South Korean labor policy and worker protections

The South Korean government has introduced several labor-related reforms and protections. Initially, the administration announced an overhaul of the unemployment benefit system designed to ensure fiscal sustainability and incentivize reemployment. This reform includes shifting the weekly payment standard from seven days to six, extending the total duration of benefits to maintain payout levels, and linking the maximum benefit cap to 103% of the minimum benefit floor to address the “reversal phenomenon.” Additionally, eligibility criteria for early reemployment allowances were tightened to reduce inefficiencies.

Following these changes, the government announced new guidelines specifically targeting subcontracted workers in the public sector. Effective September 9, these measures aim to improve working conditions and prevent exploitation by mandating that primary contractors perform tasks directly, effectively banning secondary subcontracting except in exceptional cases requiring prior approval from a specialized committee. To ensure job stability, the guidelines mandate a minimum contract period of two years and require employment succession when contractors change.

To prevent wage exploitation, the policy requires wages to be calculated based on market labor rates rather than the minimum wage, with labor costs managed through dedicated accounts to prevent misappropriation. While the government intends to enforce these rules through management evaluations and bidding restrictions, the Korean Confederation of Trade Unions (KCTU) has criticized the measures. The KCTU argues that the guidelines fall short of a fundamental solution, asserting that the government should focus on “direct public management” rather than merely regulating private outsourcing to ensure true labor rights and service quality.