South Korea

Screenshot 2020-03-04 at 3.09.28 PMBy Weon-Jae Yang, Dentons Lee


In accordance with an amendment of the Labor Standards Act, companies having fewer than 300 employees will now be required to comply with the mandatory 52-hour workweek regulation, which previously applied only to companies with more than 300 employees. For the largest companies, the rule became effective on July 1, 2018. For smaller businesses with 50-299 employees, the rule just became effective on January 1, 2020. For businesses with 5-49 employees, it will become effective on July 1, 2021.

The 52-hour workweek system under the Labor Standards Act will be applied to all types of business in Korea, except for a few special types of businesses that have been excluded under Article 59(1) of the Act (land transportation and pipeline transportation services; waterborne transportation services; airborne transportation services; other transportation-related services; and health care services). Thus, unless it is amended, the rule is expected gradually to cover almost every small and medium-sized business and venture business in Korea.

Foreign investors who have already entered or are considering entering the Korean market should be aware of this change and should plan to address the new workweek regulation, even if the number of persons they employ is less than 300.

Screenshot 2020-03-04 at 3.09.15 PM

The Korean government did announce a partial amendment to the Enforcement Rules of the Labor Standards Act on December 13, 2019, which expanded the ability of businesses to request temporary relief from the 52-hour workweek limit to allow employees to work more hours in a week under certain circumstances. Those circumstances include situations (i) where it is needed for protecting human life and ensuring security; (ii) when any emergency measure is required for an unexpected situation such as a failure or a breakdown of facilities/equipment; (iii) where there is any unusual and large-scale increase in workload and the failure to handle such work in a short period of time could result in material difficulties or losses to the business; or (iv) any R&D activities recognised by the Minister of Employment and Labor as being needed to boost national competitiveness and promote the state economy. But this amendment has led to a continuing backlash from Korea’s labour world. For example, on January 14, 2020, the Federation of Korean Trade Unions, one of the two largest confederations of trade unions in Korea, submitted a statement to the Ministry of Employment and Labor and the Ministry of Government Legislation, objecting to that amendment, saying it is a measure that goes completely against the purpose of the current Labor Standards Act and the existing authoritative interpretation of the Act made by the government.

Although the Korean government has announced that it will implement a de facto postponement on enforcement of the 52-hour workweek regulation by giving a one-year grace period, companies should be aware that granting of such a grace period will not necessarily mean a deferment or waiver of the criminal punishment that is stipulated in the law in the case of any violation. An employer who violates this law may be subject to imprisonment for up to two years or a fine of up to W20 million (US$17,000) in accordance with Article 110 of the Labor Standards Act.

There is still some uncertainty as to whether the amended law will remain intact or undergo additional revisions in the National Assembly. Nonetheless, given the effective dates of the current amendment to the Act, companies should adapt their operations to comply with the applicable amended workweek requirements unless and until further amendments occur.



Screenshot 2020-03-04 at 3.13.38 PM



T: (82) 2 2262 6043

F: (82) 2 2279 5020

Related Articles by Firm
Foreign Banks Allowed to Operate in Myanmar
After more than 50 years of banning, the Central Bank of Myanmar has issued the first final licenses allowing four foreign banks to operate in Myanmar.
Tanzanian Draft National Energy Policy of 2015
Highlights on the ongoing and upcoming industry developments with focus on the transition of the energy sector since the introduction of the Big Results Now! campaign
Mineral Rights Available in Tanzania
Overview of the mineral rights available in Tanzania, with specific focus on the various categories of mineral rights
The Legal Framework of the Aviation Sector in Tanzania
As attention turns to Tanzania’s trade and energy opportunities, the spotlight has fallen upon the nation’s infrastructure. This update focuses on the capabilities and issues of the Tanzanian aviation sector.
Oil price volatility - Offshore oil storage
Are there any legal concerns with tankers being used for floating storage?
Oil price volatility - risks and opportunities in 2015
While many companies can weather the oil price slide and volatility, some industry players face a real risk of insolvency.
India: Union Budget 2015
A bullet-point overview of changes in Direct Tax, Indirect Tax and Goods and Service Tax in India in light of Finance Minister Arun Jaitley’s first full-year Budget…
Prohibition against transfer of personal data outside Hong Kong
Section 33 of the Personal Data (Privacy) Ordinance (PDPO) prohibits the transfer of personal data to places outside Hong Kong, except in circumstances specified in the PDPO.
Security of payment under FIDIC contracts: more secure, for now
The High Court of Singapore recently handed down an important judgment in relation to the enforceability of Dispute Adjudication Board (DAB) decisions under the FIDIC forms of contract.
Insurance Laws (Amendment) Bill passed as Ordinance in India
The long-awaited Insurance Laws (Amendment) Bill has become a provisional law in India. The Bill amends the Insurance Act (1938), the General Insurance Business (Naturalisation) Act (1972), and the Insurance Regulatory and Development Act (1999).
SICC: now open for business
On Monday 5 January 2015, the Singapore International Commercial Court ("SICC") was officially opened...
Myanmar insurance update
Clyde & Co partner Michael Horn recently visited Myanmar's commercial capital Yangon and reports on the current state of the insurance market...
Launch of the online mining cadastre transactional portal
Plus, a summary of the key mineral rights available in Tanzania; and, a look at the manner in which mineral rights can be transferred.
Restrictions imposed on holders of mineral rights
This briefing looks at some of the restrictions imposed on holders of mineral rights in Tanzania by the Mining Act 2010
Draft local content policy for the oil & gas industry in Tanzania
The first draft of the long-awaited local content policy for the oil & gas industry in Tanzania has now been published by the Ministry of Energy and Minerals ...
Tanzania: Revocation of mining licences
The Tanzanian government recently announced the cancellation of a total of 174 mining licences. This mining update examines the key continuing obligations imposed by the Mining Act upon mining licence holders.
Mining Development Agreements
In this month’s mining briefing we look at Mining Development Agreements (MDAs) and the role that they play in the mining sector in Tanzania.
The Tanzanian railway system: current legal framework
The railway system of mainland Tanzania has a total track length of 3,676 kilometers (km) with two separate networks, run by two separate organisations ...
Related Articles
Are you ready for the global tax reform?
A brief discussion on how MNCs should respond to the OECD’s new measures relating to Automatic Exchange of Information and Transfer Pricing issues
Vietnam: Remarkable changes in the new Law on Enterprises
On June 17, 2020, the National Assembly officially passed a new Law on Enterprises to replace the current Law on Enterprises ...
Copyright and remote learning in the time of Covid-19
On August 15, 2020, Philippines’ President Rodrigo Duterte approved the recommendation of Department of Education Secretary Leonor Briones to defer the opening of classes from August 24, 2020 to October 5, 2020 in view of the Covid-19 pandemic ...
Related Articles by Jurisdiction
Notes to foreign financial investment corporations that are starting businesses in South Korea
As of September 2019, there were 47,799 foreign investors registered with the Korea Financial Supervisory Service, including 36,190 institutional investors ...
Yoon & Yang opens Ho Chi Minh City office
Yoon & Yang is opening an office in Vietnam, in the heart of Ho Chi Minh City’s central business district. ...
Franchising in Korea: areas for consideration
Over the past decade the number of franchises launched by domestic and foreign companies in Korea has increased significantly …
Latest Articles
Are you ready for the global tax reform?
A brief discussion on how MNCs should respond to the OECD’s new measures relating to Automatic Exchange of Information and Transfer Pricing issues
Sanctions and Investigations Q&A
Asian-mena Counsel sought wise counsel on the key issues in these risk-heavy areas from those with expertise at leading International law firm Baker McKenzie, and two thought-leading GC’s ...
Anti-corruption compliance in India
In recent years, there has been a paradigm shift in how corporate India addresses corruption, according to Manjula Chawla, Chandni Chawla and Ashna Gupta, of Phoenix Legal ...