Guidelines leave key thresholds unclear, raising uncertainty over when firms must bargain as de facto employers

South Korea’s controversial Yellow Envelope Act took effect earlier this month, and in just three weeks, around 700 union demands have been filed asking primary contractors to come to the negotiation table.

Firms and public institutions with subcontractors, regardless of sector, are now rushing to assess what it means to be considered a “de facto employer (실질적 사용자)” under the new law. Both businesses and unions have called for clarification, reflecting the significant room for interpretation embedded in the law.

South Korea’s controversial Yellow Envelope Act took effect earlier this month, and in just three weeks, around 700 union demands have been filed asking primary contractors to come to the negotiation table.

Firms and public institutions with subcontractors, regardless of sector, are now rushing to assess what it means to be considered a “de facto employer (실질적 사용자)” under the new law. Both businesses and unions have called for clarification, reflecting the significant room for interpretation embedded in the law.

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