Early Yellow Envelope rulings reveal fuzzy definitions of ‘substantive control’

Business groups warn Yellow Envelope Law could hurt investment in South Korea
April 27, 2026

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Early Yellow Envelope rulings reveal fuzzy definitions of ‘substantive control’

South Korea’s regional labor commissions have issued decisions on dozens of Yellow Envelope Act employer status cases since the law took effect seven weeks ago.

When the amended labor union law took effect on March 10, one of the things it did was to upend the assumption that only the company that directly signed the employment contract had bargaining obligations, and that managerial decisions such as layoffs were beyond the scope of what workers could seek to negotiate.

Under the revised law, a party that substantially and concretely dominates or determines the working conditions of subcontracted workers can now be

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