1. Concept of Employee

(1) Concept
Article 2 (1) of the Labor Standards Act stipulates that the term worker in this Act refers to a person who offers work to a business or workplace to earn wages, regardless of the kind(s) of job he/she is engaged in. The concept of employee includes the following factors: 1) it is not determined by the kind(s) of job he/she is engaged in; 2) the person works at a business or workplace; 3) the person offers work to earn wages. In understanding this concept, wages is put at the center, while the key point to be considered is whether a subordinate relationship exists between the work provider and the work user.¹⁵⁾

(2) Scholarly views
1) Interpretational
This view claims that the current judicial ruling regarding the criteria for determination of employee status has some difficulty in understanding because its criteria are enumerated with factual evidence in parallel order. To overcome this problem, the criteria can be categorized into substantial signs and formal signs from which employee status can be determined as existing or not.¹⁶⁾
Such substantial signs include whether there is command and control, the relationship between the work offered and the current business, and the work provider's situation. The formal signs refer to items whose existence depends on the employer's decisions, which include whether income tax and social security insurance premiums are paid, whether personnel evaluations for the person are performed, and whether the person has a contractual duty to receive permission before getting a second job.¹⁷⁾
That is, this view holds that employee status can be determined through the substantial signs, and formal signs can be excluded from the factors that determine a subordinate relationship.
2) Law-based¹⁸⁾
This view holds that the concept of 'employee' should be interpreted in accordance with the related legal provisions. Korean labor law has the definition of employee in Article 2(1) of the Labor Standards Act (the LSA), and any judgment of employee status should begin with the interpretation of this provision. The LSA definition of 'employee' contains four determining factors: ① the status can be determined regardless of the kind of job; ② the person offers work to earn wages; ③ the person offers work at a business or workplace; and ④ the person offers work. Of these four factors, status can be determined regardless of the kind of job is not directly related to establishing employee status, and so will not be included for consideration.

(3) Judicial ruling
The Supreme Court gave clear criteria for determination of employee status in a lawsuit case involving a full-time instructor at a private institute: first, employee status may exist regardless of the type of contract; second, the criteria for determination of a subordinate relationship are enumerated to 12 items; third, the conditions suggested as signs of employee status shall be determined as decisive or not by considering whether the employer can unilaterally decide whether those conditions exist. These criteria are used to determine employee status, and they are stipulated in the following paragraph.
The Supreme Court¹⁹⁾ ruled that whether a person is considered an employee under the Labor Standards Act shall be determined by whether, in actual practice, that person offers work to the employer as a subordinate of the employer in a business or workplace to earn wages, regardless of the contract type such as an employment contract or a service contract. Whether or not a subordinate relationship with the employer exists shall be determined by collectively considering: ① whether the rules of employment or other service regulations apply to a person; ② whether that person's duties are decided by the employer, ③ whether the person has been significantly supervised or directed during his/her work performance by the employer; ④ whether his/her working hours and workplaces were designated and restricted by the employer; ⑤ who owns the equipment, raw materials or working tools; ⑥ whether the person can be substituted by a third party hired by the person; ⑦ whether the person's service is directly related to business profit or loss as is the case in one's own business; ⑧ whether payment is remuneration for work performed or ⑨ whether a basic or fixed wage is determined in advance; ⑩ whether income tax is deducted for withholding purposes; ⑪ whether work provision is continuous and exclusive to the employer; ⑫ whether the person is registered as an employee by the Social Security Insurance Act or other laws, and the economic and social conditions of both sides. Provided, that as whether basic wage or fixed wage is determined, whether income tax is deducted for withholding, and whether the person is registered for social security insurances could be determined at the employer's discretion by taking advantage of his/her superior position, the characteristics of employee cannot be denied because of the absence of these mentioned items.
The above criteria are not applied formally or uniformly, but in the event facts equivalent to the above items exist, it should be determined after reviewing whether these facts were decided by the employer's superior position or required naturally by such job characteristics.²⁰⁾

(4) Labor Ministry Guideline: Criteria for Determining "Employee" Status²¹⁾
Whether a person is considered an employee under the LSA shall be decided by whether that person offers work to the employer as a subordinate of the employer in a business or workplace to earn wages in actual practice, regardless of whether the type of contract is an employment contract or service agreement under Civil Law.²²⁾
The Ministry of Labor determines whether the contractor has employee or freelancer status when considering collectively the seven items suggested below by the aforementioned Supreme Court ruling.
1) Whether the Rules of Employment or service regulations apply to a person whose duties are decided by the employer, and whether the person has been supervised or directed during his/her work performance specifically and individually by the employer: Supervision and direction mean that the person implements the work that the employer wants him/her to do under the employer's direction and command. There are various criteria for determining under the direction and supervision of the employer, but this shall be determined by considering the following criteria collectively. ① Whether such things as employment, training, retirement, etc. apply to said person; ② Whether said person can decide what work he/she will do, or whether said person has freedom to obey or reject work instructions.
2) Whether his/her working hours, working days and workplaces are designated and restricted by the employer:
① Whether his/her working hours or working days are designated: falls under Restrictions in working hours; ② Whether his/her workplaces are designated or the times determined when said person shall provide labor service in the directed workplaces: falls under Restrictions in workplaces.
3) Whether a third party hired by said person can be a substitute for him/her: The inability to substitute someone for oneself to do the labor service is not a basic criterion in determining whether a subordinate relationship exists or not, but when a substitute is possible, this becomes a significant indicator that a relationship of direction and supervision may not exist.
4) Whether said person owns the equipment, raw material, or working tools he/she uses: If the machine or tools owned by the work performer are very expensive, and if the person shall be responsible for his/her own workplace injuries, he/she is closer to being a business owner who judges and takes on risk at