivity requirement has been revoked and an employee who provides work-labor to multiple businesses will be legally covered in case of an industrial accident.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 who engages in special types of employment will each bear 50% of the premium for the industrial accident compensation insurance.  In case of certain occupations prescribed by the Presidential Decree, which are determined in consideration of the subordinate relationship between an owner/employer and an employee who is engaged in special types of employment, the owner/employer will bear the full amount of the insurance premium.

3. The Act’s Protection of Children Suffering from Health Issues or Dying from Pregnant Mother’s Industrial Accident (Effective as of January 12, 2023)

• Cases where a pregnant employee’s newborn child either suffers from an injury, illness or disability or dies due to an industrial accident involving the employee-mother (including an accident while commuting to or from work, or related to the handling of or exposure to harmful factors in the course of performing her duties) will be acknowledged as occupational accidents in line with Korean case law.  The children with ensuing health issues will be covered under the Act as if they were employees of the business that the pregnant employee worked for and will be entitled to medical care benefits, disability benefits, personal care benefits, a funeral subsidy and occupational rehabilitation benefits.

4. Minimum Hourly Wage of KRW 9,620 for 2023

• The 2023 minimum hourly wage has been increased by KRW 460 compared to the 2022 minimum wage of KRW 9,160 (the increased amount equals KRW 9,620).

• Regular bonuses exceeding 5% of and cash welfare benefits exceeding 1% of a monthly calculated sum equivalent to KRW 2,010,580 (calculated by converting the 2023 minimum hourly wage of KRW 9,620 into a monthly amount based on a time frame of 209 hours) will be included in the calculation of the 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 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 meal allowances will be increased from KRW 100,000 to KRW 200,000 per month.
   

In addition, we set forth below a summary of key updates to labor and employment laws that may be applied in a different manner to businesses depending on their number of employees.
 

1. Special Provision on Overtime Hours for Businesses with Less Than 30 Employees No Longer in Effect (as of January 1, 2023)

• Pursuant to the amendment to the Labor Standards Act in 2018, the weekly maximum working hours, including overtime and holiday work, was reduced from 68 hours to 52 hours (hereby referred to as the “Change”).  However, as a means of ensuring a smooth transition, the Change was applied gradually based on the number of employees.  For businesses with five or more employees, the Change became effective from July 1, 2021.

• Meanwhile, considering the difficulties businesses could face due to the reduction in working hours, businesses with five or more but less than 30 employees were permitted to have their employees work up to eight additional overtime hours per week until December 31, 2022.  Such special provision expired in the beginning of 2023.

2. Expansion of Businesses Subject to Obligation to Install Rest Facilities (Articles 128-2 and 175 (3) of the Occupational Safety and Health Act, etc., effective as of August 18, 2023)

• The amended Occupational Safety and Health Act took effect on August 18, 2022, requiring businesses to install rest facilities.

• Accordingly, a business that meets the standard prescribed by the Presidential Decree (i.e., type of business, number of full-time employees, etc.) shall have rest facilities that fulfill the installation and management standards prescribed by the Ordinance of the Ministry of Employment and Labor.  Failure to comply with this requirement by not installing rest facilities may result in an administrative fine of up to KRW 15 million and failure to comply with the installation and management standards may result in an administrative fine of up to KRW 10 million.

• For businesses with less than 50 full-time employees (in case of construction businesses, those whose construction costs are less than KRW 5 billion in total), this requirement will apply from August 18, 2023.

[Korean Version]