Collective Labor-Management Relations
2. Persons of Distinguished Service to the Nation
A public or private enterprise and public or private organization which ordinarily employs at least twenty persons a day shall preferentially employ persons eligible for employment assistance in not lower than the employment rate for each enterprise subject to employing persons eligible for employment assistance, which is set by Presidential Decree (Appendix 9 of the Enforcement Decree of the Act of the Honorable Treatment of and Support for Persons, etc. of Distinguished Service to the Nation), within the scope of three to eight percent of the total number of its employees.
An employer who refuses to employ such persons of employment assistance without any just grounds after an instruction from the Minister of Patriots and Veterans Affairs shall be imposed KRW 10 million or more of administrative fines.
Foreign-invested companies that move into free economic zones may be excluded from the application of the obligation to hire persons with disabilities and national meritorious workers, while foreign-invested enterprises that move into free trade zones may be excluded from the application of the obligation to hire persons with disabilities.
※ Related law: Article 33-2, 86 of the Act of the Honorable Treatment of and Support for Persons, etc. of Distinguished Service to the State
Q1. Hiring suitable employees and dismissing unsuitable employees is difficult. May a company have certain period of time to verify a new employee’s qualities?
A company may verify the employee’s qualities via a probationary period stated on the labor contract. The period is not fixed by law but the majority of companies have a three-month probationary period as accorded in Article 26 of the Labor Standards Act which states that advance notice of dismissal is not essential when the period during which the employee has worked continuously is less than three months.
Q2. How is the minimum wage for 2020 calculated on a 209-hour basis?
The average weeks of a month in a year is 4.345 weeks (365 days ÷ 7 days ÷ 12 months). The weekly workhours are 48 hours - eight hours per workday and eight hours during the weekly holiday. If 48 hours a week is multiplied with the monthly average weeks, the total hours comes to 208.56, or 209 hours. (4.345 X 48 = 208.56)
Q3. Is it violation of the law concerning work hours if an employee works 15 hours a day for three days a week, not exceeding 52 hours per week?
The employee has worked seven hours of overtime work for three days perweek, making the total overtime work hours per week 21 hours. The Labor Standards Act stipulates that one week's overtime work cannot exceed 12 hours, so even if the total work week is within 52 hours, it shall constitute a violation of the law.
Q4. Is Labor Day a statutory holiday even if it is not stated in the Labor Standard Act?
Labor Day is not a statutory holiday under the Labor Standards Act, but the Designation of Workers’ Day Act prescribes that Labor Day falls on May 1 and shall be a paid holiday under the Labor Standard Act.
Q5. Should the weekly paid holiday be fixed on Sunday?
The Labor Standards Act provides an average of one or more weekly paid holiday, but does not prescribe a weekly holiday on a particular day. Thus, it is not required to be granted on Sunday. The starting point of reckoning a week can be set by labor and management through internal regulations, employment rules, labor contracts, and collective agreements.
Q6. Is it possible for an executive of a foreign-invested company to subscribe to employment insurance?
A worker in a business that is covered by employment insurance becomes an insured employee, and a representative director and others are not insured.
A worker is a person who provides work under the direction and supervision of the employer and receives wages in return. One is not an employee who is in the position of representative or executive body, such as a director of a corporation or an auditor. However, even if one’s title is executive director or vice president, it is necessary to determine the worker's status based on the specific facts since the employee is provided with work in a subordinate relationship without having any actual right to carry out work and is not responsible for the management of the company.
Q7. What are the cases in which foreign employees are excluded from subscription to national pension?
When the foreign employee's home country law does not apply to the people of Korea regarding "the pension commensurate with the national pension"
under the National Pension Act.
- When a foreigner overstays the permitted period of sojourn
- When a foreigner is not registered or an order is issued to deport him or her.
- When the status of sojourn is as follows; Diplomacy(A-1), Foreign Government Official(A-2), International agreement(A-3), Visa Exempted(B-1), Tourist/Transit(B-2), Short-term News Coverage(C-1), Short-term Visit(C-3), Short-term Employee(C-4), Korean Arts and Culture(D-1), Student(D-2), Industrial Trainee(D-3), General Trainee(D-4), Religious Worker(D-6), Visiting or Joining Family(F-1), Dependant Family(F-3), Others(G-1)
- When a foreigner is not subject to the "National Pension Act" in any other statute or treaty
Q8. Is a foreigner who works in a foreign-invested company and has a D-8 visa obliged to subscribe to health insurance?
In principle, the foreign employee is subject to obligatory subscription to national health insurance. However, according to Article 109 (5) of the National Health Insurance Act and Article 61-4 of the Enforcement Rules of the Act, where a foreigner residing in Korea can receive medical care equivalent to health care benefits through a foreign insurance or a contract with his/her employer and the employer or subscriber applies for exemption from subscription, he/she can be excluded from subscription.
Q9. Is National Pension refundable when a foreigner returns to his/her home country?
A lump-sum refund can be applied to a foreigner who returns to his/her home country in the following cases : (Source : www.nps.or.kr)
ⓐ In cases where a foreigner whose home country grants Koreans benefits in compliance with a lump-sum refund under the National Pension Scheme
ⓑ In cases where a foreigner whose home country has concluded a social security agreement with Korea regarding the payment of the lump-sum refund.
※As of May 2019 : 18 countries inclduing Canada, United States, Germany, Hungary, France, Australia, Czech Republic, Belgium, Bulgaria, Slovakia, Poland, Romania, Austria, India, Turkey, Switzerland, Brazi, Peru
ⓒ In cases where a foreigner who has been covered under the National Pension Scheme with the status of sojourn of E-8 (Employment for Training), E-9 (Non-professional Employment), or H-2 (Visiting Employment), returns to his/her home country
Q10. If the notice of termination was given five days short of the 30 days notice period, shall the employee be given a five-day allowance?
When an employer intends to fire (including dismissal for managerial reasons) an employee, the employer shall make a notice of dismissal at least 30 days in advance, and if the employer has not made the notice 30 days in advance, the employer shall pay the amount equivalent or more than the ordinary wage for 30 days or more (allowance for advance notice of dismissal). The period of termination notice is calculated as calendar days, not working days, so if there is a holiday it is not extended, and if there is a shortage of one day
Korea is the world's 4th largest intellectual property application and 5th largest international patent applicant for Patent Cooperation Treaty (PCT), making the country a patent powerhouse. In general, patents are divided into industrial property rights, copyrights, and new intellectual property rights, although industrial property rights are most common in Korea. The Korean Intellectual Property Office, designated as an international research institute for PCT international applications and an international reserve review agency in 1999, has improved its system by strengthening related laws and systems and simplifying administrative procedures to actively cope with the rapidly changing global trade environment, and providing various support for the acquisition and protection of intellectual property rights.
Industrial Property Rights in Korea and its Competitiveness
Industrial Property Right Application (Unit:number of applications)
Type of Patent 2018
Patent Rights 209,992
Utility Model Rights 6,232
Trademark Rights 200,341
Design Rights 63,680
Source : 2018 White paper on the knowledge industry published by the Korean Intellectual Property Office