1 Act on Employment of Foreign Workers, and Amendment  The name of the relevant law is the “Act on Employment of Foreign Workers”.  Defined as the “Act” herein.  The Act was amended on October 9,  Defined as the “Amendment” herein.

2 Organization of the Act  Chapter 1 – General Provisions  Chapter 2 – Employment Procedures for Foreign Workers  Chapter 3 – Management of Foreign Workers  Chapter 4 – Protection of Foreign Workers  Chapter 5 – Supplementary Provisions  Chapter 6 – Penal Provisions

3 Chapter 1 – General Provisions  Chapter 1 of the Act defines the purpose and the scope of application.  Article 1 (Purpose):  Achieving the smooth supply and demand of manpower, and promoting the balanced development of the national economy by receiving and managing foreign workers in a systematic way.

4 Chapter 1 – General Provisions  Characteristics of the policy to receive foreign workers:  Preventing permanent immigration by prohibiting family reunions and only allowing short-term stays (less than 5 years).

5 Chapter 1 – General Provisions  Scope of application:  Foreign workers and businesses that are employing or will employ foreign workers.  Other matters not prescribed in the Act concerning the entry, stay, departure (etc.) of foreign workers shall be governed by the Immigration Control Act.

6 Chapter 2 – Employment Procedures for Foreign Workers  By the government:  Signing of an MOU between the sending country and Korea (Article 4).  Preparation of job seekers’ roster for the Korean government, based on selection of qualified job seekers in the sending country (Article 7).

7 Chapter 2 – Employment Procedures for Foreign Workers  By the employer:  Efforts to employ native Korean workers (Article 6). In order to protect native Korean workers, employers can only apply for employment permits to hire foreign workers after submitting an application to seek employment of native workers.  Application for employment permit (Article 8).  Issuance of employment permit. The head of the Employment Center issues an employment permit to hire foreign workers bearing the name of the selected foreign worker.  Signing of labor contract (Article 9).  Application for Certificate of Confirmation of Visa Issuance (Article 10). Equivalent to an employer’s invitation.

8 Chapter 2 – Employment Procedures for Foreign Workers  By the employee:  Entry and employment training for foreign workers (Article 11). Application for a visa with a Certificate of Confirmation of Visa Issuance issued to the employer. Entry into Korea after the visa is issued. Registration as a foreigner within 90 days after entry into Korea (Article 31 of the Immigration Control Act).  Placement, employment, and support for the stay.

9 Chapter 3 – Management of Foreign Workers  The Act also contains provisions such as:  Requirement for departure guarantee insurance in order to provide severance pay (Article 13).  Requirement for health insurance (Article 14).  Employment period: 3 years (+2 years) (Article 18)(1).  Cancellation of employment permit or special employment permit of foreign workers (Article 19).  Restrictions on employment of foreign workers (Article 20).

10 Chapter 4 – Protection of Foreign Workers  Prohibition against discrimination (Article 22).  Requirement for payment guarantee insurance for foreign workers in case of overdue wages, and casualty insurance in case of illness or death (Article 23).  Permission for change of business or workplace (Article 25).  The reasons and the frequency (3 times) are strictly limited.

11 Chapter 5 – Supplementary Provisions  No discussion today.

12 Chapter 6 – Penal Provisions  Fines or penalties for employers’ violations of their obligations under the Act.  Employers who obstruct requests for change of business or workplace by a foreign worker (Article 29):  Punishable by imprisonment for up to 1 year or a fine not exceeding KRW 10 million.  Employers who fail to take out departure guarantee insurance or casualty insurance (Article 30):  Punishable by a fine not exceeding KRW 5 million.

13 Amendment – Major Contents  Period of employment contract (Article 9)(1).  Period of employment activity:  Exemption from departure obligations (Article 18- 2)(2)  Expansion of reasons for change of business or workplace and the number of changes possible (Article 25)(2).

14 Amendment – Enforcement Date  In general, the Amendment will be enforced from April 10, 2010 (6 months from the announcement date).  However, some articles such as Re-employment (Article 18-2) and Workplace Changes (Article 25) will be effective from December 10, 2009 (2 months from the announcement date).

15 Amendment – Period of Employment Contract Pre-Amendment (Article 9)Post-Amendment (Article 9)  Period of employment contract shall not exceed 1 year.  Any period up to 3 years.  In case of exemption from departure obligations due to application for re- employment, any period up to 2 years.

16 Amendment – Purpose and Results  Purpose of amending Article 9:  To reduce anxiety of employees due to short employment periods (less than 1 year) and to provide flexibility for employers.  Results – problems:  Amendment re-introduces the danger of forced labor, since the purpose of having less than 1-year employment periods was to prevent forced labor.  Our proposal: if a contract period exceeds 1 year, employees should reasonably have the right to cancel the contract – even when the contract is still valid.

17 Amendment – Re-Employment Pre-Amendment (Article 18(2)) Post-Amendment (Article 18(2))  If the 3-year employment period expires, the foreign worker shall depart from Korea and may re-enter after 6 months.  However, if an employer requests before the departure, the 6-month period can be shortened (usually, 1 month).  If an employer requests the re- employment of a foreign worker upon the expiration of the 3-year employment period, the foreign worker shall be granted an extension of up to 2 years – and exempted from departure obligations.

18 Amendment – Re-Employment  Enforcement period:  Amended provisions regarding re-employment will be effective from December 10, 2009, when “the employer applies for the re-employment of the foreign worker” (Addenda Article 3).  Example 1: Employer applies for re-employment on December 8, 2009 for a foreign worker whose employment period expires on January 15, Foreign worker must depart for 6 months (in practice, 1 month) and re- enter Korea under the old provisions. Not subject to the Amendment, therefore employment is possible for up to 3 years after re-entry.  Example 2: Employer applies for re-employment on December 10, 2009 for a foreign worker whose employment period expires on January 15, Subject to the Amendment, therefore upon being issued a re- employment permit, the foreign worker can continue working in the same workplace without departure.

19 Amendment – Re-Employment  Frequency of re-employment:  Permitted only once.  In case of re-employment, the foreign worker shall be granted an extension of employment period of up to 2 years.  Therefore, a foreign worker can be employed for a maximum of 3 years after the initial entry + reemployed and have his employment period extended for up to 2 years, for a maximum total employment period of 5 years.

20 Amendment – Purpose and Results  Purpose of amending re-employment provisions:  Providing convenience to employers and workers.  Results – problems:  The procedure is dependent on the present/former employer’s request, enabling employers to have a full control over the re-employment process. This can cause undue control over workers, and unfair practices of employers. Our proposal: it seems more reasonable to also grant foreign workers an exemption to departure obligations where they have signed a labor contract with a new employer (and not just the same employer) before the expiration of their current period of employment.

21 Amendment – Reasons for Changes of Business or Workplace Pre-Amendment (Article 25) – Reasons  Changes are possible where:  The employer intends to cancel a labor contract during the contract period for justifiable reasons, or refuses to renew the contract after its expiration.  It is deemed impossible to continue working in the current workplace due to business suspension, closure, or other reasons not attributable to the worker.

22 Amendment – Reasons for Changes of Business or Workplace Pre-Amendment (Article 25) – Reasons  Changes are also possible where the employment permit is canceled pursuant to Article 19(1), or any restriction is imposed on the employment of foreign workers pursuant to Article 20(1).  Article 19(1):  The employer breaches the wage payment conditions or other working conditions agreed upon before the entry of the foreign worker.  It is deemed impossible to continue the employment contract due to the employer’s back-pay obligations or other violations of applicable employment laws.

23 Amendment – Reasons for Changes of Business or Workplace Pre-Amendment (Article 25) – Reasons  Other matters prescribed by the Presidential Decree:  The Presidential Decree (a regulation subordinate to the Act) states that a foreign worker can be inappropriate for work in a certain business or a certain workplace due to injury (etc.), but is able to work in other businesses or workplaces.

24 Amendment – Reasons for Changes of Business or Workplace Post-Amendment (Article 25) – Reasons  Change are also possible where working conditions are completely different from the terms of the labor contract, or employment relations are deemed impossible to maintain according to social norms, or due to the employer’s unfair treatment, including a violation of working conditions.

25 Amendment – Purpose and Results  Purpose of amending Article 25:  To protect workers’ rights by expanding the scope of reasons for changing the business or workplace.  Before the Amendment, only exceptional cases were allowed, such as: cancellation of the labor contract by employers; refusal to renew the labor contract; and continuance of work that becomes impossible due to reasons attributable to the worker.  This can cause undue control over workers, and unfair practices of employers.  Results – problems:  Despite the expanded scope, the chances for changing business or workplace are still too narrow.  Our proposal: it seems necessary to add the following cases as valid reasons for changing the worker’s business or workplace: When the foreign worker cancels or refuses to renew the labor contract for justifiable reasons; or When human rights abuses occur.

26 Amendment – Number of Changes of Business or Workplace  Limitations on the number of changes of business or workplace:  Permissible 3 times within 3 years after initial entry. it is deemed impossible to continue to work in the current workplace due to business suspension, closure, and other reasons not attributable to the worker – see Slide 21; also, see Slide 22) However, 1 additional chance (total, 4) is possible if the change is made based on the reasons prescribed the Presidential Decree to the Act (for example, where it is deemed impossible to continue to work in the current workplace due to business suspension, closure, and other reasons not attributable to the worker – see Slide 21; also, see Slide 22).  In the case of re-employment, 2 changes are permitted.

27 Amendment – Number of Changes of Business or Workplace Post-Amendment (Article 25) – (new provision)  New provision:  Changes of business or workplace due to the suspension of business, closure, and other reasons not attributable to the workershall not be counted.  Changes of business or workplace due to the suspension of business, closure, and other reasons not attributable to the worker shall not be counted.

28 Amendment – Purpose and Results  Purpose of adding new provision (to Article 25):  To protect workers’ rights by not counting changes of business or workplace due to the reasons not attributable to workers.  Results – benefits:  The original Act limited the number of changes even in cases which are not attributable to the employees’ fault; however, the Amendment has expanded this.  Results – problems:  Fundamentally speaking, causes for change of business or workplace are still very restrictive – which relates to the fact that restricting the number of changes itself is unreasonable.

29 Amendment – Period for Changes of Business or Workplace Pre-Amendment (Article 25) Post-Amendment (Article 25)  Changes shall be completed within 2 months from submission of application for change.  Changes shall be completed within 3 months from application.  Or, where change is difficult due to problems such as business disaster, illness, pregnancy (etc.), re- employment shall be completed within 3 months from the date such problems are resolved.

30 Insurance for Foreign Workers  Payment Guarantee Insurance (Article 23):  Purpose: in case of non-payment of wages for foreign workers.  Required holders: Any place of business with a maximum capacity of less than 300 workers.  Penalty for failure to hold such insurance (Article 30): Punishable by a fine not exceeding KRW 5 million.

31 Insurance for Foreign Workers  “Return Cost” Insurance (Article 15):  Purpose: in case of insufficient funds for repatriation of foreign workers (i.e. money to return home).  Required holders: All foreign workers.  Penalty for failure to hold such insurance (Article 32): Punishable by a fine not exceeding KRW 5 million.

32 Insurance for Foreign Workers  Casualty Insurance (Article 23):  Purpose: in case of business disasters and sickness other than workplace accidents.  Required holders: All workers.  Penalty for failure to hold such insurance (Article 30): Punishable by a fine not exceeding KRW 5 million.

33 Insurance for Foreign Workers  Statutory Insurance (Insurance required by other Korean laws)  Health Insurance – required.  Accident Insurance – required.  Employment Insurance – discretional.  National Pension Plan – may be payable by foreign workers and if so, may also be recoverable (depending on treaty between Korea and relevant country – for the Philippines, payment is mandatory, but recoverable upon leaving Korea).