Practice Areas
HR and Labor Compliance
HR and labor compliance refers to the activity of managing a company so that it observes the laws and internal rules relating to human resources and labor, while at the same time operating in accordance with ethical standards.
1. HR and Labor Compliance | Concept

HR and labor compliance refers to a system for managing a company so that it observes the laws and internal rules relating to human resources and labor.
Based on relevant statutes such as the Labor Standards Act, the Act on the Employment Promotion and Vocational Rehabilitation of Persons with Disabilities, and the Fair Hiring Procedure Act, a company systematically manages its compliance matters, and this functions as a procedure necessary for protecting workers' rights and preventing legal disputes for the company.
If this compliance is not observed, legal problems may arise across HR matters as a whole, including hiring, employment contracts, and wages, and where necessary, measures such as administrative sanctions or the imposition of administrative fines by the Ministry of Employment and Labor may follow.
The Need for Management
HR and labor compliance helps a company operate its internal HR management processes systematically, and manage its decision-making and procedures transparently and fairly.
Through this, a company can prevent internal disputes and operational errors that may arise across HR matters as a whole, including hiring, evaluation, wages, and working hours.
Continuous management and review also play an important role in improving a company's credibility and building a healthy organizational culture.
2. HR and Labor Compliance | Scope of Application
HR and labor compliance aims at observance of the law and prevention of risk at every stage of an organization's HR management.
Recruitment and Hiring Stage
HR and labor compliance applies from the stage of recruiting and hiring workers.
A company should observe the following matters to prevent legal risks that may arise during the hiring process.
② Preventing unfair discrimination (gender, age, place of origin, education, and the like)
③ Complying with the Fair Hiring Procedure Act (fair hiring, protection of personal information, document management)
Management at the Pre-Employment-Contract Stage
Compliance is also necessary at the stage before an employment contract is concluded.
A company should review whether wages are paid and whether an employment relationship is formed while a prospective hire performs work, and prevent future disputes and legal risks by assessing the substance of each type of work arrangement.
The specific items are as follows.
② Reviewing whether wages are paid
③ Assessing the substance of intern, probationary, and trainee workers
Working Hours and Work Systems
Whether working hours and work systems are observed is a matter that a company must manage.
To review observance of statutory working hours, overtime work, and rest periods, as well as the operation of work systems, a company can manage these through the following items.
② Managing overtime work and rest periods
③ Confirming the operation of flexible and elastic work systems
④ Managing work instructions outside working hours and the related allowances
Management of Wages and Severance Pay
The calculation and payment of wages and the method of accruing severance pay are important legal risk factors for a company.
A company should review whether a comprehensive wage system applies and the record of remuneration paid relative to actual working hours, and confirm whether severance pay is calculated in accordance with labor law standards.
Through this, a company can prevent the occurrence of unexpected contingent liabilities.
Internal Controls and Review Across HR as a Whole
Finally, HR and labor compliance is realized through control and review across HR as a whole within the organization.
It manages decision-making processes such as hiring, evaluation, compensation, and promotion transparently and fairly, and through regular review and monitoring, it minimizes internal disputes and operational errors and contributes to the organization's credibility and the building of a healthy organizational culture.
3. HR and Labor Compliance | Management Framework and Method of Operation

HR and labor compliance aims to review observance of the law on a regular basis and to put in place an internal control framework covering the HR operation process as a whole.
By operating this systematically, a company can reduce the possibility of disputes and secure a foundation of trust within the organization and a basis for sustainable management.
Establishing a Management Framework
HR and labor compliance should be built systematically on the basis of relevant statutes, internal rules, and ethical standards.
If a framework based on statutes and internal rules is established, the risk of disputes such as discrimination or unfair HR decisions that may arise in the HR decision-making process can be prevented.
In addition, clearly distinguishing the responsible departments and the scope of their responsibilities can reduce internal conflict and delays in decision-making that arise when responsibility is unclear.
Procedure and Operational Management
The HR procedures at each stage, such as hiring, employment contracts, working hours, wages, and retirement, are key segments where a company's legal risk is concentrated.
If these procedures are reviewed on a regular basis and amendments to statutes are reflected immediately, administrative sanctions by the labor office or disputes with workers can be prevented in advance.
In addition, transparent management of HR records and the improvement of unreasonable practices reduce internal grievance and reporting risks, and have the effect of strengthening the foundation of trust within the organization.
Monitoring and Internal Controls
The effectiveness of compliance depends on continuous monitoring after it is put into operation.
Regular internal audits and reviews are not a mere formality, but serve as an alert system that can detect signs of a legal violation early and respond before a problem spreads.
Immediate correction of violations and a process to prevent recurrence become key mechanisms that protect both a company's credibility and its legal stability.
Training and Communication
Regular training should be carried out so that management, HR personnel, and general employees can all fully understand the statutes and internal rules.
Training should be structured to suit job rank and the nature of the work, and should focus on content that can be applied in actual workplace settings.
If regular and systematic training is provided from management down to field employees, unnecessary disputes, disciplinary actions, and reputational risks arising from rule violations can be prevented in advance.
In particular, if training is structured around practical work, members come to naturally practice law-abiding conduct in their daily work, with the effect that compliance becomes embedded in the corporate culture.
Risk Management and Reporting
Potential legal and operational risks should be identified in advance, and measures to respond to them should be prepared.
Only when such preparation is in place can a prompt reporting procedure be activated and the spread of harm be minimized when a risk actually materializes.
A regular risk reporting system should also support management in making strategic decisions on that basis.
4. HR and Labor Compliance | Mergers and Acquisitions (M&A)
HR and labor compliance plays a central role not only in day-to-day HR operations but also in organizational restructuring and mergers and acquisitions (M&A).
When a company pursues a merger or acquisition, it does not simply review assets and contractual relationships. How the rights and working conditions of existing employees will be carried over and protected emerges as an important legal issue.
If a sound framework is in place, issues such as disadvantageous changes to working conditions, conflicts with collective agreements, and discrimination that may arise during the merger can be prevented in advance.
HR and Labor Risk Management
If a company carries out workforce reassignment or restructuring to improve organizational efficiency after a merger or acquisition, a failure to establish legitimate grounds and procedures may lead to serious legal risks such as unfair dismissal, claims for damages, and reputational harm.
Accordingly, a company should systematically manage measures such as the following within its HR and labor compliance framework.
· Establishing reasonable compensation standards, among others
Such a management framework goes beyond short-term dispute prevention. It functions as a core mechanism that allows the organization to integrate stably after the merger and to maintain a sustainable employment environment.
5. HR and Labor Compliance | Checklist

HR and labor compliance includes the items a company should review in order to prevent legal risks and to ensure fair HR operations.
It is advisable to review and manage the following matters periodically, so as to ensure compliance with regulations, prevent HR risks, and secure transparency and fairness in organizational operations.
▷ Establishing a management system for employment contracts
▷ Reviewing the management of working hours
▷ Confirming the legality of the wage system
▷ Managing severance pay and dismissal procedures
▷ Establishing a system to prevent discrimination and harassment
▷ Personal information and HR records
▷ Operating an internal control and review system
▷ Establishing a risk response and reporting system
If You Need Legal Counsel
To prevent the legal and operational risks that may arise across HR and labor management, legal counsel and systematic review play a key role.
Our law firm brings together a collaborative team of various professionals, including corporate attorneys with extensive experience in labor law and HR and labor management, as well as labor consultants and HR and labor advisors.
Through this, we can provide practical and effective solutions for HR and labor compliance as a whole, including recruitment and employment contract management, wage and working hour compliance, and review of internal control systems.
We invite you to carry out systematic HR and labor compliance review and risk management together with a 🔗corporate attorney at Daeryun Law Firm.
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