President Yoon has identified labor reform as a key priority and has pursued increasing union financial transparency requirements and easing the 52-hour workweek cap implemented by the previous Moon Jae-in administration. In December 2022, President Yoon issued the ROK’s first ever executive back-to-work order for striking truckers, citing economic and supply chain disruptions.
According to Statistics Korea ( http://kostat.go.kr/portal/eng/index.action ), there were approximately 28 million economically active people in the ROK as of January 2024, with an employment rate (OECD standard) of 68.7 percent. The overall unemployment rate of 3.7 percent in January 2024 is much less than the 6 percent unemployment rate of youth aged 15-29. The ROK’s female labor force participation rate was 54.7 percent in January 2024. According to the OECD, Korea’s gender wage gap in 2022 stood at 31.2 percent, sharply above the OECD average of 12.1 percent. The country has two major national labor federations. As of 2024, the Federation of Korean Trade Unions (FKTU) had about 1.5 million members, and the Korean Confederation of Trade Unions (KCTU) had 1.2 million members. FKTU and KCTU are affiliated with the International Trade Union Confederation.
The minimum wage is reviewed annually. Labor and business set the minimum wage for 2024 at KRW 9,860 (approximately USD 7.5 per hour), a 2.5 percent increase from 2023. According to Statistics Korea, non-regular workers received approximately 55 percent of the wages of regular workers in 2023. Non-regular workers on contracts stipulating monthly pay received KRW 1.96 million per month (about USD 1,495) while regular workers paid monthly received KRW 3.62 million (about USD 2,760).
For regular, full-time employees, the law provides for employment insurance, national medical insurance, industrial accident compensation insurance, and participation in the national pension system through employers or employer subsidies. Non-regular workers, such as temporary and contracted employees, are not guaranteed the same benefits. Regarding severance pay for regular workers, ROK law does not distinguish between firing versus laying off an employee for economic reasons. Employers’ reliance on non-regular workers is partially explained by cost savings associated with dismissing regular full-time employees and re-hiring non-regular workers. In 2004, the ROK implemented a “guest worker” program known as the Employment Permit System (EPS) to help protect the rights of foreign workers. The EPS allows employers to legally employ a certain number of foreign workers from 16 countries, including the
Philippines, Indonesia, and Vietnam, with which the ROK maintains bilateral labor agreements.
In 2023, the ROK’s annual quota almost doubled from the previous year to 120,000. For 2024, the quota was further expanded to 165,000 by broadening the EPS sectors and allowing foreign workers to stay in the ROK for longer periods.
Legally, unions operate autonomously from the government and employers, although national labor federations comprised of various industry-specific unions receive annual government subsidies. The ratio of organized labor to the entire population of wage earners in 2022 was 13.1 percent. ROK trade union participation is lower than the latest-available OECD average of 17 percent. More information is available at http://stats.oecd.org/ . Labor organizations are free to organize in export processing zones (EPZs), but foreign companies operating in EPZs are exempt from some labor regulations. Exemptions include provisions that mandate paid leave, require companies with more than 50 employees to recruit persons with disabilities for at least two percent of their workforce, and restrict large companies from participating in certain business categories. Foreign companies operating in Free Economic Zones have greater flexibility to employ “non-regular” workers in a wider range of sectors for extended contractual periods. ROK law affords workers the right of free association and allows public servants and private workers to organize unions. The Trade Union and Labor Relations Adjustment Act provides for the right to collective bargaining and action and allows workers to exercise these rights in practice. In 2021 during a period of COVID-19 social distancing restrictions which included caps on the size of public gatherings, some labor leaders were arrested when demonstrations exceeded those limits.
The National Labor Relations Commission is the primary government body responsible for labor dispute resolution. It offers arbitration and mediation services in response to dispute resolution requests submitted by employees, employers, or both parties together. Labor inspectors from the Ministry of Employment and Labor also have certain legal authorities to participate in labor dispute settlement. The Korea Workers’ Compensation and Welfare Service handles labor disputes resulting from industrial accidents or disasters. The Act on the Protection of Fixed-Term and Part-Time Workers prohibits discrimination against non-regular workers and requires firms to convert non-regular workers employed longer than two years to permanent status. The two-year rule went into effect for all businesses on July 1, 2009. Both the labor and business sectors have complained that the two-year conversion law forced many businesses to limit the contract terms of non-regular workers to two years and incur additional costs with the entry of new contract employees every two years. More information can be found in the Department of State’s Report on Human Rights Practices for 2023: https://www.state.gov/reports/2023-country-reports-on-human-rights-practices/south-korea
On January 26, 2021, the Serious Accidents Punishment Act (SAPA) was enacted. The Act holds CEOs personally accountable for workplace accidents and occupational illnesses. It also expands the scope of obligations for worker protections and strengthens penalties for violations. In the first conviction and sentencing under SAPA, a construction company CEO was given a suspended 1.5-year prison sentence in April 2023.
