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Nov 23, 2010

Korea Rules of Employment Required When Employing Ten or More Workers in Korea

A few minutes ago, I was contacted by a new client that was advised by the  former counsel that they were not required to have employment rules.   In most cases, an employer that employs ten or more workers must have rules of employment and the rules must be filed with the Ministry of Employment and Labor.


Article 93 (Preparation and Report of Rules of Employment)

An employer who ordinarily employs ten or more workers shall prepare the rules of employment regarding the matters falling under each of the following subparagraphs and report such rules to the Minister of Labor. The same shall also apply in case where he/she amends such rules:

1. Matters pertaining to the starting and ending time of work, recess hours, holidays, leaves, and shifts;

2. Matters pertaining to the determination, calculation and payment method of wages, the period for which wages are calculated, the time of paying wages, and pay raises;

3. Matters pertaining to the methods of calculation and payment of family allowances;

4. Matters pertaining to retirement;

5. Matters pertaining to retirement allowances under the provisions of Article 8 of the Guarantee of Workers’ Retirement Benefits Act, bonuses, and minimum wages;

6. Matters pertaining to the burden of workers’ meal allowances, expenses of operational tools or necessities and so forth;

7. Matters pertaining to educational facilities for workers;

8. Matters pertaining to the protection of workers’ maternity and work- family balance assistance, such as leaves before and after childbirth and child-care leaves;

9. Matters pertaining to safety and health;

9-2. Matters pertaining to the improvement of environment of a place of work according to characteristics of workers, such as sex, ages or physical conditions, etc.;

10. Matters pertaining to assistance with respect to occupational and non- occupational accidents;

11. Matters pertaining to award and punishment; and

12. Other matters applicable to all workers within the business or workplace concerned.


Nov 7, 2010

South Korea Snapshot

The Wall Street Journal website has a good graphic page that provides a decent snapshot of Korea.

Some of the statistics may be a little surprising.

The page notes that GDP per capita is less than the OECD average of USD 33,000.00; that Koreans work the most hours in the OECD; the largest trade partner is China; the number one vegetable grown by quantity is pepper; and the number one tourist destination is a Daecheon Beach (Mud Festival).


Nov 3, 2010

Audit Proof your Independent Contractor Expenses

I just read a great post on an even better blog entitled the New York Small Business Law Blog. The blog post - Tips on Making your Independent Contractors Audit Proof - notes that the feds are increasing their efforts to crack down on misclassified independent contractors.

They advise the attorney gave on how to avoid the scrutiny of the government would have also been useful for a client of ours that ran into an issue with the Korean National Tax Service and the Ministry of Labor a few years back. 

The client, who was working with a large ubiquitous Korean law firm, lost a costly battle with the Ministry of Labor and National Tax Service because of a naively drafted contractor agreement and poor advice given by a team that consideres itself the leading team in labor law.  Never believe those publications that rate law firms.  The blog post reawakened my memory of this incident. 

The practical advice noted in the New York Small Business Law Blog can also be useful for your independent contractor needs in Korea.
""•Pay your independent contractors per assignment or per project, not by the hour, and don't pay them a fixed weekly or monthly salary;
•Keep them away from your “real” employees and don’t dress and equip them like employees, i.e. don't give them company business cards, don't let them use your company letterhead, don't let them perform the exact same tasks that your employees perform.

•Keep the independent contractors on a long leash (give them their "independency"). They should be able to control when they can work and how they work; Avoid micro-managing their work.

•Don’t forbid them from working for other employers on similar projects. But you could require them to at least inform you when they do, to give you the option to limit their engagement at that time.

•Put all of the above into an independent contractor agreement, a.k.a. consultant agreement. ""


Basic Agreements for Doing Business in Korea

Below are the basic Korean start-up agreements, normally, necessary for doing business in Korea. The list is not exhaustive.

We will be writing on all of these agreements over the next couple of months. Please note we have articles about Korean shareholder (JVC), distributor, license and other agreements already posted.

Korean Stock Corporation (Chusikhaesa)
  • Shareholder Agreement/Joint Venture Agreement
  • Article of Incorporation
  • Intellectual Property Assignment/License Agreement
  • Confidentiality/Nondisclosure Agreement
Employees and Management in Korea
  • Employment/Contractor Agreements
  • Work Rules
  • Confidentiality Agreement
Korean Customers/Vendors
  • Service Agreement
  • License Agreement
  • Sales/Distributor Agreements
  • Lease Agreement
  • Terms of Use/Privacy Policy