The Republic of South Korea has made great efforts to attain economic strength. The country has seen a major transformation from the old recipient of foreign aid to a hub of technological innovation and donors in the present times (Kim & Bae, 2017). Growth and development in South Korea are expected to remain moderate because of the inflexible labor, an aging population, and its relatively developed economy. This paper aims at discussing, in brief, the labor practices in South Korea and the strengths and shortcomings of these practices for Chapman Auto Parts Manufacturers who are interested in opening a company in South Korea.
South Korea reviews the minimum wage on annual basis. In 2017, the labor and business put the minimum wage at about 5.50 Dollars per hour which was an increment of about 7.3% from the previous year (Kim & Bae, 2017). The Labor Standard Act of South Korea provides a higher wage of 50% for any overtime. Non-regular workers like casuals and contracts account for the largest portion of the workforce, especially where the labor force is intensive such as the shipbuilding and automotive industries. For full time or regular employees, the legislation directs that such employees should have employment insurance, industrial accident compensation insurance, national medical insurance, participation in the pension system through subsidies from the employers (Yang, & Torneo, 2016). These benefits are however not granted to the non-regular employees.
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There are no policies which prevent the employers from hiring non-nationals. In 2004, the government put in place a program known as Employment Permit to protect the rights of the non-national workers. The legislation allows the employers to recruit a specific number of foreign workers from countries with which South Korea shares bilateral labor agreements. The advantage of this legislation is that it allows the employers to fetch highly skilled labor and experts from foreign countries.
Foreign companies operating under EPZ are exempted from some labor regulations. The foreign-based companies which operate in the Free Economic Zones are flexible enough to employ non-regular employees in many sectors on a contract basis (Yang & Torneo, 2016). The labor laws provide employees with the freedom to freely associate and for private workers and public servants to form unions. The Labor Relations Adjustment Act and the Trade Union gives the right to collective action and collective bargain allowing workers to freely exercise these rights.
References
Kim, D. O., & Bae, J. (2017). Employment relations and HRM in South Korea . Routledge.
Yang, S. B., & Torneo, A. R. (2016). Government performance management and evaluation in South Korea: History and current practices. Public Performance & Management Review , 39 (2), 279-296.
