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Newsletter | April 2017, Issue 1
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LABOR & EMPLOYMENT
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Key 2017 Changes in Employment and Labor Law Favor Employees
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Below we highlight some key changes in Korean employment and labor law, which may be of relevance to your organization:
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| 1. |
Minimum retirement age of 60 is now applicable to all companies1
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On May 22, 2013, to better reflect the change in demographics (i.e., the aging workforce) and the social and economic circumstances in Korea, the “Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion” was amended to establish a minimum retirement age of 60.
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While this minimum retirement age previously applied only to companies with 300 or more employees, as of January 1, 2017, it applies to all companies in Korea.
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| 2. |
Smaller companies also required to maintain and (upon request,) return a job applicant's hiring documents2
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Under the Fair Hiring Procedure Act (which came into effect on January 1, 2015), a company is required to: (i) maintain an applicant's hiring documents for a certain period of time; and (ii) when a job applicant (who has been turned down) requests the return of his/her hiring documents, the company must return those documents. Failure to do so may result in the company being issued a corrective order by the Ministry of Employment and Labor ("MOEL") or an administrative fine of up to KRW 3 million.
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While the above requirement previously applied only to companies with 100 or more employees, as of January 1, 2017, it applies to companies with 30 or more employees.
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| 3. |
Maximum amount of maternity leave compensation increased3
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Under the Labor Standards Act, a pregnant employee is entitled to 90 days (or 120 days, in case of multiple births during the same pregnancy) of maternity leave before or after childbirth.
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Further, the pregnant employee will receive from the Employment Insurance Agency 90 days’ ordinary wage (or 120 days’ ordinary wage, in case of multiple births during the same pregnancy) if she works at a “priority company” (which means mid-size companies with certain employee headcounts), or 30 days’ worth of ordinary wage (or 45 days’ ordinary wage, in case of multiple births during the same pregnancy), if she does not work at a “priority company.”
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Until 2016, the maximum amount for maternity leave compensation was KRW 1,350,000. As of January 1, 2017, however, the maximum amount has been increased to KRW 1,500,000.
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To receive the maternity leave compensation, the employee must apply for compensation after 60 days (or after one month, if she works for a “priority company”) of maternity leave, but before 12 months have passed since the end of her maternity leave.
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| 4. |
Minimum wage increased4
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As of January 1, 2017, minimum wage has increased by 7.3% (by KRW 440) to KRW 6,470 per hour.
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| 1 |
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Article 19 of the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion
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| 2 |
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Article 11 and 12 of the Fair Hiring Procedure Act
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| 3 |
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Article 76(2) of the Employment Insurance Act and Article 101(1) of its Enforcement Decree, the MOEL Notice 2016-55
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| 4 |
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Article 10(1) of the Minimum Wage Act, MOEL Notice 2016-37
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Back to Main Page
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If you have any questions regarding this article, please contact below:
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For more information, please visit our website:
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