JIPYONG LLC

Introduction

Despite economic uncertainties and political turbulences in the world, Korea’s growing labor market still appeals to foreign employers as an attractive destination for business.  Korea’s employment rate reached a record-high of 69.5% in 2024, with the number of employed persons projected to grow by nearly 120,000 this year.¹  In this thriving economy, the Korean government’s amendments to different sectors of the Korean labor laws reflect a strategic move to further instigate this growth.  As a foreign employer, it is therefore crucial to stay informed of the most recent updates to the labor laws in navigating the Korean legal landscape.


General Changes

Among the immediate changes effective this January, the minimum wage for 2025 has been raised, surpassing the 10,000 Korean Won threshold for the first time.  While this milestone holds symbolic significance, it also underscores the challenges of Korea’s labor market, as the increase is a modest 1.7%—the second-lowest rate of growth since 1990.²  Considering that the lowest increase on record is 1.5%, likely due to COVID-19 during the years 2020 and 2021, the 2025 wage increase signals a careful balancing act between promoting worker welfare and minimizing the financial burden on employers.  Additionally, the senior employment extension subsidy, which was previously provided for businesses with fewer than 300 regular employees who either abolished or extended the retirement age to 60 or older for at least one year, has been abolished due to the recent amendment of the Enforcement Decree of the Employment Insurance Act.³  This strategic shift appears to signal the government’s intention to reallocate resources toward enhancing working conditions for the core working-age population—those aged 15 to 45.  As a part of this focus, and to address Korea’s persistently low fertility rate, the government has significantly expanded the scope of childcare, maternity, and paternity leave benefits.  These measures reflect a clear effort to create labor conditions more conducive to supporting pregnancy and childbirth, with single-parent employees receiving added financial support during their leave.


Key Changes in Parental Leave Policies

In the coming months, new provisions under the Sexuality Equality Employment Act will take effect, including the ability to apply simultaneously for maternity and childcare leave (effective from Jan. 1^st),⁴ extended maternity leave for premature births⁵ and expanded reduced working hours for pregnant employees (effective from Feb. 23^rd).⁶  These changes signal a significant shift in Korea’s approach to work-life balance, particularly for working parents.  By implementing these provisions, the government seeks to alleviate both the financial and emotional burdens on parents, while promoting a more inclusive workforce.  The aim is to retain skilled workers—especially women who have historically faced challenges reentering the workforce after childbirth.

Further reforms include extended paternity leave of the spouse,⁷ additional paid leave for infertility treatments,⁸ and more flexible parental leave periods.⁹  These amendments reinforce the Korean government’s commitment to reshaping the labor market and better accommodating the needs of modern families.  By aligning workplace policies with the realities of contemporary family life, the government is advancing toward creating a more sustainable and equitable work environment.


Industrial Safety and Wage Penalty Reforms

Industrial safety measures have been significantly strengthened, with new requirements for hazardous equipment (effective from Jun. 25^th),¹⁰ in-plant transport vehicles (effective from Jun. 25^th),¹¹ and protections for employees during extreme weather conditions (effective from Jun. 1^st).¹²  In addition, designation of the Industrial Accident Workers Memorial Day (effective from Jan. 1^st)¹³ and imposing stricter penalties for delayed wages—such as interest on unpaid wages and enhanced sanctions (effective from Oct. 23^rd)¹⁴—underscore the government’s drive to foster a safer and more equitable workplace.  These enhancements not only aim to mitigate physical risks in industries with high accident rates but also ensure timely compensation for workers, reinforcing financial equity within the workforce.

The inclusion of specific protections for extreme weather conditions addresses rising concerns about climate-related risks to workers, such as heatwaves and cold waves.  By strengthening both preventive safety measures and corrective wage penalties, the government is showing its commitment to protecting workers’ well-being, ensuring fair compensation, and promoting long-term employment stability.  These updates highlight the importance of foreign employers understanding and complying with Korea’s evolving labor regulations to sustain a productive and secure working environment.


Conclusion

The recent labor law updates in Korea reflect the government’s strategic response to both economic and social challenges, particularly in fostering a more inclusive and equitable workforce.  These changes emphasize work-life balance, industrial safety, and timely compensation—all essential elements for creating a stable and thriving labor market.  For foreign employers, understanding and adhering to these updates is crucial to maintaining compliance and ensuring long-term success in the Korean market.  To navigate these evolving laws and their impact on your business operations, seeking professional legal advice is highly recommended.

[Link to Korean Newsletter]