Ⅲ. Short-Term Contract Employees

1. Concept

Those whose contract period is less than two years are referred to as short-term contract employees(hereinafter called short-term employees). Regardless of what they are called, or whether their contracts are like that of daily workers, contracted workers, temporary employees, commissioned employees, etc., short-term employee simply refers to an employee employed for less than two years. Though they may be termed short-term employees, the term excludes those who have repeated or renewed their contracts several times.

2. Labor contract

Most articles in the Labor Standards Act apply to short-term employees in principle. With respect to a business or workplace with 4 employees or fewer, only selected provisions of the Labor Standards Act such as wage, weekly holidays, recess hours, etc. are applied.

When hiring a short-term employee, a labor contract must be drafted and submitted that specifies the following items:
① Matters concerning each constituent item of wage, and the methods of calculation and payment;
② Matters concerning work start and finish times for the employee, recess hours, and holidays;
③ Matters concerning place of employment and work to be performed; and
④ Matters concerning other working conditions.

An employer shall also keep a register of workers with information including name, date of birth, personal history, etc., wage ledger concerning the payrolls paid, and other important documents concerning the labor contract for three years. With respect to a daily worker who has been employed for a period of less than thirty days, a register may not be needed.

3. Wage payment and calculation

For contracts exceeding one month, wages shall be paid at least once a month on a fixed day. For daily workers who are hired on a daily basis, wages shall be paid each day upon fulfilling the contractual working hours.
The wage of a daily worker is calculated by the hourly or daily wage rate in principle. The hourly wage is calculated into a daily wage by multiplying the number of contractual working hours of one day by the hourly wage rate.
Contractual working hours of one day for a construction worker or guard usually include extended or night work, so an additional allowance may be rendered in the inclusive wage of one day. In this case, the ordinary wage of one day can be gained through an inclusive inverse calculation.

For example, if the labor contract is drawn for 10 working hours a day and 100,000 won as a daily wage, then the ordinary wage of one day is 72,700 won:
● Hourly wage = 100,000 won [8 hours+(2 hours1.5)] = 9,090 won
● Ordinary wage of one day = 9,090 won(hourly wage) 8 hours(number of contractual working hours of one day) = 72,700 won

4. Working hours, holidays and leave

1) Working hours shall not exceed 40 per week and 8 per day excluding recess hours, but if the parties concerned agree, working hours may be extended up to 12 hours per week. Accordingly, construction workers can sign a contract for 10 working hours per day.
If a daily worker renews his/her daily contract for 5 consecutive days, one paid holiday shall be provided. However, if he/she is eligible to receive one paid holiday after 5 consecutive working days, but the contract terminates the day before expecting a paid holiday, the holiday shall not be paid. Thus, for daily workers in construction or manufacturing, holiday allowance is often omitted in a calculation of payment which multiplies the number of days to a daily wage rate. Accordingly, if a daily worker maintains full attendance for the corresponding week, the weekly holiday allowance shall be additionally paid for each weekly holiday.

2) A monthly paid leave shall be given to an employee with perfect attendance for the contractual working hours of the month, but the accumulated use of monthly paid leave is only available before the contract terminates. If the contract terminates on the day the monthly paid leave can be used, the leave shall not be granted.
If the short-term employee renews his/her contract for more than one year, annual paid leave shall be provided.

5. Accident compensation and dismissal

If a short-term employee suffers an occupational injury or disease, he/she is eligible for industrial accident compensation insurance in principle. Industrial accident compensation insurance does not cover workers who can be treated within 4 days for injury sustained during an industrial accident, but the rules concerning accident compensation in the Labor Standards Act are applicable instead. Even if the contract of a short-term employee expires during a period of temporary interruption of work for medical treatment of an occupational injury or disease, he/she can continue to receive medical attention and wages during business suspension until he/she recovers, or, alternatively, receive a lump sum compensation payment.
If there is a justifiable reason for dismissal, an employer can immediately dismiss the following employees without advance notice as stipulated in the Labor Standards Act(Article 26 of the LSA): ① Where the employee worked consecutively less than 3 months; ② Where it is impossible to continue business because of natural disaster, armed conflict, or other unavoidable causes; and ③ Where a worker has caused considerable difficulties to business, or damage to property on purpose. In the case of a short-term contract of less than one year, the labor contract terminates automatically when the contract period expires and does not require advance notice of dismissal.

6. Employment insurance

A short-term employee qualifies for employment insurance. However, employment insurance is not available to workers whose contractual working hours are fewer than 60 per month(15 per week) and to workers over 65 years of age.

7. Severance pay

If a daily-work contract is repeatedly extended for more than one year, severance pay shall be provided. If a short-term employee has a one-year labor contract, severance pay shall be provided upon termination of the contract period.