South Korea: 6 Key Areas on the New President’s Labor and Employment Agenda

South Korea’s newly elected President, Lee Jae-myung, is expected to make changes to strengthening labor rights and improving working conditions in South Korea, with a focus on fair compensation, reduced working hours, and expanded unionization.

HR Policy Global’s Take: Companies should prepare for enhanced labor rights, reduced working hours, and new initiatives on gender pay equity, which could lead to higher operational costs and necessitate adjustments in HR strategies to comply with the changes.

Here are the key changes the President has been considering: 

• Adding Sectoral Collective Bargaining: As a pro-labor president, Lee might propose changes to the Trade Unions and Labor Relations Adjustment Act (TULRAA) aim to enhance bargaining rights for subcontracted workers by introducing agreements at various levels, such as sectoral collective bargaining. This could create challenges for multinational employers who have previously avoided unionization in Korea, as TULRAA currently acknowledges only single-enterprise bargaining.
• Reducing Working Hours to a 36-Hour Workweek: The government plans to cut working hours below the OECD average by 2030. Gyeonggi Province, where Lee used to govern, began a 36-hour workweek trial in August 2024, with some private employers participating. However, the change is expected to face resistance from businesses.
• Protection of Workers' Rights to Overtime Compensation: The president plans to establish clear frameworks for self-employed and platform workers on overtime compensation. For regular employees, the government will focus on prohibiting fixed salaries for regular employees.
• Strengthening the Liability of Prime Contractor: Plans to amend the Serious Accidents Prevention Act (SAPA) could make prime contractors responsible not only for establishment of safety plans of their own operations, but also for the safety of the workers of subcontractors and platform workers or casual laborers.
• Creating Gender Equality in the Workplace: Catching up the global trend, President Lee has committed to implementing a gender pay transparency system in public institutions. This initiative will also include the integration of "gender equality indicators," such as quotas to ensure female representation in management positions within these entities. The reforms in public institutions could have an impact on private employers, putting pressure on changes.
• Expanding Employee Welfare and the Social Safety Net: the new government is contemplating expanded sick leave and childcare benefits and a sick leave bill.

Action plan: Companies in Korea should stay alert to any upcoming changes and remain compliant with evolving regulations. HR Policy Global will work with our partner to bring key updates and new developments.