The new administration moves to expand labour law coverage

At a glance

• The new administration has announced its commitment to fostering a labour environment that guarantees equal rights and ensures fair compensation for all working individuals.
• The new administration plans to establish a legal foundation for the rights of all 'working persons' by enacting the 'Framework Act for Working Persons' (Framework Act).
• The new administration is also reviewing the introduction of a 'presumption of employee status' principle into the Labour Standards Act (LSA).
• Legislative and enforcement actions are expected to intensify, with the National Assembly debating proposed labour policies and the Ministry of Employment and Labor (MOEL) targeting businesses that misuse freelancer classifications through tax data analysis and industry-specific inspections.
• Businesses should prepare for significant operational impacts, as these policies could reshape contractual relationships and increase legal scrutiny, especially in sectors heavily reliant on freelancers.

This article has been reproduced with the permission of the authors Weon Jung Kim, Ki Young Kim, Paul Cho, Beom-Kon Cho, Jung-Lae Lee and Hoin Lee at Kim & Chang. 

The new administration has announced its commitment to fostering a labour environment that guarantees equal rights and ensures fair compensation for all working individuals. In line with this vision, the administration is pursuing significant legislative changes, including: (1) the enactment of the Framework Act to protect individuals not clearly covered by the LSA such as special-type employment workers (ie, independent contractors) and platform workers; and (2) an amendment to the LSA to introduce the concept of 'presumption of employee status'.

Enactment of the Framework Act

The new administration plans to establish a legal foundation for the rights of all 'working persons' by enacting the Framework Act. This law aims to guarantee and promote the rights of any individual who personally works for another person in exchange for remuneration, regardless of their formal employment status or type of contract.

The Framework Act is expected to codify several key rights:

• The right to work in a safe environment.
• The right to be free from discrimination and harassment.
• The right to fair compensation.
• The right to rest.
• The right to social security.
• The right to support for maternity protection, childcare, and work-life balance.

It is also anticipated that the government’s duty to uphold these rights will be defined through more specific legislation.

If the Framework Act is passed, individuals who were previously not protected because they fell outside the scope of the LSA will gain recognised legal rights. On the other hand, businesses will face new corresponding obligations.

Amendment of the LSA to regulate misclassification

The new administration is also reviewing the introduction of a 'presumption of employee status' principle into the LSA to prevent companies from circumventing employer responsibilities by misclassifying employees through sham or 'fake' freelancer contracts.

Under this system, any individual providing services to a company would legally be presumed to be an employee. The burden of proof would lie with the company to demonstrate with clear evidence that the individual is not an employee. If the company fails to rebut this presumption, the individual will be deemed an employee, and the LSA will apply in its entirety.

Further, the administration has pledged to legislate the principle of 'equal pay for equal work' to promote a fair labour market and eliminate discrimination against non-regular workers. Legislative discussions are expected to advance this principle, with a related bill already introduced as the 'Partial Amendment Bill to the Labour Standards Act' (Bill No. 2207612, proposed by Representative Lee Soo-jin on 17 January 2025). This bill seeks to add 'employment type' to the prohibited grounds for discrimination under Article 6 of the LSA and establish a new Article 6-2 to explicitly codify the principle of 'equal pay for equal work'.

Expected trends in the second half of 2025

As these proposed policies require legislative action, active discussions and debates are anticipated in the National Assembly.

Meanwhile, on the enforcement front, the Minister of the MOEL has declared that the 'wrongful practice of intentionally evading labour laws must be rectified'. In line with this goal, the MOEL plans to use national tax data to identify businesses that utilize an unusually large number of freelancers, conduct concentrated and targeted labour inspections on industries known for utilising sham freelancers, and pursue immediate judicial action in cases of deliberate misclassification. As such targeted labour inspections are currently underway for broadcasting companies, businesses that rely heavily on freelancers can expect similar targeted inspections throughout the second half of 2025.

The aforementioned proposed labour policies stand to fundamentally reshape existing contractual relationships between companies and workers, with significant impact on contract fulfilment and overall business operations. It is therefore crucial for businesses to closely monitor both legislative developments and government enforcement plans to prepare their response.