[Editorial] Law to Protect 'Workers Outside the Scope of Rights' Must Heed Foreign Failures

The Ministry of Employment and Labor (MOEL) announced on the 20th that it will enact the Basic Rights of Working People Act to protect workers such as freelancers, special types of workers, and platform workers who are not currently covered by the Labor Standards Act. The aim is to create a second Labor Standards Act that protects workers outside the scope of existing rights, supplementing the current law, which assumes only wage workers under the direction of an employer at businesses with five or more employees.
At the same time, the government has also signaled that it will amend the Labor Standards Act to introduce a presumption of employee status system that, in principle, regards all working people as employees. When disputes arise, the employee status of special types of workers and freelancers would first be recognized and supported, and only denied if the employer successfully rebuts the presumption. However, this burden of proof on employers would be limited to civil cases such as claims for severance pay or suits to confirm the invalidity of dismissal, and would not apply to criminal cases involving violations of labor-related laws.
The government is pursuing a second Labor Standards Act and the presumption of employee status system because it believes there is a large group of workers who are not protected by the legal safety net. As of 2024, there are 8.69 million non-wage workers, including Platform Workers and freelancers. Many of them are in effect employees, yet they sign freelance contracts that only withhold 3.3% in business income tax, leaving them outside the scope of labor laws.
If workers in occupations created amid the breakdown of traditional employment relationships due to technological progress and social change are being left in a legal blind spot, it is undeniably a social problem the state must address. However, companies are concerned that the new system could sharply increase labor costs and management uncertainty.
Currently, special types of workers and freelancers are classified as self-employed, so they must prove on their own that they are employees if they wish to claim wages or severance pay. Once the presumption of employee status system is introduced, freelancers and others would become entitled to the minimum wage, various allowances, and paid annual leave that apply to wage workers. Regulations such as the 52-hour workweek could be extended to freelancers, potentially reducing flexible jobs that had been operated with greater leeway. Stronger ex officio investigations by labor inspectors could also excessively expose internal corporate information during disputes, adding to the burden on businesses.
Above all, the presumption of employee status system is an experimental framework that has few precedents worldwide. Countries have been cautious because the broader impact of such a system remains uncertain. For example, in 2021 Spain approved an emergency order that presumed food delivery riders at companies such as Glovo and Deliveroo to be employees. Afterwards, Deliveroo dismissed thousands of riders and completely withdrew from the Spanish market. If a law intended to protect workers' rights ends up placing excessive pressure on employers and thereby leads to job losses, both labor and management will suffer irreparable damage.
If the new system raises employers' costs, fees and prices could increase in the short term, and service areas or operating hours may be reduced. This is not just an issue between labor and management; it is a matter that could significantly affect consumers as well.
Even so, MOEL is rushing to complete the legislation by Labor Day on May 1. No matter how labor-friendly a government may be, it should not push through such a sensitive system in a race against time. It must carefully analyze the broader impact on society and prepare complementary measures. A prudent approach is needed that protects vulnerable workers while also safeguarding jobs.