Revisions of Korean Labor Law in 2018

2018 년 노동법 변경 (최저임금, 연차휴가, 출퇴근 재해,

육아휴직급여 인상)

I. Minimum Wage and the Employer’s Obligations

1. Minimum wage for year 2018 : The minimum wage, to be applied

in 2018, is KRW 7,530 per hour, which is equivalent to KRW
1,573,770 for a 40-hour week. This is an increase of 16.4% over the
previous year, which is twice the average increase rate in the
minimum wage.

2. Effective period : 2018.1.1 ~ 2018.12.31.

3. Application : The minimum wage shall apply to all businesses or

workplaces.

4. Wages excluded from minimum wage rules are as follows (Table

1 of the Act):

(1) Wages, other than those paid regularly once or more every month

(2) Wages, other than those paid for contractual working hours or
contractual working days
① Annual or monthly paid allowances, work allowance on paid
leave, work allowance on paid holidays; ② Wages and additional
allowances for extended work or holiday work;

③ Additional allowances for night work; ④ Day & night-duty

allowances; and ⑤ Wages not admitted to be paid for a contractual
working day, regardless of how such payments are termed.

(3) Other wages deemed inappropriate to be included in the minimum

wage:

Allowances paid to assist employees such as family allowances, meal

allowances, housing allowances, transportation allowances, etc., or
actual or similar expenses to support employee welfare such as meals,
dormitory accommodation or other housing, company shuttle buses,
etc.

5. Employer Obligations

(1) Obligation to give notice : In case of violation, Imprisonment of

up to three years or a fine not exceeding 20 million won (Article 11
and 31 of the Minimum Wage Act)

When the minimum wage is announced, the employer shall inform

employees of 1) The minimum wage rate, 2) Scope of wages
excluded from application of minimum wage, and 3) Effective date.
This notice must be posted in places where it can easily be seen by
employees, or through other appropriate methods.
(2) Obligation to pay minimum wage : Fine not exceeding one million
won (Article 6 and 28 of the Minimum Wage Act)

II. Annual Paid Leave

1. Deletion of annual leave deductions for those who have worked

for less than one year (Deleted Article 60 (3) of the current Labor
Standards Act)

Employees are guaranteed 15 days of annual paid leaves or more as

stipulated by the Labor Standards Act. However, it is regulated
differently for those who have worked for less than one year. Under
the current law, they are granted one paid leave day for each month
during which s/he has continuously worked(Article 60(2) of LSA),
but the used leaves during the first year are deducted from the next
year's number of annual leave(15 days). Therefore, in case of new
employees, only 15 days of annual leave are provided for two years,
which leads to a problem that it threatens employees’ right to rest
sufficiently.

In response to this criticism, the National Assembly has passed a bill

regarding the revision of paid annual leave on November 9th.
According to the amendment, even if employees who have worked for
less than one year use annual leave, their leaves used will not be
deducted from the number of annual leave days(15 days) in the
following year (Deletion of the current Article 60(3) of LSA).
Therefore, new employees can use annual leaves up to 11 days for the
first year and 15 days for the following year making 26 days for two
years in all. This amendment shall take effect six months after the
date of its promulgation by the Ministry of Government Legislation.

For example, if an employee who joined a company on January 1,

2016 used 7 days of annual leave in the first year, how many days of
paid leave would be available for him/her in 2017?

In the current LSA, it is stipulated that the used leave days during the
first year are deducted from the 15 days of annul leave that are
granted only when the employee continues to work for one year.
Therefore, the employee can use 8 days of paid leave in 2017,
deducting 7 days from the 15 days of annual leave, which occurs on
January 1, 2017.

On the other hand, according to the amendment, the employee will be

paid up to 11 days during the first year and those days are not
deducted from the annual leaves given in the following year. Thus,
the employee can use 15 days, which occurs on January 1, 2017.

2. A period of childcare leave shall be considered as a period of

attendance

(The Article 60(6)3 of LSA is newly established)

In addition, this amendment also introduces a measure to ensure the

annual leave of employees who come back to work after childcare
leave. According to the current law, when calculating the number of
annual leave days, while maternity leave is regarded as a period of
attendance, the period of childcare leave is excluded and calculated as
a proportion of the whole period. For this reason, there were cases
where employees have not been able to receive a single day of annual
paid leave in the following year after returning from childcare leave.

However, in the future, a period of childcare leave shall be considered

as a period of attendance when calculating the number of annual leave
days to encourage the balance of work and family and the use of
childcare leave. Applicants who apply to the childcare leave will be
applied to this amendment after it is enacted.

The amendment is encouraging, given the legislative purpose[1] of

annual leave is to provide workers with adequate mental and physical
recreation to encourage the reproduction of labor and enable workers
to balance work and family.

III. Extension of Scope of Industrial accident for an Accident

while Commuting to and from Work (Revision of Industrial
Accident compensation Insurance Act)

[Before]

ONLY an accident which happens while the worker is commuting to

and from work under the control of the employer, such as using
transportation provided by the employer or the equivalent thereof
could be recognized as work-related accident.
[After]

Legal definition of “Commuting to and from work” was prepared.

According to the revised law, “Commuting to and from work” means
move between residence and workplace or from work place to another
work place in connection with work(Article 5 8.).

Even though it is not the accident which happens while the worker is
commuting to and from work under the control of the employer, such
as using transportation provided by the employer or the equivalent
thereof, if it happens while commuting in an ordinary course and
methods, such accident is industrial accident(Article 37 (1) 3.).

However, the accident which happens while deviating from or

stopping in ordinary course or the accident which happens thereafter
shall not be recognized as industrial accident. However, if such
deviation and stop fall under any reason stated in Presidential Decree
as necessary act for everyday life, it shall be deemed as industrial
accident (Article 37 (3)). Further, if it falls under any occupation,
which commuting course and method are not consistent, stated in
Presidential Decree, it shall not be recognized as industrial accident
(Article 37 (4)).

[Enforcement date]
The revised law shall be enforced as of January 1, 2018, and it shall
be applied from the first time accident while commuting after the
enforcement date.

IV. Increase in Amount of Child-care Leave Benefits, etc.

(Revision of Presidential Decree of Employment Insurance Act)

[Before]

During child-care leave, 40/100 ordinary wage of child-care leave

benefits were given (Maximum: monthly 1m KRW, Minimum:
monthly 0.5m KRW).

Further, 75/100 of child-care leave benefits during the child-care

leave and 25/100 of child-care leave benefits were paid in the case a
worker returns to the workplace concerned after the child-care leave
ends and continues to be employed for (6) six months or more. Due to
this, fixed-term workers whose employment period finishes during
child-care leave or within 6 months after child-care leave couldn’t
receive the remaining child-care leave benefits.

[After]

<1> Increase in Amount of Child-care Leave Benefits

For the first (3) three months of child-care leave, the child-care leave
benefits has been increased to 80/100 ordinary wage (Maximum:
monthly 1.5m KRW, Minimum: monthly 0.7m KRW).

<2> Extension of Child-care Leave Benefits for Fixed-term

workers

In case where the employment period of the fixed-term worker

expires so that child-care leave ends or the fixed-term employee
finishes to work until expiration of employment term after return to
the workplace, even thought he/she didn’t work for (6) six months
after return to work, 25/100 of remaining child-care leave benefits are
given in lump-sum (Article 95 (4)).

[Enforcement date]

Revised Article 95(4) shall be enforced as of June 28 2017 and it shall

be applied from the fixed-term worker whose employment period
expires after the enforcement date.

Revised Article 95(1) shall be enforced as of September 1, 2017 and

child-care leave benefits for the period of child-care leave before the
enforcement date shall be subject to the previous Article.

V. Enhancement of Employer’s Responsibilities and Protective

Measures for Victims regarding Sexual Harassment at Work and
Leave for Subfertility
(Act on Equal Employment and Support for Worker-Family
Reconciliation)

[Before]

It has been social issues with regards to sexual harassment and sexual
violence at work in some companies, and cases of sexual harassment
are on the rise. Therefore, there have been social demands for
enhancement of employer’s responsibilities and protective measures
for victims for it.

Meanwhile, although the number of people treated for subfertility has

been increasing, many of them have had to use their personal annual
paid leave for treatment of subfertility.

[After]

<1> Enhancement of employer’s responsibilities and protective

measures for victims regarding sexual harassment at work

ㅇ Anyone can report sexual harassment at work to an

employer(Article 14 (1)),

ㅇ Employer’s obligation to investigate facts, countermeasures such

as change of workplace, reassignment, granting paid leave for victims
or etc. have been newly established (Article 14 (2), (3), (4) and (5),
when violated, 5m KRW or less of penalty is imposed), and when
occurrence of sexual harassment is confirmed, the employer shall take
counter measures such as disciplinary action or change of workplace
of a person who has committed sexual harassment after hearing
victim’s opinion. (Article 14 (5), when violated, 5m KRW or less of
penalty is imposed). Further, confidential obtained during
investigation of sexual harassment shall not be divulged to anyone
(Article 14 (7), when violated, 5m KRW or less of penalty is
imposed).

ㅇ It shall be prohibited from taking disadvantages treatment such as

dismissal, discrimination, bullying toward victims (Article 14 (6),
when violated, the amount of penalty was increased from 20m KRW
to 30m KRW).

ㅇ When sexual harassment happens by customers, the employer also

shall rearrange a position or give paid leave for victims (When
violated, 3m or less KRW of penalty is imposed.)

ㅇ Sexual harassment prevention education shall be conducted every

year and such contents shall be posted (Article 13, (3) when violated,
5m KRW or less of penalty is imposed).

<2> Establishment of annual 3 days’ leave for subfertility

ㅇ Annual 3 days’ leave (first 1 day is paid and the rest 2 days are not
paid) for subfertility has been newly established. However, the leave
period concerned may be changed through consultation with the
concerned worker, in case granting the leave as requested by the
worker might cause a serious impediment to the cooperation of the
business and no employer shall dismiss or take any other
disadvantageous measures against a worker for using subfertility
leave (Article 18-3).

[Enforcement date]

It shall be enforced after six (6) months from the date of promulgation
(It is expected to be enforced during May in 2018).

[1] Supreme Court ruling on June 11, 1966, 95Nu6649