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MOEL Issues Labor Inspection Plan for 2025 On February 2025, the Ministry of Employment and Labor (“MOEL”) announced its Workplace Labor Inspection Plan for 2025. The key highlights of the plan are as follows: 1. Focus on Structural Reforms and High-Risk Industries The MOEL will shift the focus of its inspections from simply identifying individual legal violations to addressing industry-specific structural vulnerabilities that lead to non-compliance. Inspections will therefore prioritize identifying and resolving systemic risk factors that are tied to each industry sector. Further, the MOEL will strengthen its oversight in high-risk industries, considering factors such as business forecasts and regional industrial trends. Key sectors include construction and shipbuilding, where wage arrears frequently occur. In addition, the Seoul Regional Employment and Labor Office has designated the “Information and Communication, Specialized Science and Technology Service Industry” as a key business sector for labor inspections in 2025. 2. Implementation of Integrated Inspections The MOEL will conduct integrated inspections targeting workplaces classified as “complex-issue workplaces” - those deemed high-risk under both the Labor Standards Act (i.e., labor management violations) and the Industrial Safety and Health Act (i.e., occupational safety). This approach aims to enhance the effectiveness of inspections by identifying workplaces with overlapping vulnerabilities. For the construction industry, the MOEL will identify ten major construction companies with histories of serious accidents or frequent wage arrears, conducting inspections across all nationwide construction sites operated by these companies. Towards this end, the MOEL will: Roll out a data-driven screening system to identify high-risk workplaces; and Strengthen proactive inspections based on anonymous tips and/or employee reports. 3. Establishment of Objective Criteria for Special Inspections Until now, the MOEL has prioritized its special inspections on workplaces identified by outside sources such as media reports. In 2025, it will instead use quantified criteria such as: Economic damage caused by violations Number of affected workers Workplaces where workers die due to serious human rights violations (e.g., assault by employer, workplace harassment, sexual harassment) or excessive working hours will automatically qualify for special inspections. These special inspections will be conducted under the integrated inspection model outlined in Section 2 above. It is expected that the MOEL will release further details on its labor inspection protocols for 2025. [Korean Version]
2025.02.21

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Recent Supreme Court Decision on “Employee Status” under the Labor Standards Act The Supreme Court Ruled That a Hairstylist on a 100% Commission Contract with No Base Salary is an “Employee” under the Labor Standards Act (“LSA”) On February 20, 2025, the Supreme Court held that a hairstylist who worked under a service commission contract with the beauty salon owner was deemed an employee under the LSA. The Supreme Court also upheld the lower court’s decision that found the owner to be in violation of the LSA and the Employee Retirement Benefit Security Act due to its failure to provide the hairstylist with statutory severance pay and thus imposed a criminal fine on the owner (Supreme Court Decision 2023Do18735, February 20, 2025). In this case, the hairstylist was compensated under a 100% commission-based system without a base salary or fixed salary. However, taking into account various factors (e.g., set working hours, regular meetings for inquiries, obligation to perform cleaning tasks, imposition of late attendance penalties, etc.), it was difficult to assume that the hairstylist had substantial discretion over her work. Accordingly, the hairstylist was recognized as an employee under the LSA on the grounds that she was found to be subject to a subordinate labor relationship with the employer. Implications of Court Trends on Employee Status under the LSA As demonstrated by this Supreme Court decision, courts have recently relaxed the criteria for determining employee status under the LSA. The Court’s ruling in this case was significant as it reaffirmed the trend taken by the courts towards broadly recognizing employee status under the LSA not only for delegated debt collectors and freelance announcers but also for online platform workers, such as drivers for ride-hailing services. Even if the form of an employment contract is that of a service commission contract, under which compensation is based solely on commissions without a base salary, the individual may still be classified as an employee under the LSA if a subordinate relationship is found where the employer retains a significant degree of supervision and control. This determination depends on various factors, including (i) whether the working hours and place of work are prescribed in practice, and (ii) whether the individual suffers any disadvantage by not complying with the employer’s supervision and control. In light of the above, it is advisable for businesses to proactively consider strategies for mitigating and resolving potential risks arising from various types of agreements, including delegation and commission-based contracts. [Korean Version]
2025.03.24

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Korean Agency for Technology and Standards (“KATS”) Announces 2025 Product Safety Investigation Roadmap KATS released on January 15, 2025 its roadmap for product safety investigations in 2025, targeting the products and objectives listed below. 1. Priority Items Subject to Investigations in 2025 As part of KATS’ annual practice of selecting “priority products” having above average incidences of non-compliance with safety standards or high likelihood of causing fires or accidents, KATS has identified 58 priority products for regular investigations in 2025. Among the priority products from 2024, 35 items remain on this year’s list, such as strollers, children’s bicycles, walking aids for the elderly, secondary batteries, and electric seating cushions. Further, 23 priority items have been newly added for 2025, including infant chairs, children’s textile products, children’s sports equipment, oil heaters, protective hiking helmets, computer power supplies, and electric ranges. The 58 items are broken down by category in the table below. Category Priority Products in 2025 *Products that are newly added or have details changed in 2024 are bolded and underlined Electrical Products Cables (nominal area of 96 mm2 or less), power plugs and sockets, small-sized power converters for household use, electric seating cushions (DC), electric seating cushions (AC), electric mats, cable reels, steam thawing machines, electric heating pads (AC), range hoods, electric heating cabinets, money counting machines, batteries, electric blankets, LED lamps (modules), air conditioners, electric mattresses, dimmers, heaters for animal incubation and breeding, electric ovens, electric insect repellents, electric dryers, hair curlers, computer power supplies, electric ranges, electric rice cookers, electric portable grills (27 items) Daily Products Protective helmets for vehicles, protective eyewear for vehicles, furniture (limited to dressers for home and filing cabinets for the office with a height of 762 mm or higher), double eyelid tapes, eyelash thermoforming devices, portable laser devices, winter/fashion/sports masks, oil heaters, snowboards, hiking helmets, small step ladders, roller sports helmets, sports life jackets, buoyancy aids, general bicycles (15 items) Children’s Products Children’s products made of synthetic resin, children’s bicycles, children’s leather products, children’s eyeglass frames (including sunglasses), children’s accessories, children’s kick scooters, children’s furniture, children’s skateboards, toddlers’ tricycles, strollers, children’s inline skates, children’s play equipment, children’s umbrellas and parasols, children’s sports protection equipment (protective gear and safety helmets), infant chairs, children’s textile products (16 items) 2. Product Safety Management - Points of Emphasis KATS also announced that it will prioritize in 2025 a number of product safety policies related to overseas direct-purchase products, unsafe local products (such as those having caused fires or accidents in Korea), and increased cooperation among the relevant agencies to curb illegal products in the market. More specifically, KATS plans to implement: (i) more safety surveys on overseas direct purchase products and strengthened monitoring of harmful products; (ii) safety surveys on potential fire or accident risks of domestically distributed products; (iii) greater coordination between the National Police Agency and the local governments to conduct crackdowns on the distribution of illegal products, such as non-KC certified products; and (iv) tighter oversight of recalls to reduce the number of recalled products in the market. In particular, KATS plans to conduct a total of five safety surveys on 4,700 products in 2025. As to overseas direct-purchase products, it plans to survey more than 1,000 products, more than double the 450 products surveyed in 2024. Additionally, it plans to conduct routine safety investigations on products that pose risk of fires or accidents. Accordingly, we advise companies to conduct careful reviews of their products for compliance with safety certification requirements and for consumer safety risks, as well as closely monitor the products selected for KATS’ many investigations. [Korean Version]
2025.03.14

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KFTC Proposes Amendment to Guidelines on the Operation and Evaluation of Fair Trade Voluntary Compliance Programs (“CP”) On June 21, 2024, the Korea Fair Trade Commission (“KFTC”) had introduced the fair trade voluntary compliance program (“CP”) whereby companies could voluntarily bring themselves into compliance with fair trade regulations in exchange for various incentives such as reduction of administrative fines. Since the initial launch of the program, the KFTC has been closely monitoring and analyzing the market reactions and has gathered feedback through various channels including town hall discussions with industry stakeholders to identify areas of possible improvements. On March 11, 2025, the KFTC announced its proposed amendment to the “Guidelines on the Operation and Evaluation of Fair Trade Voluntary Compliance Program (CP)” (enacted on June 17, 2024 and became effective on June 21, 2024; the “Guidelines”) that purports to introduce a number of important changes to ways CPs will be rated and evaluated by the KFTC (“Proposed Amendment”) based on the feedback it received since the program’s initial launch. The public commenting period for the Proposed Amendment continues until March 31, 2025. The Proposed Amendment includes, among others, (i) raising the baseline for each CP rating, (ii) changes to how fair trade law violations affect companies’ CP ratings, and (iii) allowing the CP rating process to move forward (subject to possible downgrading) notwithstanding the pendency of formal inquiries against the relevant companies. We summarize below the key details of the Proposed Amendment for your further reference. 1. Fair Trade Law Violation to Result in Point Deductions Instead of Lower Ratings (Article 14) Previously, if a company seeking CP evaluation received administrative fines or penalties for violating fair trade laws or obstructing the KFTC’s investigation, its rating would have been automatically downgraded by up to two ranks. Under the Proposed Amendment, the KFTC would deduct points (three evaluation points) instead of directly downgrading the rating in such circumstances (i.e., administrative fine; administrative penalty for refusal, obstruction, or evasion of the KFTC’s investigation; and criminal referral). Also companies seeking CP evaluation for the first time will be exempted from point deductions even if they have been found to have committed fair trade law violations. 2. Increased Procedural Flexibility in Case of Fair Trade Law Violation by Companies Seeking CP Evaluation (Articles 9, 15, and 18) Previously, the Guidelines gave the KFTC the option to withhold a CP rating or reject a CP rating in case the relevant company was subject to a formal investigation by the KFTC for a potential fair trade law violation that was deemed serious enough to undermine the integrity of the CP regime. The Proposed Amendment gives the KFTC the option to continue the CP evaluation process as well as the option to lower the CP rating in such circumstances, instead of withholding or rejecting the rating altogether. 3. Higher Baseline for CP Rating (Article 13) To improve the effective operation of the CP ratings evaluation, the Proposed Amendment purports to raise the baseline for the “excellent” ratings (A, AA) to 80 points for A (previously 70) and 85 points for AA (previously 80), with the point gap between the ratings narrowing from ten to five points. As a result, the baseline required to be eligible for CP incentives has increased from 70 to 80 points. 4. New Evaluation Criteria and Procedures (Article 14) To minimize the number of on-site evaluations which are burdensome to companies, the Proposed Amendment aims to introduce a three-step evaluation process as follows. After the first step (document review; includes the granting of extra points) and the second step (face-to-face evaluation), the KFTC will only proceed with the third step (on-site evaluation) if (i) the KFTC finds it necessary to conduct an on-site verification based on the first and seconds steps or (ii) the KFTC expects to reduce the amount of an administrative fine on the relevant company (rated AA or higher). 5. Criteria for Granting Extra Points (Attached Table 2.5) The Proposed Amendment introduces a maximum of 1.5 extra points for companies that received outstanding results from the KFTC’s evaluation of the performance of their obligations under subcontracting, distribution, agency, and franchise agreements. The Proposed Amendment also grants extra points for the operation of a self-regulated dispute mediation organization (specifically, the organization’s dispute intake process and its dispute settlement performance). Since its introduction in 2024, the CP has become an integral part of the KFTC’s key policy initiatives. Undoubtedly, voluntary compliance with fair trade regulations is increasingly an essential element of sustainable corporate growth, particularly given the growing social demands for corporate transparency and fairness. In this context, we encourage companies to take proactive steps to establish internal controls, reinforce efforts to comply with fair trade laws, and regularly review and monitor CP-related issues. [Korean Version]
2025.03.14

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The Korea Communications Commission Issues the Guidelines on the Protection of Users of Generative AI Services On February 28, 2025, the Korea Communications Commission (“KCC”) published the “Guidelines on the Protection of Users of Generative AI Services” (the “Guidelines”), aimed at mitigating risks of user harm associated with generative AI services. The Guidelines will take effect on March 28, 2025. 1. Background and Purpose The KCC has been actively working on various AI user protection initiatives as part of its 2024 and 2025 annual work plans, including efforts to enact the (tentatively titled) “Act on the Protection of Users of AI Services.”[1] In 2024, the KCC established the “Public-Private Council for the Protection of Users of AI Services” and launched the “Damage Reporting Channel for AI Service Users,” allowing users to report AI-related harm or complaints. In line with the above, the Guidelines signal the KCC’s ongoing efforts to continue working toward legal and institutional measures to promote user-centric AI services while ensuring their safety and reliability. According to the KCC’s press release, the Guidelines are designed to protect users from potential risks of generative AI, such as defamation, discrimination, and bias. 2. Summary of the Guidelines Though not legally binding, the Guidelines set forth four basic principles and six implementation methods that generative AI developers and service providers should aim to adopt to protect users’ rights and interests and mitigate potential risks of generative AI. In addition, the Guidelines provide best practice examples from existing services. Four Basic Principles (1) Generative AI services should respect human dignity, ensure individual freedom and human rights, and allow for appropriate human oversight and control. (2) Generative AI services should provide clear, easily understandable explanations regarding their operational principles, AI generated outputs, and their impact on users. (3) Generative AI services should operate safely, minimize unexpected damage, and prevent malicious use or alterations. (4) Generative AI services should be operated in a manner that prevents discriminatory, unfair, or biased outputs. Six Implementation Methods Implementation Methods Key Methods and Implementation Examples Protect users’ personal rights Create algorithms to detect and control elements that may infringe on personal rights Acknowledge responsibility for managing outputs Establish internal monitoring system and user reporting procedures Implementation examples: Display warning messages or temporarily block users attempting to input prompts that infringe on others’ rights Disclose decision-making processes Indicate that outputs are AI-generated Provide information on the process used to generate outputs Implementation examples: Provide information to help users understand the AI system’s decision-making process by indicating its source or providing links to relevant sources Make efforts to respect diversity Establish filtering functions to prevent discriminatory or biased use Establish reporting mechanisms for biased content Implementation examples: Provide users with a prominently placed reporting channel within the service and create damage report forms Manage the data collection and utilization process Establish procedures for obtaining prior consent to the collection and use of user input data for training Appoint designated personnel to oversee the collection and utilization of user data Implementation examples: When obtaining consent for the collection and use of personal information during sign-up or service use, provide an option for users to allow or decline the use of their generated content for training Take responsibility for and participate in addressing issues Define the respective responsibilities of service providers and users Establish a risk management system, such as monitoring system Implementation examples: Clearly outline potential user liabilities for misuse/abuse in the terms of use or terms of service Make efforts to ensure ethical content distribution and moderation Inform users that they should not generate or share inappropriate output Review and manage user inputs and outputs to ensure compliance with moral and ethical standards Implementation examples: Implement input/output filters to prevent harmful content generation and provide guidance to users when there is a risk of inappropriate content generation, such as lewd photos 3. Future Outlook and Next Steps The KCC plans to review the Guidelines every two years from March 28, 2025, and amend them as necessary. As such, the implementation methods and examples outlined in the Guidelines may be updated or supplemented over time. The four basic principles and six implementation methods outlined in the Guidelines can serve as reference points when applying and enforcing existing user protection laws and regulations, such as the Telecommunications Business Act and the Network Act. Moreover, they may inform the development of new laws and regulations, such as the (tentatively titled) “Act on the Protection of Users of AI Services.” Notably, the principle of providing clear explanations to users is similar to Article 3(2) of the AI Basic Act.[2] Among the implementation methods, (i) notifying users that outputs are AI-generated and (ii) the prior consent procedures for the collection and use of input data for training resemble Article 31 of the AI Basic Act and relevant provisions of the Personal Information Protection Act. Therefore, the interpretation and implementation of these overlapping regulations and the Guidelines will likely remain an area of ongoing discussion. Furthermore, in early 2025, the Ministry of Science and ICT launched the “Subordinate Legislation Task Force” to draft the Enforcement Decree of the AI Basic Act and related guidelines. The forthcoming Enforcement Decree and related guidelines are expected to further clarify the rights and obligations of businesses developing or deploying generative AI. Given this evolving regulatory landscape, generative AI developers and service providers should closely monitor developments and assess the relationship and alignment between the AI Basic Act, its subordinate laws and regulations, and the Guidelines. [1] This legislative effort is distinct from the “Act on the Development of Artificial Intelligence and Establishment of Trust” (the “AI Basic Act”) that was enacted on January 21, 2025. [2] Article 3(2) of the AI Basic Act stipulates that “[t]he [users of AI services] shall be provided with an explanation, which is clear and meaningful to the extent technically and reasonably possible, of the key criteria and principle, etc., used by AI to derive the final outputs.” [Korean Version]
2025.03.07

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Ranked “Band 1” in All Nine Areas, 41 “Leading Individuals” Recognized

In the 2025 edition of Chambers Global, Kim & Chang was once again the only Korean law firm ranked “Band 1” in all nine practice areas that were surveyed for Korea. In the individual categories, 41 of our attorneys and patent attorneys were recognized as “Leading Individuals.”
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“Tier 1” in All 17 Practice Areas

In the 2025 edition of The Legal 500 Asia Pacific, Kim & Chang was the only Korean law firm to be recognized as “Tier 1” in all 17 areas surveyed for Korea. Moreover, 57 of our attorneys, patent attorneys, and tax attorneys/CPAs were recognized in the individual categories.
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Ranked “Band 1” in 18 Areas, 90 “Leading Individuals”

Kim & Chang obtained a “Band 1” ranking in 18 practice areas in the 2025 edition of Chambers Asia-Pacific, once again receiving the most “Band 1” rankings among Korean law firms.
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