Korea

The Korean Ministry of Employment and Labor and the South Korean government intend to revise the current Labor Standards Act and increase regulations dealing with work hours.

Before establishing global HR practices in their businesses in Korea, foreign companies need to understand the country's distinct cultural traits and labor dynamics in order to avoid significant tension and conflict.

The Korean Chamber of Commerce and Industry (KCCI) announced on Monday, May 16th, 2011 that 59% of salaried Korean workers would be willing to accept a reduced salary for an opportunity to work past their retirement age.

On April 8, 2011, South Koreas Minimum Wage Council formally convened to discuss the minimum wage for 2012. There is considerable dissention among the Councils 27 members.

Historically, Korea has had more labor disputes than any other country in Asia over the last 25 years. Westerners have often seen Korean workers on strike on the TV news channels.

Koreas Ministry of Employment and Labor announced that the Korean government will offer increased subsidies to employers who hire new workers or vulnerable persons.

According to recent reports, over 75% of companies in South Korea are now in compliance with the revised Trade Union and Labor Relations Adjustment Act that was enacted on July 1, 2010.

In July 2010, the South Korean government announced a new smart work plan that is aimed to boost the countrys notoriously low labor productivity and cut costs for companies.

March 4, 2010 marked the inauguration of a new labor union alliance in Korea called New Hope Labor Solidarity.

In early 2010, Korean government officials announced plans for new legislation that would reduce the countrys notoriously long working hours.

Koreas Ministry of Labor announced in December 2009 that foreign workers in Korea will no longer be required to renew their visas abroad when changing jobs within Korea.

In December 2009 a moratorium on a law limiting union influence in South Korea is set to expire.

According to an August 2009 report from the Organization for Economic Cooperation and Development (OECD), South Korea was the only country to record a drop in unit labor costs during the first quarter of 2009.

On July 17, the KT Union withdrew from the Korean Confederation of Trade Unions (KCTU), Koreas largest umbrella organization of trade unions. The KT Union represents KT, a major telecommunications service provider.

As of July 1, 2009, the Korean Non-Regular Workers Act has now been in effect for exactly two years. Part of the law stipulates that irregular workers who work at the same company for two years must be transferred to regular employee status.

Recent statistics show that exports in South Korea are down by nearly 30% from the same period last year. The severity of this economic situation has caused an increase in another phenomenon Korean housewives seeking employment in record numbers.

Firms such as 3M and American Express have announced wage freezes in Korea and many smaller manufacturing companies are downsizing to accommodate for the sharp drop in demand for exports.

Over the years, Korea's rigid labor laws have pushed both local and foreign companies to rely heavily upon non-regular workers. There are two main types of non-regular workers in Korea: fixed-term employees and dispatch workers.

According to a recent study conducted by the International Labor Organization, more than 50% of Koreans work over 49 hours per week. This is the second highest average in the world.

On July 28, 2008, a new law came into effect in Korea lengthening the time that foreigner laborers can work legally in the country. This regulation applies to lower level workers.

A recent survey conducted by JobKorea, the largest online recruitment website in South Korea, showed that nearly 95% of recent graduates from Korean universities cited a willingness to work overseas.

The Korean Ministry of Labor announced last month an extensive plan to improve the local business environment for foreign companies operating in South Korea.

A December 2007 survey conducted by the Korea International Labor Foundation found that of 80 foreign firms polled in Korea, one third cited rising labor costs as the largest deterrent to investment in Korea.

A recent study shows that the cost of living for expatriates in Beijing, Shanghai, Singapore, and Seoul is continuing to increase.

Despite the rising participation of South Korean women in the workforce, employment discrimination against women is still widespread.

While falsifying credentials can occur anywhere, the temptation is especially strong in Korea, given the countrys heavy emphasis on academic achievements.

A recent study indicated that women filled nearly 60% of the new jobs created in Koreas financial sector in 2006.

In late December, 2006, 44,000 workers initiated a labor strike against Hyundai, Koreas largest automaker. The workers have refused to work overtime until the company pays promised year-end bonuses of 1 times average monthly salary.

South Koreas Ministry of Health and Welfare has announced that, in 2007, health insurance premiums will rise by 6.5%.

On June 19th, 2006, the South Korean Cabinet approved a revision to the immigration laws to simplify the hiring of ethnic Koreans in construction jobs and service jobs.

The South Korean Parliamentary Committee recently proposed a new regulation that outlines guidelines for company hiring policies with regard to non-regular and regular workers.

On December 20, 2005, the National Tax Service (NTS) in Korea announced the publication of the Easy Guide for Foreigners Year End Tax Settlement. NTS hopes that this new guide will help foreigners filing for income tax returns.

Foreign companies can face difficulties when acquiring and assimilating Korean companies into their own organizations. A significant obstacle is the strength and militancy of labor unions in Korea.

The Korea Exchange Bank (KEB) began offering special "foreigners only" deposit accounts in August 2005. The account, called "Korean Dream Savings," is a one-year installment personal deposit account for foreigners residing in Korea with valid visas.

The Employee Retirement Security Act (ERSA), passed by the Korean National Assembly in 2004, will take effect on December 1, 2005. It provides guidelines for implementing new employer-sponsored pension plans that are externally funded and managed.

The Korean Exchange Bank (KEB) has developed a new credit card targeted only at expatriates working in Korea called the Expat Card, which was announced this past summer.

Salaries of Indian workers increased by nearly 15% in the last year, the highest in Asia. Behind India were China and the Philippines, which both saw salary increases of about 8%. Other high growth countries were Korea (7%) and Thailand (6.5%).

In a recent study by the World Banks International Finance Corporation, Korea ranked 105th out of 155 countries in labor flexibility. In contrast, Hong Kong was ranked 3rd, Singapore 7th, Japan 20th, and Thailand was ranked 23rd for labor flexibility.

The Ministry of Labor in Korea has recently released the first Labor Statistics Survey for 2005, outlining the job market and hiring trends for the first quarter of this year.

In May 2005, Koreas Ministry of Labor (MOL) published over 40 of Koreas existing labor laws in English. The MOL plans to distribute copies to foreign-invested companies, international organizations, Korean embassies, and other employers.

A recent survey, jointly conducted by Gallup Korea and Invest Korea, found that many foreigners working in Korea are dissatisfied with their living conditions.

The National Health Insurance Corporation (NHIC) is one of the main organizations in Koreas social security system. The government announced in January 2005 that it will increase health insurance coverage for NHIC subscribers.

As Korea continues to face a youth jobless rate of around 9%, the second highest in the world, the government has implemented various programs to encourage foreign companies to hire even more Koreans, particularly young workers.

On November 2, 2004, in an effort to add more flexibility to the labor market, the Korean government approved a bill allowing companies to hire an increased number of "irregular workers."

On October 13, 2004, the Korea Employees Federation (KEF) released an official letter to its 4,000 member companies urging them to ease their hiring restrictions for new employees.

On June 25, 2004, the Korean Minimum Wage Council finalized its decision to raise the minimum wage in Korea by 13.1% for the next fiscal year.

In order to create a friendlier foreign investment environment, the Korean Ministry of Finance and Economy has implemented new income tax rules, exclusively for expatriate workers and foreign companies.

In an effort to financially stabilize the pension system and better prepare for the fast-aging society, the Korean government approved long-term measures to reform the pension scheme.

Starting this year, expatriate workers in Korea have a choice in calculating their Korean income tax liability. A new option permits foreign employees to simply pay a 17% flat rate tax on their gross income.

The Korea Investment Service Center and the Ministry of Commerce, Industry and Energy announced in October 2003 that it would begin drawing up measures to improve the housing conditions for foreign residents.

Beginning in July 2004, companies in Korea employing more than five workers are required to establish retirement pension systems for their employees.

Companies in Korea are beginning to experiment with unconventional interviewing and recruiting methods in order to find talented candidates for their job openings.

On August 29, 2003, the Korean National Assembly passed a bill mandating the gradual shortening of workweeks. The bill will gradually reduce average working hours from 44 hours a week to 40 hours a week.

The South Korean government announced on September 4, 2003, a new draft plan that will address the current labor-management conflicts.

The Korean National Assembly passed a new bill on July 31, 2003, allowing the implementation of a new work permit system for foreign employees to run concurrently with their existing industrial trainee program.

Koreas Ministry of Labor is planning to increase the requirements for companies to hire disabled persons in their workforce. Companies who fail to meet standards are liable to monthly penalties of 392,000 won (US$326) per position.

A recent survey conducted early this year by a Korean online recruiting information provider, found that 31% of 7,528 university students in Korea interviewed said they would prefer working for a foreign company versus a local firm.

South Koreas Justice Ministry announced on March 16, 2003, that it is planning to ease the eligibility requirements for foreigners applying for permanent residency or citizenship in Korea.

In an effort to attract greater foreign investment into South Korea, the Korean government has announced plans to reduce tax filing paperwork for foreign companies as well as increased tax deductions for foreign employees.

Results from a 2002 survey, which surveyed 266 foreign-invested firms doing business in South Korea, found that the number one cause for complaint for foreign firms conducting business in Korea was labor related issues.

South Koreas president-elect, Roh Moo-Hyun announced last month his intentions to create a more flexible local labor market. Roh stated that large labor unions in Korea still have the authority to prevent employers from laying off workers.

The Korean government has heeded the advice of the American Chamber of Commerce in Korea (AmCham Korea) and plans to offer tax incentives to foreign companies and businesspeople residing in Korea beginning in 2003.

The Korean government plans to finalize a new bill that will introduce a corporate pension system to Korean companies. The bill will be submitted to the National Assembly by early next year and may possibly be implemented by the first half of 2003.

From November 1st this year, ethnic Koreans living abroad will be granted work permits to live and work in Korea. The permits will be distributed mainly for employment in the service industry and the social welfare sector.

On May 23, 2002, representatives of twenty-six South Korean financial institutions ratified the decision to institute five-day workweeks beginning on July 1, 2002. The implementation of a five-day workweek was not without controversy.

Late last month, Samsung Economic Research Institute (SERI) issued a report warning of a drastic shortage of science and engineering manpower. Many top performers in cutting-edge fields have left Korea for better paying jobs in other countries.

Tens of thousands of Koreans have showed interest in recent months in working outside Korea. Though Koreas economy has recovered from its low point in early 1998, unemployment and economic uncertainty remain lingering concerns.

Recently public support in Korea is dwindling for trade unions

U.S. and South Korea agree to end dual social security coverage and contributions.