CONTENTS
- 1. Violation of the Labor Standards Act | A Fundamental Law for Workers
- 2. Violation of the Labor Standards Act | Failure to Prepare an Employment Contract
- - Discrimination Against Fixed-Term and Part-Time Workers
- 3. Violation of the Labor Standards Act | Dismissal and Disciplinary Action
- 4. Violation of the Labor Standards Act | Wages and Severance Pay
- - Disadvantages to Employers Who Violate the Labor Standards Act
- 5. Violation of the Labor Standards Act | Working Hours, Rest, and Holidays
- - Nonpayment of Overtime, Night Work, and Holiday Work Allowances
- - Failure to Grant Annual Paid Leave
- 6. Violation of the Labor Standards Act | Protection of Female and Minor Workers and Workplace Harassment
- - Protection of Minor Workers
- - Workplace Harassment
- 7. Violation of the Labor Standards Act | Accident, Disability, and Survivor Compensation
- - Criteria for Recognizing an Occupational Accident
- - Proving a Substantial Causal Relationship with Work
- 8. Violation of the Labor Standards Act | Rules of Employment and Other Provisions
- 9. Violation of the Labor Standards Act | Extinctive Prescription and Methods of Proof
- - Evidence Proving a Violation of the Labor Standards Act
- - Points to Consider from the Employer's Position
- - Understanding the Law as the Foundation of Protecting Rights
1. Violation of the Labor Standards Act | A Fundamental Law for Workers
A violation of the Labor Standards Act collectively refers to all acts that violate the 'Labor Standards Act,' which sets the standards for working conditions in order to guarantee the basic livelihood of workers.
Although the Labor Standards Act applies to all workplaces that regularly employ 5 or more workers, in practice, violations of the Labor Standards Act such as failure to prepare an employment contract, unpaid wages, and unfair dismissal frequently occur regardless of the size of the workplace or company.
Workers with limited legal knowledge often fail to recognize a violation of the Labor Standards Act, or, even when they do recognize it, endure the harm because they do not know through what procedure to protect their rights.
This sets out in detail the overall matters concerning violations of the Labor Standards Act so that workers can identify such violations themselves and respond directly.
2. Violation of the Labor Standards Act | Failure to Prepare an Employment Contract
Article 17 of the Labor Standards Act provides that, when an employer concludes an employment contract with a worker, the employer must specify in writing and provide essential conditions such as 1) wages, 2) contractual working hours, 3) holidays, and 4) annual paid leave.
An employment contract concluded by oral agreement alone is also valid, but disputes may later arise over the burden of proof. The text messages, messenger conversations, screenshots of job postings, and work logs created at the time of hiring therefore serve as important evidence.
If the requirement to specify working conditions under the Labor Standards Act is violated, the worker may claim damages and may rescind the employment contract.
An employer who violates this may be subject to a fine of not more than 5 million won.
Discrimination Against Fixed-Term and Part-Time Workers
The Act on the Protection of Fixed-Term and Part-Time Employees and the Labor Standards Act follow the principle of equal pay for work of equal value.
Fixed-term employees and part-time employees must not be discriminated against in wages or welfare benefits merely because of their status.
Where a fixed-term or part-time employee performs the same work but does not receive bonuses, holiday allowances, and the like, and files an application for correction with the Labor Relations Commission, a corrective order may be issued.
3. Violation of the Labor Standards Act | Dismissal and Disciplinary Action
Article 23 of the Labor Standards Act prohibits unfair dismissal, including dismissal, leave of absence, suspension, transfer, salary reduction, and other punishment without justifiable reason.
A dismissal must have a justifiable ground, the grounds and timing of the dismissal must be notified in writing, and prior notice 30 days in advance is the principle.
Accordingly, from the employer's standpoint, an urgent managerial necessity must exist in order to dismiss an employee.
However, where the employee's continuous period of employment is less than 3 months, or where the employee intentionally causes serious disruption to the business or inflicts property damage, the employer may dismiss the employee without advance notice of dismissal and is not required to pay 30 days' worth of ordinary wages.
In addition, if the grounds and procedures for disciplinary action are not specified in the rules of employment, a disciplinary dismissal may be invalid.
The employer must go through procedures such as convening a disciplinary committee and providing an opportunity to give an explanation.
In cases of unfair dismissal, where the employer forces the employee to write a letter of resignation or unilaterally gives notice of dismissal by text message, disputes may arise through means such as an application for remedy for unfair dismissal. Therefore, in order to prove the unfair dismissal, recordings or message records related to the dismissal should always be preserved.
4. Violation of the Labor Standards Act | Wages and Severance Pay
Falling below the minimum wage and the nonpayment of wages are also frequently occurring disputes involving violations of the Labor Standards Act.
The Minimum Wage Act prohibits paying wages lower than the minimum wage announced each year.
Unpaid wages generally consist of basic pay, overtime, night, and holiday allowances, annual leave allowances, and the like.
From the employee's standpoint, payment may be compelled through a complaint to the Ministry of Employment and Labor or a wage lawsuit.
In addition, an employee who has worked continuously for one year or more has the right to receive, as severance pay, an average wage of 30 days or more for each year of continuous service.
Some employers fail to pay severance pay on the ground that the four major insurances were not subscribed to, but this is unlawful.
Disadvantages to Employers Who Violate the Labor Standards Act
An employer who fails to pay wages and retirement allowances on time is subject to the following sanctions.
- Imprisonment for not more than three years or a fine of not more than 30 million won
- Public disclosure of the list of employers with unpaid wages
- Prohibition of departure from the country
- A claim for damages of up to three times the wages in the case of intentional nonpayment
- Exclusion of habitual nonpaying employers from participation in subsidy and support programs, and the like
A wage nonpayment matter constitutes a crime not punishable against the victim's will, for which prosecution cannot be instituted contrary to the victim's express intent, and it is therefore also a violation of the Labor Standards Act that may be resolved quickly where the employer and the worker reach an amicable settlement.
5. Violation of the Labor Standards Act | Working Hours, Rest, and Holidays
Article 50 of the Labor Standards Act provides that working hours may not exceed 40 hours per week and 8 hours per day (excluding rest periods).
This is referred to as statutory working hours, and with the agreement of the worker, an extension of up to 12 hours per week is possible. Exceeding this is subject to criminal punishment of imprisonment of up to two years or a fine of up to 20 million won.
Nonpayment of Overtime, Night Work, and Holiday Work Allowances
Overtime work (exceeding 8 hours), night work (10 p.m. to 6 a.m. the next day), and holiday work must be paid with an additional 50% of ordinary wages.
If holiday work exceeds 8 hours, an additional 100% of ordinary wages must be paid.
At two-shift convenience stores, restaurants, and similar workplaces, there are often no weekly paid holidays and night allowances go unpaid. In such cases, a worker may claim unpaid wages by consistently recording arrival and departure times and keeping CCTV footage, work schedules, and similar records.
Failure to Grant Annual Paid Leave
A worker who has worked at least 80% of the days in a year is entitled to 15 days of annual paid leave.
A worker whose continuous service is less than one year, or who worked less than 80% of the days in a year, must also be granted one day of paid leave for each month of full attendance.
In addition, a worker who has worked continuously for three years or more must be granted paid leave with an additional day for every two years of continuous service exceeding the first year.
Failing to grant such leave or replacing it with an allowance is unlawful.
6. Violation of the Labor Standards Act | Protection of Female and Minor Workers and Workplace Harassment
An employer may not require a pregnant employee to perform overtime work, night work, or holiday work, and must ensure 90 days before and after childbirth (at least 45 days of which must be after childbirth).
In addition, an employer must not have a pregnant female employee perform overtime work, and where the employee so requests, must transfer her to a lighter type of work.
An employer who refuses to do so is subject to imprisonment for not more than two years or a fine not exceeding 20 million won.
Protection of Minor Workers
In principle, the employment of persons under the age of 15 (including persons under 18 who are enrolled in middle school) is prohibited.
Even for those aged 15 or older, a certificate proving their age and a written consent from a parent or other person with parental authority or from a guardian must be obtained.
The work of a minor may not exceed seven hours per day or 35 hours per week. By agreement between the worker and the employer, it may be extended by up to one hour per day and five hours per week, but night work is prohibited.
This is an area frequently violated at workplaces that employ adolescent part-time workers.
Workplace Harassment
An employer or an employee must not, by taking advantage of a superior position or relationship within the workplace, cause physical or mental suffering to another employee or worsen the working environment.
Such conduct is defined as "workplace harassment," and where a person becomes aware of the occurrence of workplace harassment, that person should report it to the employer.
If an employer subjects to dismissal or any other unfavorable treatment a harmed employee who reported the occurrence of workplace harassment or a person who made such a report, the employer is subject to imprisonment for not more than three years or a fine not exceeding 30 million won.
7. Violation of the Labor Standards Act | Accident, Disability, and Survivor Compensation
Where an employee suffers an injury or illness in the course of employment, the employer must bear the medical care costs.
For an employee undergoing medical care, the employer must also provide temporary disability compensation equal to 60% of the average wage during that employee's period of medical care.
If an employee suffers an injury or illness in the course of employment and, after recovery, a physical disability remains, the employer must provide disability compensation in an amount equal to the average wage multiplied by a fixed number of days, according to the degree of disability.
Where an employee dies in the course of employment, the employer must provide the bereaved family with survivors' compensation equal to 1,000 days of the average wage, and must pay funeral expenses equal to 90 days.
If an employer violates the Labor Standards Act provisions on compensation, the employer is subject to imprisonment for not more than 2 years or a fine of not more than 20 million won.
Criteria for Recognizing an Occupational Accident
- An accident occurring while performing work or acts under the employment contract
- An accident occurring due to a defect in or poor management of a facility while using a facility provided by the employer
- An accident occurring during an event participated in under the employer's direction or instruction, or during preparation for such an event
- An accident occurring during a rest period due to an act under the employer's control and management
Generally, a disaster caused by a worker's intent, self-harm, or criminal act is not regarded as an occupational accident.
However, even in such a case, application differs depending on the circumstances, as where self-harm by a person receiving treatment for a mental illness arising from an occupational cause is regarded as a recognized ground.
Supreme Court Judgment of March 23, 2001, 2000Du10281
The death of a worker who, in a state of temporary mental derangement caused by chronic and repeated stress from life abroad and excessive work, jumped from a window is recognized as a disaster having a proximate causal relationship with the work.
Proving a Substantial Causal Relationship with Work
Although there are criteria for recognizing an occupational accident, if it is not established that there is a substantial causal relationship with the work, such as an ‘occupational injury, disease, or death,’ it is not regarded as an occupational accident.
A causal relationship, including the performance of work and the work being the cause, must be established by the worker or the bereaved family seeking insurance benefits under the Industrial Accident Compensation Insurance Act.
If a case arises in which the employer delays or refuses to report the industrial accident, the worker may apply directly to the Korea Workers' Compensation and Welfare Service and receive insurance benefits such as medical care, temporary disability, and disability benefits.
8. Violation of the Labor Standards Act | Rules of Employment and Other Provisions
A workplace with 10 or more regular workers must prepare rules of employment, report them to the Minister of Employment and Labor, and make them known to the workers.
When making a change unfavorable to workers, the consent of a majority is required, and an employment contract that sets working conditions below the standards prescribed in the rules of employment is void.
The rules of employment must specify matters such as working hours, the method of calculating wages, retirement matters, maternity and childcare leave matters, and safety and health-related matters.
If a violation is detected, such as failing to follow the procedures for preparing and changing the rules of employment, an administrative fine of 5 million won is imposed.
9. Violation of the Labor Standards Act | Extinctive Prescription and Methods of Proof
When a worker confirms a violation of the Labor Standards Act such as those above, the worker may obtain a remedy for the worker's rights through the following methods.
Remedy procedure | Main subject/purpose | Key summary |
Petition to the Ministry of Employment and Labor | Unpaid wages, failure to prepare a labor contract, violation of working conditions, and the like | A labor inspector may, after investigation, issue a corrective order, and in the case of noncompliance an administrative fine or referral to the prosecutors' office is possible |
Request for remedy to the Labor Relations Commission | Unfair dismissal, unfair disciplinary action, unfair labor practices | An application must be filed within three months for unfair dismissal and the like, and an order for reinstatement or payment of an amount equivalent to wages is possible |
Civil litigation | Monetary claims such as unpaid wages and retirement allowances | A lawsuit is filed directly with the district court, and compulsory execution is possible after a final judgment |
Criminal complaint | Crimes in violation of the Labor Standards Act generally | A complaint is filed with the police or the prosecutors' office, the employer may be subject to a fine or detention, and it can create pressure toward a payment settlement |
A remedy for unfair dismissal is available only within three months from the date of dismissal, and a lawsuit for unpaid wages and retirement allowances is subject to a three-year extinctive prescription, so a prompt response is advisable.
Evidence Proving a Violation of the Labor Standards Act
The materials to prove a violation of the Labor Standards Act are as follows. Such proof becomes stronger as facts, documents, objective evidence, and witnesses are combined.
Points to Consider from the Employer's Position
Small workplaces may lack dedicated personnel for human resources and labor affairs, and may therefore fall short in understanding the relevant statutes and in the procedures for preparing written documents, and an unexpected shortage of funds may at times cause a temporary delay in the payment of wages.
There are also cases in which, even though there are legitimate grounds for discipline against certain employees due to unexcused absence or neglect of duties, the matter is found to be an unfair dismissal because the formal requirements of the dismissal procedure were not met.
Accordingly, employers as well should accurately understand violations of the Labor Standards Act, their application, and the relevant procedures, and clear written documentation and internal rules at the time of concluding an employment contract can serve as a starting point for preventing disputes.
Accordingly, regardless of the size of the workplace, a basic system for labor management and periodic legal review may be needed.
Employer's violation of the Labor Standards Act | Level of punishment for the employer |
| -Failing to specify working conditions and the contract period when preparing the contract -Violating the requirement of equal treatment | A fine not exceeding 5 million won |
| -Violating the provisions on advance notice of dismissal, working hours, or limits on overtime work -Failing to properly provide rest periods, annual leave, and similar entitlements | Imprisonment for not more than 2 years or a fine not exceeding 20 million won |
| -Failing to pay wages, severance pay, shutdown allowances, and similar amounts -Subjecting a victim of workplace harassment to disadvantageous treatment | Imprisonment for not more than 3 years or a fine not exceeding 30 million won |
| -Violating the prohibition on forced labor or the provisions on unfair dismissal | Imprisonment for not more than 5 years or a fine not exceeding 50 million won |
Understanding the Law as the Foundation of Protecting Rights
Violations of the Labor Standards Act often occur from the employer’s unilateral position of advantage.
However, by understanding the relevant statutes and procedures and securing evidence thoroughly, a worker can protect his or her rights even on his or her own.
Contracts, pay statements, and attendance records can become key evidence in a dispute at any time, so it is advisable to gather them little by little even before a dispute arises, and if a questionable situation arises, to promptly use resources such as the Ministry of Employment and Labor, the Labor Relations Commission, and consultation with a legal professional to protect one’s rights.
Employers, regardless of the size of the workplace, also need to put in place basic systems for labor management and to conduct periodic legal reviews.
If you need a consultation with an attorney regarding the Labor Standards Act, please book a consultation with a labor attorney in our firm’s Labor and Industrial Accident Group.
We will form a task force of labor attorneys and labor consultants to respond promptly to matters involving violations of the Labor Standards Act.
