Monday, June 30, 2008

Temporary Workers in the Korean Workplace and Labor Law

I found this article discussing Korean labor law and Temp employees. In Korea, many work as temporary employees for two years. Then they must leave. Most never are hired as regular staff. ( Less than 5% get hired).

In the office the temporary staffers are usually young women hoping to get into college or taking evening classes. They are always studying :) Other plan to marry and raise a family vs a career path. This group work for two or three firms ( 2 years with each firm), then marry. Most K offices have a number of the these Temps, which come and go.

Years ago these Temps were the only women in the Korean corporate world. In contrast, today, more and more women are taking white collar jobs as full time team members.

Some details in K media
Exactly one year ago on July 1, a law aimed at protecting irregular workers, “The Contractual and Part-time Worker Protection Act,” came into force. After six years of controversy, the law was implemented to require employers to hire part-time, contract workers as regular, full-time employees after two years of employment. The law was also aimed at eliminating discrimination against irregular workers.

As a result, some irregular workers were hired on a contractual basis for an indefinite period, under conditions similar to those for regular employees. However, a significant number of companies fired their irregular workers before the two-year period was up, so they would not have to hire them as regular employees, and job vacancies were filled by temporary workers from outsourcing companies. Under the law, workers in “indirect employment” situations, such as the irregular workers at E-Land, are particularly vulnerable. Last year, E-Land fired its irregular workers and forced them into being hired by outsourcing companies as temporary workers. At this time, irregular workers receive wages that are 51 percent lower than those of regular workers, compared with 52.4 percent a year earlier.

In a recent survey conducted by the Ministry of Labor, 20 percent of the companies surveyed said they had changed the status of their irregular workers and now employ them as outsourced labor. Like E-Land, which was accused last year of firing its irregular workers en masse and rehiring them as temporary employees in advance of the implementation of the new labor law, many employers are evading the law by exploiting this loophole.

One of the problems is that there is no official data about the number of workers in indirect employment situations, those who are hired by outsourcing firms or in-company subcontractors. Labor groups estimate that at least 1.6 million workers are currently in situations such as these. A survey by the National Statistical Office showed that the number of contract workers has fallen by 320,000 people over the past year, while the number of workers who will not see their employment contracts renewed and the number of outsourced workers rose by 246,000 and 33,000 people, respectively. The wages of these workers are 40-60 percent of the wages paid to regular workers.

The hourly wage of one 36-year-old worker, who is only identified by the Korean alphabet letter “ㅈ” and works for an in-company subcontractor of Donghee Auto, is 3,770 won (US$3.6), which is equivalent to the nation’s minimum wage. Donghee Auto, located in Seosan, South Chungcheong Province, supplies parts for Morning compact cars as a subcontractor of Kia Motors. At the Donghee Auto plant, none of the workers are hired directly by Kia Motors. Instead, its 850 workers are hired under one-year contracts administered by 13 different subcontractors. Meanwhile, the people working for an in-company subcontractor at Hyundai Motor’s Asan plant have not been reinstated, despite a ruling of the illegal use of outsourced workers, and are victims of the indirect employment system.

The trend toward indirect employment, which is common in the automobile and shipbuilding industries, is spreading to the information-technology and public sectors. A 30-year-old worker, who is only identified by the Korean alphabet letter “ㅇ” and who works in an IT job for a big company, has been hired to work for the company by three different outsourcing companies in the past year. The initial contract period was four months, two months and 15 days. After a first-tier subcontractor continued to change its subcontractors, the worker was hired again by two other subcontractors. Throughout, the 30-year-old worker’s job remained unchanged, though the name of contractors changed each time he was hired.
Kim Yu-seon, the head of the Korea Labor and Society Institute, said, “The problem is there is no fact-finding survey about wages and working conditions for workers in indirect employment, the most representative kind of non-regular employment. Social regulations against indirect employment that are not covered by the irregular worker protection law need to be reinforced.”

Don Southerton


  1. Anonymous9:02 PM

    Thank you very much for this article. it'd surely help our study about indirectly hired employees. thanks again

  2. Anonymous3:45 AM

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