SOUTH KOREA Trends and Developments Contributed by: Sang Hoon Lee and William Kim, Lee & Ko
Lee & Ko Hanjin Building 63 Namdaemun-ro Jung-gu
Seoul 04532 South Korea
Tel: +82 2 772 5944 Fax: +82 2 772 4001 Email: William.kim@leeko.com Web: www.leeko.com
Employment Law Trends in Korea: The Yellow Envelope Law and Its Implications for Businesses As South Korea continues to solidify its posi - tion as a global economic hub, its employment law landscape is undergoing a significant trans - formation. One of the most significant develop - ments is the proposed amendments to Articles 2 and 3 of the Trade Union and Labour Relations Adjustment Act (TULRAA), commonly referred to as the “Yellow Envelope Law.” These amend - ments, which have gained renewed attention given the current administration’s prioritisation of labour policy, promise to reshape labour relations in Korea. For businesses operating in or entering the Korean market, understand - ing these changes is crucial for navigating the evolving legal and operational landscape. This article examines the key features of the Yellow Envelope Law and its potential implications for employers. Expansion of “employee” and ”employer” definitions The Yellow Envelope Law proposes significant revisions to the definitions of “employee” and ”employer” under the TULRAA, potentially
broadening the scope of labour protections and obligations. Redefining “employee” The current TULRAA defines an “employee” as someone who earns wages or equivalent income, regardless of occupation. The proposed amendment redefines an ”employee” as “a per - son who provides labour for remuneration in a business or workplace,” introducing a rebuttable presumption that individuals providing labour for another’s business are employees. To rebut this presumption, employers must prove that: • the individual is not subject to their direction and supervision; • the work falls outside the employer’s ordinary business scope; and • the individual operates independently under their own name and account in the same field. If enacted, this change could extend labour protections, including the right to engage in industrial action and/or collective bargaining, to previously excluded groups, such as independ - ent contractors and self-employed individuals. Businesses should proactively document work
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