28 Jan 2021

Below are four key HR/Labour law amendments for 2021.

By Robert Flemer, Kim & Chang

  1. Expanded enforcement of weekly 52 working hour limit for private companies with 5 to 49 employees
  • Effective 1 July 2021, the weekly maximum working hours will reduce from 68 hours (40 hours/week + 12 hours/week + holiday work of up to 16 hours) to 52 hours (40 hours/week + 12 hours/week).
  • However, businesses with 5 to 29 employees will temporarily (from 1 July 2021 to 31 December 2022) be allowed to have employees work an additional eight hours of overtime per week by prescribing (i) the reason and period of need for additional overtime in excess of the regular cap (12 hours per week) and (ii) the scope of target employees. These details must be contained in a written agreement with the employee representative.
  1. Compulsory application of holidays of government offices as paid holidays for private companies with 30 to 299 employees
  • Effective 1 January 2021, holidays under the Regulations on Holidays of Government Offices will be applicable as paid holidays for private companies with 30 to 299 employees. If a company wants employees to work on such a holiday and substitute the holiday with another working day, it must reach a written agreement with the employee representative.
  1. Working hour reduction for family care, etc. for private companies with 30 to 299 employees
  • Effective 1 January 2021, for private companies with 30 to 299 employees, if an employee needs to take care of their family or personal health, is 55 years or older and is preparing for retirement, and/or pursuing their studies and applies for a reduction to working hours for such reason(s), the employer is required to grant it.
  • Working hours after the reduction shall be 15 to 30 hours per week.
  • The period of reduction in working hours is up to one year. Based on reasonable grounds, the period may be extended by up to two years (except for study purposes).
  1. Minimum hourly wage of KRW 8,720 (approx. £5.92) in 2021
  • The minimum hourly wage in 2021 will be KRW 8,720 (approx. £92), which is an increase of around 1.5% compared to the 2020 minimum hourly wage of KRW 8,590 (approx. £5.83).
  • Bonuses exceeding 15% of, and welfare benefits exceeding 3% of, the monthly calculated sum (KRW 1,822,480 (approx. £1,240) based on 209 hours) of the 2021 minimum hourly wage will be counted in the calculation of the minimum wage (per a phased expansion of this credit from 2019 to 2024).

Comment

Employers should familiarise themselves with the new 2021 labour law provisions in South Korea, noting their effective implementation dates.

© 2021 Kim & Chang

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