Foreign Employment and Visa

Chapter 3. MANAGEMENT OF LABOR AFFAIRS FROM FOREIGNER EMPLOYMENT TO RETIREMENT

Restrictions on Application of the Labor Standards Law

■ Employees of Workplaces with Less Than 5 Regular Employees and Domestic Helpers
There are some employees who, although they are considered workers, do not receive the full protection of the Labor Standards Act or are excluded from its application. The representative cases are employees working in workplaces with less than five regular employees and domestic helpers. The Labor Standards Act applies to all businesses or workplaces that employ more than five regular employees. However, it does not apply to businesses or workplaces that only use family members living together or to domestic helpers.
There are several problems related to the exclusion of the Labor Standards Act. First, employees working in workplaces with less than five regular employees do not have their basic labor rights guaranteed. However, with the recent application of severance pay provisions, disputes arise frequently as employees seek to protect their rights. Second, domestic helpers who work exclusively for certain households are excluded from the application of the Labor Standards Act because it is difficult for the government to monitor their working hours and wages. Domestic helpers refer to workers such as housekeepers, part-time workers, babysitters, gardeners, chauffeurs, and other employees who work in the household. However, there may be disputes over whether the Labor Standards Act applies when domestic helpers are employed by a company, receive wages from the company, and are dispatched to the owner's house to perform duties such as gardening, security, housekeeping, or driving. In particular, disputes arise over issues such as industrial accident compensation and severance pay when workers are injured during work.

■ Regulations not Applicable to Workplaces with Less Than 5 Permanent Employees
Employees working in workplaces with less than 5 permanent employees are not protected by labor standards due to the fact that the following regulations are not applicable to them, leaving them vulnerable to poor working conditions.

❍ Restriction on Termination
Employers can freely terminate or discipline employees without just cause in workplaces with less than 5 permanent employees. Even if employees are unfairly terminated, they cannot seek relief from the labor commission. Employers have no obligation to provide written notice of unilateral termination and restrictions on termination for management reasons do not apply, so employees can be terminated at any time when the company is not doing well. Temporary workers or short-term employees can be terminated at any time.

❍ Suspension Pay
Employees working in workplaces with less than 5 permanent employees cannot receive suspension pay when the company suspends operations. Therefore, even if the employer voluntarily suspends operations, they do not have to pay suspension pay, so employees will not receive wages during the suspension period, even if it is due to the employer's responsibility.

❍ Limitations on Working Hours
Workplaces with less than 5 permanent employees are not subject to the 40-hour workweek or 5-day workweek restrictions, and they can extend work beyond 8 hours per day without limit. There are no limitations on overtime work beyond the 12-hour weekly limit, and employees working overtime, at night (between 10 p.m. and 6 a.m.), or on holidays do not receive a 50% wage premium.

❍ Paid Annual Leave
While regular employees can use 15 days of paid annual leave per year, employees working in workplaces with less than 5 permanent employees do not accrue paid annual leave. Therefore, employees in such workplaces can use unpaid leave with the employer's approval if they wish to take time off.

■ Regulations Applicable to Workplaces with Less Than Five Permanent Employees
Under the Labor Standards Act, there are regulations that apply to workplaces with less than five permanent employees. These regulations include the requirement to have a written employment contract, provisions for holidays and rest periods, compensation for occupational accidents, wage calculation and payment, restrictions on dismissal and notice of dismissal, and maternity leave. This means that even employees working in workplaces with less than five permanent employees that are excluded from the application of the Labor Standards Act are subject to minimum wage and severance pay, as well as penalty provisions for wage payment compliance and wage arrears. While there are no restrictions on dismissals, if an employer wishes to dismiss an employee, they must give at least 30 days' notice and pay one month's severance pay if they fail to do so. Additionally, in the event of a work-related injury, the employee is entitled to the same compensation provisions under the Industrial Accident Compensation Insurance Act, such as medical benefits, leave benefits, and disability benefits, as regular employees.

For further questions, please
call (+82) 2-539-0098 or email bongsoo@k-labor.com

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