We highlight below key labor law changes that have become effective earlier this year, and those that will become effective in May of this year.
• Strengthened guarantee of annual leave for employees who have worked for less than one year (Article 60 of the Labor Standards Act (the "LSA"): Effective May 29, 2018)
Currently, the LSA provides that employees who have worked at a company for less than one year accrue one day of paid leave per month within the first year of continuous employment. However, if an employee uses these paid leave days within the first year of employment, then the number of used paid leave days is offset against the number of paid annual leave days the employee is awarded in the second year of employment (15 days of paid leave is given to employees whose attendance rate is 80 percent or higher in the first year of employment (see Article 60(3) of the LSA)). Therefore, in total, employees only receive a maximum of 15 days of paid annual leave for the first two years of employment.
In the amended LSA, effective May 29, 2018, Article 60(3) of the LSA has been deleted. Hence, even if employees who have worked for less than one year use their paid leave days, there will be no offset against the paid annual leave days (i.e., 15 days) provided to the employees after one year of continuous service with the company. As a result, employees will be able to receive up to 26 days of paid annual leave during the first two years of employment (up to 11 days in the first year of employment, and 15 days in the second year of employment).
• Strengthened guarantee of annual leave for employees reinstated after childcare leave (Article 60 of the LSA: Effective May 29, 2018)
Under the current version of the LSA, the childcare leave period does not count towards attendance at work that is used to calculate an employee’s number of paid annual leave days.
However, when this amendment to the LSA becomes effective in May, the childcare leave period will be considered as attendance at work used to calculate the number of paid annual leave days entitled to an employee. Further, the paid annual leave days for employees reinstated after childcare leave will also be fully guaranteed. Article 60(6)(iii) of the amended LSA will be applicable to employees who apply to take childcare leave after the effective date of the amended LSA, specifically, Article 60(6)(iii).
• Strengthened obligation by employers to address sexual harassment in the workplace (Article 14 of the Gender Equal Employment Opportunity and Work-Family Balance Assistance Act (the “GEEA”): Effective May 29, 2018)
Under the amended GEEA, anyone can report to an employer an occurrence of sexual harassment in the workplace. The employer then has the obligation to conduct an investigation and take necessary measures to protect the victim, such as changing the place of work or placing the victim on paid leave. An employer who violates these obligations may be subject to an administrative fine of up to KRW 5 million.
Additionally, the amended GEEA prohibits an employer from dismissing or taking any other disadvantageous measures against an employee who reported the occurrence of sexual harassment in the workplace and/or the victim. The amended law also increases the criminal fine (from KRW 20 million to KRW 30 million) against an employer in violation of this amendment.
Further, under the amended GEEA, even where the acts of sexual harassment are committed by, for example, a client or customer, the employer becomes obligated to take necessary measures to protect the victim, such as changing the place of work or placing the victim on paid leave. A violation of these obligations may subject the employer to an administrative fine of up to KRW 3 million.
Further, an employer is obligated to post the contents of the annual sexual harassment prevention training. An employer in violation of this obligation may be subject to an administrative fine of up to KRW 5 million.
• Leave to be provided for fertility treatment ("Fertility Treatment Leave"): three days of leave per year (Article 18-3 of the GEEA: Effective May 29, 2018)
The amended GEEA now requires an employer to provide Fertility Treatment Leave (three days per year) to help employees receive medical fertility treatments, such as artificial insemination and IVF (in vitro fertilization). An employer is required to provide the first day of the three days of Fertility Treatment Leave as paid leave (the other two days are unpaid leave days).
Also, the amended GEEA prohibits employers from taking disadvantageous measures (such as dismissal or disciplinary action) against an employee due to Fertility Treatment Leave. When an employer violates this obligation, the company may be subject to an administrative fine of up to KRW 5 million.
• Scope of industrial accidents that may be deemed as an “occupational accident” during "usual" commuting expanded (Article 37, etc. of the Industrial Accident Compensation Insurance Act (the "IACIA"): Effective January 1, 2018)
In addition to accidents that occur while employees commute to or from work under the control and management of their employer, the IACIA has been amended so that an accident that occurs while an employee commutes to or from work using his/her own usual route and means (e.g., using his/her car, bicycle, public transportation, or walk) will be deemed, in principle, an occupational accident.
• Employers required to conduct training to improve employees' awareness of and to eliminate bias towards disabled persons (Article 5-2 of the Act on Employment Promotion and Vocational Rehabilitation for Disabled Persons: Effective May 29, 2018)
An employer is required to conduct training to improve employees' awareness of disabled persons to eliminate bias in the workplace towards disabled persons. In doing so, government aims to create stable working conditions, and expand employment opportunities for disabled workers. An employer violating this obligation may become subject to an administrative fine of up to KRW 3 million.
Additionally, the Ministry of Employment and Labor may recognize companies as good employers in the employment of disabled persons. One benefit these recognized companies would enjoy is gaining an advantage when entering into contracts with state and local governments and public institutions for construction work.
Significance/Impact:
Companies should carefully review company policies, procedures, and practices and make appropriate changes to reflect these labor law changes (e.g., amend their rules of employment).
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