ENFORCEMENT DECREE OF THE FRAMEWORK ACT ON LABOR WELFARE

Article 1(Purpose) #

The purpose of this Decree is to prescribe matters mandated by the Framework Act on Labor Welfare and matters necessary for the enforcement thereof.

Article 2 #

Deleted. <Jul. 28, 2014>

Article 3(Institutions Providing Loan Services) #

"Financial companies, etc. specified by Presidential Decree" in Article 12(1)2 of the Framework Act on Labor Welfare (hereinafter referred to as the "Act") means the following financial companies: <Amended on Jan. 6, 2012; Jul. 28, 2014; Oct. 25, 2016; Feb. 17, 2022>

1. NongHyup Bank established under the Agricultural Cooperatives Act;

2. Suhyup Bank under the Fisheries Cooperatives Act;

3. The Korea Development Bank under the Korea Development Bank Act;

4. The Industrial Bank of Korea prescribed in the Industrial Bank of Korea Act;

5. Community credit cooperatives and their federation established under the Community Credit Cooperatives Act;

6. Securities financial companies under the Financial Investment Services and Capital Markets Act.

Article 4(Fees for Credit Guarantee for Employees) #

(1) Guarantee Fees under Article 24 of the Act may be imposed at a differential rate based upon the credit ratings of the persons whose credit is guaranteed, amounts guaranteed, guarantee periods, etc.

(2) Matters necessary for the amounts and collection of guarantee fees under paragraph (1) shall be prescribed by the Minister of Employment and Labor.

Article 5(Entrustment of Exercise of Right to Demand Reimbursement) #

(1) The financial companies, etc. entrusted with the right to demand a reimbursement by the Korea Workers’ Compensation and Welfare Service (hereinafter referred to as the "Welfare Service") under the Industrial Accident Compensation Insurance Act in accordance with Article 26(3) of the Act shall be the institutions providing loan services under Article 12 of the Act and claims collection agencies under subparagraph 10-2 of Article 2 of the Credit Information Use and Protection Act. <Amended on Aug. 4, 2020>

(2) Other necessary matters, such as the entrustment fees to be paid when entrusting the right to demand a reimbursement in accordance with paragraph (1) shall be determined by the Welfare Service with the approval of the Minister of Employment and Labor.

Article 6(Disposition on Deficits) #

(1) The Welfare Service may take a disposition on deficits for any claim where it becomes unable to recover the claim due to any of the following reasons, despite exercising the right to demand a reimbursement in accordance with Article 26(3) of the Act:

1. Where it is impracticable to exercise the right to demand a reimbursement, because the debtor has died, or his or her whereabouts are unknown or finally determined exempted from liabilities in accordance with Articles 566 and 625 of the Debtor Rehabilitation and Bankruptcy Act;

2. Where the debtor has no means to make a reimbursement;

3. Where the extinctive prescription of the right to demand a reimbursement is completed;

4. Where there are no practicable benefits of proceeding with any legal proceeding, because the estimated expense for recovery exceeds the estimated amount recoverable.

(2) To take a disposition on deficits in accordance with paragraph (1), the Welfare Services shall investigate and verify the whereabouts and property of the debtor through a local government, competent tax office, or other relevant administrative agency; provided, this shall not apply where the amount of a claim for reimbursement is less than 100,000 won.

Article 7(Interest in Arrears) #

(1) The highest interest rate (referring to 20/100 of the annual interest rate where the highest interest rate exceeds 20/100 of the annual interest rate) among overdue interest rates on a lone by the relevant financial company at the time when the Welfare Service performs the guarantee debt shall apply to interest in arrears under Article 27 of the Act.

(2) The Minister of Employment and Labor may lower the highest ceiling of the overdue interest rate under paragraph (1), based upon the market interest rate, employment situation, etc.

Article 8(Establishment of Employee Stock Ownership Association) #

(1) The preparatory committee for the incorporation of an employee stock ownership association (hereinafter referred to as "preparatory committee for the incorporation of the association") under Article 33(1) of the Act shall conduct the following affairs:

1. Preparation of draft bylaws;

2. Consultation with the company on the matters prescribed by Ministerial Decree of the Employment and Labor;

3. Holding an inaugural general meeting of an employee stock ownership association (hereinafter referred to as "association");

4. Other affairs necessary for the establishment of the association.

(2) The preparatory committee for the incorporation of the association shall hold an inaugural general meeting of the association, attended by a majority of employees, at which the bylaws of association are to be finally finalized and the executive officers, including the representative, are to be elected.

(3) The preparatory committee for the incorporation of the association shall conclude a contract to entrust management of employee stocks with a trust institution under Article 43(1) of the Act, within three weeks after completing the procedure under paragraph (2).

(4) Within three weeks after concluding a contract to entrust management of employee stocks with a trust institution in accordance with paragraph (3), the preparatory committee for the incorporation of the association shall notify the Minister of Employment and Labor of the fact, attaching a copy of the bylaws of the association under paragraph (1), etc., as prescribed by Ministerial Decree of the Employment and Labor.

(5) The Minister of Employment and Labor may issue a written verification of the fact notified by the preparatory committee for the incorporation of the association in accordance with paragraph (4), as prescribed by Ministerial Decree of the Employment and Labor.

Article 9(Controlled Company) #

A controlled company under Article 34(1)2 of the Act (hereinafter referred to as "controlled company") shall be any of the following entities: <Amended on Apr. 8, 2025>

1. An unlisted company, at least 50/100 of the total number of issued stocks of which are directly owned by the stock company in which the association is established (hereinafter referred to as "company with an employee stock ownership plan");

2. An unlisted company, at least 50/100 of the total number of issued stocks of which are directly owned by an unlisted company under subparagraph 1.

Article 10(Eligibility for Membership of Employee Stock Ownership Association) #

(1) "Minority stockholders specified by Presidential Decree" in the proviso of Article 34(2)2 of the Act means the stockholders who are employees belonging to the relevant company with an employee stock ownership plan, controlled company or contracted company under Article 34(1)2, and own stocks equivalent to 1/100 (referring to 3/100 in the case of the employees belonging to a small and medium business under Article 2(1) of the Framework Act on Small and Medium Business Enterprises) of the total amount of issued stocks, or to 300 million won, whichever is the lesser. In such cases, such amount shall be calculated based on face value. <Amended on Jul. 28, 2014>

(2) "Persons specified by Presidential Decree" in Article 34(2)4 of the Act means the following persons: <Amended on Jun. 27, 2017>

1. The largest stockholder under subparagraph 6a of Article 2 of the Act on Corporate Governance of Financial Companies. In such cases, "financial company" shall be deemed "company";

2. Specially related person of the largest stockholder under Article 3(1)1a through g of the Enforcement Decree of the Act on Corporate Governance of Financial Companies;

3. Daily hire employees under Article 20 of the Enforcement Decree of the Income Tax Act.

Article 11(Content of Bylaws of Association) #

The bylaws of the association under Article 35(2)1 of the Act shall provide for the following matters:

1. Purpose;

2. Name;

3. Location of its principal office and branch offices;

4. Matters concerning executive officers of the association;

5. Matters concerning the methods for exercising voting rights;

6. Matters concerning the creation and use of a fund for employee stock ownership association under Article 36 of the Act (hereinafter referred to as "association fund");

7. Matters concerning the acquisition and allocation of employee stocks of the association;

8. Matters concerning the withdrawal of employee stocks;

9. Matters concerning the disposal of residual property upon dissolution of the association.

Article 12(Holding of General Meeting) #

(1) The representative of the employee stock ownership association shall hold a general meeting at least once every year in accordance with Article 35(4) of the Act; provided, where there is no matter to be resolved upon under Article 35(2) of the Act in the relevant year, public notice of the operational status of the association in accordance with the bylaws may replace holding a general meeting.

(2) Where at least 1/5 of all members of the employee stock ownership association (hereinafter referred to as "association member") demand the holding of a general meeting, by specifying the matters to be referred to the general meeting, the representative of the association shall hold a general meeting within three weeks.

(3) If there is no representative of an association or if the representative of an association fails to hold a general meeting within the period specified in paragraph (2) without good cause, an executive officer prescribed by the rules of the association shall hold such meeting within five days. In such cases, the executive officer shall perform the duties of the chairperson. <Added on Apr. 8, 2025>

(4) If an executive officer liable to hold a general meeting under paragraph (3) fails to do so within the period specified in paragraph (3), a member who has obtained the consent of a majority of all members of the association shall hold the meeting. In such cases, the member shall perform the duties of the chairperson. <Added on Apr. 8, 2025>

(5) Paragraphs (2) through (4) shall apply mutatis mutandis to the convocation of an assembly of delegates under Article 35(3) of the Act. In such cases, "general meeting" shall be construed as "assembly of delegates" and "association members" shall be construed as "delegates". <Amended on Apr. 8, 2025>

Article 13(Composition and Operation of Steering Committee for Employee Stock Ownership Plan) #

(1) A steering committee for the employee stock ownership plan under Article 35(6) of the Act (hereafter in this Article referred to as "steering committee") shall consist of the members representing the company with an employee stock ownership plan and the members representing the association, and shall have at least two but not more than ten members, respectively.

(2) Matters necessary for the organization, operation, etc. of the steering committee shall be determined in consultation between the company with an employee stock ownership plan and the association.

(3) The company with an employee stock ownership plan and the association shall enter into an agreement on the results of consultation to facilitate the matters which undergo consultation in accordance with Article 35(6) of the Act.

Article 14(Operation of Association) #

(1) Where allocating employee stocks in accordance with Articles 36(4), 37, and 38 of the Act or granting employee stock options (hereinafter referred to as "employee stock options") in accordance with Article 39 of the Act, low-income employees and long-serving employees shall be treated preferentially.

(2) The association may preferentially allocate the employee stocks acquired by financial resources under Article 36(1)1 of the Act to any of the following association members, through an agreement with the contributors of such financial resources: <Added on Jan. 19, 2016>

1. Association members who belong to an exemplary long-serving human resources group;

2. Association members who have contributed, or are able to contribute, to the establishment, management, technical innovation, etc. of the company;

3. Other association members who have contributed to enhanced productivity, increased sales revenue, etc. of the company.

(3) In any of the following cases where granting employee stock options in accordance with Article 39 of the Act, employee stock options may be preferentially granted to the relevant association members: <Added on Jul. 28, 2014; Jan. 19, 2016>

1. Case where such grant is intended to promote the lengthy service of exemplary human resources;

2. Case where such association members are contributing or are able to contribute to the establishment, management, technical innovation, etc. of the company;

3. Other cases where such association members have contributed to enhanced productivity, increased sales revenue, etc. of the company; and where the company with an employee stock ownership plan and the employee stock ownership association have consulted with each other in the steering committee for the employee stock ownership plan under Article 13(1).

(4) The fiscal year of the association shall be the same fiscal year as that of the relevant company with an employee stock ownership plan. <Amended on Jul. 28, 2014; Jan. 19, 2016>

Article 15(Treatment of Dividends) #

(1) Dividends (including stock dividends; hereafter the same shall apply in this Article) on the stocks allocated to the accounts of the association members shall be paid to the association members to which such accounts belong.

(2) Dividends on the stocks held in the accounts of the association shall be attributed to the association.

Article 16(Safekeeping or Depository Financial Companies) #

(1) "Financial company, etc. specified by Presidential Decree" in Article 36(2) of the Act means the following:

1. Banks under the Banking Act;

a. Insurance companies under the Insurance Business Act;

3. Securities financial companies under the Financial Investment Services and Capital Markets Act;

4. A mutual savings bank established under the Mutual Savings Banks Act;

5. Other financial companies established in accordance with the relevant Act to conduct depository business.

Article 17(Use of Association Fund) #

(1) When using the association fund in accordance with Article 36(3) of the Act, the association shall use the fund accumulated until the end of the immediately preceding fiscal year (excluding any amount used to pay the refunds and interest of loans under Article 42(1) of the Act) so as to acquire employee stocks within six months after the relevant fiscal year begins; provided, this shall not apply where any ground specified by Ministerial Decree of the Employment and Labor exists, such as the designation of such employee stocks as issues for administration. <Amended on Jan. 19, 2016>

(2) Notwithstanding the main clause of paragraph (1), where the association members enter into an agreement with the association to contribute a certain amount to the association fund for a period of at least one year but not more than three years, and contribute such amount in accordance with the agreement, the association shall use the money (where the company with an employee stock ownership plan enters into an agreement with the association to contribute money together in response to the contribution of the association members, such money shall be included therein) which is contributed in accordance with the agreement to acquire the employee stocks within six months after the beginning of the fiscal year immediately after the fiscal year in which the agreed period ends. <Added on Jan. 19, 2016>

Article 18(Acquisition of Employee Stocks by Association) #

Where the association acquires employee stocks for the association members, it shall endeavor to make such acquisition in the interests of all association members.

Article 19(Allocation of Employee Stocks by Association) #

(1) Where the association intends to allocate the employee stocks acquired in accordance with Article 37 of the Act, it shall comply with the following standards: <Amended on Jul. 2, 2019>

1. The following employee stocks must be allocated to the accounts of the association members immediately after their acquisition:

a. Employee stocks acquired either through contribution to employee stocks by the company, stockholders, etc., or by means of the finances referred to in Article 36(1)1, 2, and 5 of the Act;

b. Employee stocks acquired using the loans which belong to the financial resources referred to in Article 36(1)3 of the Act and are borrowed without entering into an agreement under Article 42(2) of the Act;

c. Employee stocks acquired through capital increase without compensation for the employee stocks allocated to the accounts of the association members;

2. Both the employee stocks must be acquired by means of the loans borrowed by entering into an agreement under Article 42(2) of the Act among the financial resources referred to in Article 36(1)3 of the Act, and the employee stocks acquired through capital increase without compensation for the first-mentioned employee stocks shall be held in the accounts of the association, and if any loan is repaid, the employee stocks equivalent to the repaid amount of the loan shall be immediately allocated to the accounts of the association members;

3. The employee stocks acquired by means of the financial resources referred to in Article 36(1)4 of the Act must be held in the accounts of the association, but, if the loan whose first due date of repayment arrives is repaid, be allocated to the accounts of the association members by adding such employee stocks to the employee stocks equivalent to the repaid amount of the loan.

(2) When allocating the employee stocks acquired by means of the resources referred to in Article 36(1)1 and 5 of the Act, where any association member at the time of the creation of the relevant fund retires before the acquisition date of the employee stocks on any ground specified by Ministerial Decree of the Employment and Labor, such as the reaching of his or her retirement age, the employee stocks shall be allocated to such association members.

Article 19-2(Scope of Preferential Allocation to Members of Employee Stock Ownership Association) #

(1) "Stock-listed corporation specified by Presidential Decree" in Article 38(1) of the Act means a corporation whose stocks are listed on the securities market under Article 176-9(1) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act (hereafter referred to as "securities market" in this Article).

(2) "Securities market specified by Presidential Decree" in Article 38(1) of the Act means the securities market.

[This Article Added on Aug. 27, 2013]

Article 20(Employee Stock Options) #

(1) Where calculating the total limit of the stocks regarding which employee stock options may be granted in accordance with the main clause of Article 39(1) of the Act, the calculation shall be made by including the following numbers of stocks:

1. Number of stocks granted in accordance with the proviso of Article 39(1) of the Act;

2. Number of the stocks to be issued or transferred where exercising employee stock options not exercised as of the resolution date under the main clause of, and the proviso of, Article 39(1) of the Act, among the employee stock options granted before that resolution date.

(2) "Continuous service period specified by Presidential Decree" in Article 39(6) of the Act means one year.

(3) "Period specified be Presidential Decree" in the proviso of Article 39(8) of the Act means three years from the date of acquiring stocks.

(4) A company intending to grant employee stock options (hereinafter referred to as "company granting employee stock options") shall conclude a contract providing for the following matters with the association. In such cases, the association shall keep the relevant contract so that the association members can inspect it and shall inform relevant association members of the main provisions of such contract, the numbers of the employee stock options granted to respective association members, and other related matters: <Amended on Jul. 28, 2014>

1. Matters concerning the association members to be granted employee stock options;

2. Exercise price of employee stock options and the adjustment of such price;

3. Periods set for offering and exercising employee stock options;

4. Methods and procedure for exercising employee stock options;

5. Purport to the effect that the transfer, provision of securities, etc. of employee stock options are limited;

6. Deadline for a company to grant employee stock options after employee stock options are exercised;

7. Types and number of stocks to be issued or transferred as a result of the exercise of employee stock options;

8. Matters concerning the cancellation of the granting of employee stock options.

(5) The exercise price of employee stock options shall be decided to be 70/100 or more of the evaluated price determined by Ministerial Decree of the Employment and Labor; provided, where stocks are issued and provided, and the price at which the stocks options are exercised is lower than the par value thereof, the par value shall be the exercise price. <Amended on Jul. 28, 2014>

Article 21(Loan Borrowing by Association) #

(1) "Financial companies, etc. specified by Presidential Decree" in Article 42(1) of the Act shall be as follows: <Amended on Oct. 31, 2017; Jun. 1, 2021>

1. Banks under the Banking Act;

a. Insurance companies under the Insurance Business Act;

3. Securities financial companies under the Financial Investment Services and Capital Markets Act;

4. A mutual savings bank established under the Mutual Savings Banks Act;

5. The corporation for an intra-company labor-welfare fund (hereinafter referred to as "incorporated fund") under Article 52(2) of the Act and the joint labor-welfare fund foundation (hereinafter referred to as "joint fund foundation") under Article 86-3 of the Act;

6. Other financial companies established in accordance with the relevant Act to provide credit and engage in fund depository business.

(2) In borrowing a loan in accordance with Article 42(2) of the Act, the association shall comply with the following requirements:

1. The company with employee stock ownership plan and the association shall enter into a written agreement on the borrowing and repayment of the loan. In such cases, a resolution shall be first obtained at the board of directors of the company with an employee stock ownership plan;

2. The total amount of loans shall not exceed the total salary amount (referring to the salary amount subject to income tax; hereafter the same shall apply in this subparagraph) of the association members as of the immediately preceding fiscal year, and the loans of one fiscal year shall not exceed the amount calculated by multiplying the 10/100 of the total salary amount of the association members as of the immediately preceding fiscal year by the borrowing period under subparagraph 3 (referring to the number of the years during which the loans are borrowed, and a period falling short of one year shall be calculated as one year);

3. The borrowing period shall be the term of at least three years but not exceeding seven years, and even in cases of newly borrowing a loan for the repayment of an existing loan, the borrowing period shall not exceed the remainder of the borrowing period of the existing loan;

4. It is required to repay at least 10/100 of the residual amount of a loan as at the end of the immediately preceding year, in every year during the borrowing period of the loan.

Article 22(Trust Institution) #

(1) "Trust institution prescribed by Presidential Decree" in Article 43(1) of the Act means a corporation prescribed by Ministerial Decree of the Employment and Labor among securities finance corporations authorized in accordance with Article 324 of the Financial Investment Services and Capital Markets Act.

(2) The association shall deposit the employee stocks obtained by the association or association members in a trust institution within one month from the acquisition date prescribed by Ministerial Decree of the Employment and Labor.

Article 23(Deposit Period of Employee Stocks) #

(1) "Period specified by Presidential Decree" in the provisions, with the exception of the subparagraphs, of Article 43(2) of the Act means the relevant period classified as follows:

1. Employee stocks acquired by means of the financial resources referred to in Article 36(1)1 or 5 of the Act: A period of at least four years but not exceeding eight years, determined in consultation with their contributors;

2. Employee stocks acquired by means of the financial resources referred to in Article 36(1)2 of the Act: One year;

3. Employee stocks acquired by means of the loans borrowed without entering into an agreement under Article 42(2) of the Act, among financial resources referred to in Article 36(1)3 of the Act: One year;

4. Employee stocks acquired by means of the loans borrowed pursuant to an agreement entered into under Article 42(2) of the Act and are allocated to the accounts of the association members in accordance with Article 37 of the Act, among financial resources referred to in Article 36(1)3 of the Act: One year;

5. Employee stocks acquired by means of the financial resources referred to in Article 36(1)4 of the Act and are allocated to the accounts of the association members in accordance with Article 19(1)3 of the Act: One year;

6. Employee stocks acquired by contributions of the association members where a company with an employee stock ownership plan contributes 50/100 of the amount contributed by the association members, cooperatively in line with the contribution of the association members in accordance with the proviso of Article 43(2)2 of the Act: A period of at least one year but not exceeding four years determined based upon the company with the employee stock ownership plan;

7. Employee stocks acquired through capital increase without compensation for the employee stocks allocated to the accounts of the association members: The remainder of the deposit period of the employee stocks entitled to such capital increase without compensation; provided, the employee stocks shall not be deposited where the remainder of the deposit period is less than three months as of the delivery date of new stocks for capital increase without compensation.

(2) The employee stocks acquired by exercising the right of subscription of new stocks which accrues from the employee stocks deposited in accordance with each subparagraph of paragraph (1) may be not deposited.

Article 24(Furnishing of Deposited Employee Stocks as Collateral) #

"Cases necessary for the financial and economic life of such member of employee stock ownership association prescribed by Presidential Decree" in Article 43(3)2 of the Act means the following cases; provided, among the employee stocks referred to in Article 23(1)1 and 7, the employee stocks, the remainder of the deposit period of which exceeds one year, are excluded: <Amended on Jan. 19, 2016>

1. Where the association furnishes as collateral the employee stocks acquired by the association by means of loans in accordance with Article 42(3) of the Act, to the financing institution of the relevant loans and the guarantee institution for the financing of the relevant loans;

2. Where any association member borrows a loan by furnishing as collateral the employee stocks allocated to the accounts thereof in order to purchase the employee stocks;

3. Where any association member borrows funds for life stabilization by furnishing as collateral the employee stocks allocated to the accounts of them.

Article 24-2(Business Affairs of Trust Institutions) #

"Affairs prescribed by Presidential Decree" in Article 43(7) of the Act means the any of the following affairs: <Amended on Apr. 8, 2025>

1. Support for establishing associations of a stock company whose regular workforce is less than 50;

2. Support for the deposit and withdrawal of employee stocks of the associations established in a stock company whose regular workforce is less than 50;

3. Provision of information on the trade of employ stocks of unlisted corporations;

4. Education, promotion, and consultation for the introduction and operation of an employee stock ownership plan;

5. Support for the association's affairs related to the creation, management, and use of an association fund.

[This Article Added on Jun. 27, 2017]

[Previous Article 24-2 Moved to Article 24-3 <Jun. 27, 2017>]

Article 24-3(Corporation Guaranteeing Loss Indemnification Trade of Employee Stocks) #

"Financial corporation prescribed by Presidential Decree" in Article 43-2(1) of the Act means an entity which is an investment trader under Article 8(2) of the Financial Investment Services and Capital Markets Act and obtains authorization in accordance with Article 12(1) of that Act for the trade of over-the-counter derivatives under Article 5(3) of that Act.

[This Article Added on Jan. 19, 2016]

[Moved from Article 24-2; previous Article 24-3 moved to Article 24-4 <Jun. 27, 2017>]

Article 24-4(Goods for Loss Indemnification Trade of Employee Stocks) #

"Trade prescribed by Presidential Decree" in Article 43-2(1) of the Act means a trade acquiring any derivatives-combined securities under Article 4(2)5 of the Financial Investment Services and Capital Markets Act, the fundamental property of which is the stocks issued by a company with an employee stock ownership plan.

[This Article Added on Jan. 19, 2016]

[Moved from Article 24-3; previous Article 24-4 moved to Article 24-5 <Jun. 27, 2017>]

Article 24-5(Minimum Loss Indemnification Ratio of Employee Stocks) #

"Ratio prescribed by Presidential Decree" in Article 43-2(3)2 of the Act means 50/100.

[This Article Added on Jan. 19, 2016]

[Moved from Article 24-4; previous Article 24-5 moved to Article 24-6 <Jun. 27, 2017>]

Article 24-6(Financial Corporation Engaging in Business of Brokerage and Mediation of Lending and Borrowing Employee Stocks) #

"Financial corporation engaging in the business of the brokerage and mediation of lending and borrowing prescribed by Presidential Decree" in subparagraph 2 of Article 43-3 of the Act means any of the following entities:

1. Investment traders under Article 8(2) of the Financial Investment Services and Capital Markets Act;

2. Investment brokers under Article 8(3) of the Financial Investment Services and Capital Markets Act;

3. The Korea Securities Depository under Article 294 of the Financial Investment Services and Capital Markets Act;

4. Entities authorized for securities financing business from the Financial Services Commission under Article 324(1) of the Financial Investment Services and Capital Markets Act.

[This Article Added on Jan. 19, 2016]

[Moved from Article 24-5; previous Article 24-6 moved to Article 24-7 <Jun. 27, 2017>]

Article 24-7(Lending Methods of Employee Stocks) #

"Matters concerning lending method, lending limit, lending period, etc. of employee stocks prescribed by Presidential Decree" in subparagraph 3 of Article 43-3 of the Act means matters concerning lending methods, lending limit, and lending period under the following: <Amended on Jun. 27, 2017>

1. Lending method: A trust institution shall lend employee stocks in its name on the basis of the calculation of the association or association members;

2. Lending limit: A trust institution shall lend employee stocks to the limit not exceeding the ratio which is established by the trust institution according to an agreement with the association, up to the limit of the total number of the employee stocks acquired by the association or association members;

3. Lending period: It shall be required that a trust institution lend employee stocks for a period not exceeding that established pursuant to an agreement with a financial corporation engaging in the business of the brokerage and mediation of lending and borrowing under any subparagraph of Article 24-6.

[This Article Added on Jan. 19, 2016]

[Moved from Article 24-6 <Jun. 27, 2017>]

Article 25(Withdrawal of Employee Stocks) #

(1) "Ground specified by Presidential Decree, such as the dissolution of an employee stock ownership association or the death of a member of an employee stock ownership association" in Article 44(1) of the Act means the following grounds:

1. Dissolution of the association under Article 47(1) of the Act;

2. Death of an association member;

3. Retirement of an association member;

4. Other cases prescribed by Ministerial Decree of the Employment and Labor, where it is impossible to withdraw employee stocks, such as a case for exercising employee stock options.

(2) Employee stocks which can be withdrawn by an association member in accordance with paragraph (1)3 and 4, shall be limited to those employee stocks, the remainder of the deposit period of which is at least one year; and the employee stocks, the remainder of the deposit period of which exceeds one year, shall be collected and allocated to other association members by the association in accordance with the bylaws of the association; provided, in cases prescribed by Ministerial Decree of the Employment and Labor, an association member may withdraw the employee stocks, the remainder of the deposit period of which exceeds one year.

Article 26(Preemptive Purchase of Withdrawn Stocks) #

(1) Where the association or association members preemptively purchase the employee stocks withdrawn in accordance with Article 44(2) of the Act, the purchase price shall be calculated according the following classification:

1. Stocks of a stock-listed corporation: the final market price (referring to the reference trade price on the relevant date of withdrawal where there is no final market price) set in the securities market on the date immediately preceding the date of the withdrawal of the employee stocks;

2. Stocks of an unlisted corporation: the price on which the trade parties agree in consideration of the acquisition price under Article 27(1) (referring to the price on the trade parties agree where there is no acquisition price).

(2) If failing to reach agreement on the purchase price in a case referred to in paragraph (1)2, the association shall return the relevant stocks to the association members without delay.

Article 27(Repurchase Price) #

(1) Where a company with an employee stock ownership plan as an unlisted corporation acquires employee stocks in accordance with Article 45(2) of the Act, matters necessary for the acquisition of the stocks such as the price, point of time for price determination, price application period, etc. shall be determined in consultation between the company and the association. <Amended on Jun. 27, 2017>

(2) Where determining the acquisition price in accordance with paragraph (1), a company with an employee stock ownership plan may take into consideration the following evaluation prices: <Amended on Aug. 27, 2013>

1. Evaluation price of a trust institution under Article 43(1) of the Act;

2. Evaluation price of an accounting corporation registered with the Financial Services Commission in accordance with Article 24 of the Certified Public Accountant Act;

3. Evaluation price under Article 63 of the Inheritance Tax and Gift Tax Act;

4. Evaluation price of a credit rating company authorized for credit rating business in accordance with Article 335-3 of the Financial Investment Services and Capital Markets Act.

Article 27-2(Obligatory Repurchase of Unlisted Corporation) #

(1) "Company implementing the employee stock ownership program, as an unlisted corporation, with the size not less than that prescribed by Presidential Decree" in the main clause , with the exception of its subparagraphs, of Article 45-2(1) of the Act means a company implementing the employee stock ownership program (hereafter referred to as "company subject to obligatory repurchase" in this Article), which is an unlisted stock company (in the case of the establishment of a new company through division or merger with another company, referring to a stock company whose number of employees exceeds 300 persons and whose total amount of assets exceeds seven billion won), whose number of employees (excluding any of the following persons; hereafter in this Article, the same shall apply) exceeds 300 persons and whose total amount of assets exceeds seven billion won at the end of the immediately preceding business year: <Amended on Oct. 29, 2019>

1. Daily hire employees under Article 20 of the Enforcement Decree of the Income Tax Act;

2. Those who work for a fixed period of not exceeding three months;

3. Temporary agency workers under subparagraph 5 of Article 2 of the Act on the Protection of Temporary Agency Workers.

(2) "Grounds prescribed by Presidential Decree" in the proviso, with the exception of the subparagraphs, of Article 45-2(1) of the Act means any of the following:

1. Where an association member died;

2. Where an association member retires due to the disability falling under a disability grade at least as high as 7 grade under the Appendix 6 of the Enforcement Decree of the Industrial Accident Compensation Insurance Act;

3. Where an association member was dismissed due to managerial reasons under Article 24 of the Labor Standards Act.

(3) "Methods prescribed by Presidential Decree" in Article 45-2(1)1 of the Act means any of the following methods:

1. Acquisition by the preferential allotment under Article 38(2) of the Act;

2. Acquisition by the granting of employee stock options under Article 39 of the Act;

3. Acquisition by an allotment of new shares to other persons than shareholders under Article 418(2) of the Commercial Act.

(4) "The period specified by Presidential Decree" in Article 45-2(1)2 of the Act means one year.

Article 28(Exercise of Voting Rights of Association) #

(1) In exercising voting rights in accordance with Article 46(1) of the Act, the representative of the association shall exercise the voting rights of the stocks allocated to the accounts of the association members in the following manner:

1. It shall be required to exercise the voting rights or delegate the relevant voting rights to the association members by receiving the expression of interest or verifying whether to delegate the exercise of voting rights, with respect to the agenda of a general stockholders’ meeting, from the association members for a fixed period of at least seven days;

2. It shall be required to exercise the voting rights for the stocks regarding which there is neither any expression of interest nor any request for the delegation of the exercise of voting rights for the period under subparagraph 1, so that such voting rights do not affect the content of the votes of the number of the stocks calculated by subtracting from the number of the stocks represented at a general meeting of stockholders the number of the stocks with respect to which there is neither any expression of interest nor any request for the delegation of the exercise of voting rights.

(2) In exercising the voting rights for the stocks held in the accounts of the association, the representative of the association shall exercise the voting rights in a manner provided for in the bylaws of the association among the following manner, in consultation between the association and the company with an employee stock ownership plan:

1. To exercise the voting rights at the same ratio as the expressions of will by the association members who express their interest in accordance with paragraph (1)1 to the stocks allocated to the accounts of the association members;

2. To exercise the voting rights, so that such voting rights do not affect the content of the votes of the number of the stocks calculated by subtracting the number of the stocks held in the accounts of the association from the number of the stocks represented at the relevant general meeting of stockholders;

3. To exercise the voting rights according to such content of the expressions of will as determined at a general meeting of the association members.

Article 29(Reporting Dissolution of Association) #

(1) Where dissolving the association in accordance with Article 47(1) of the Act, its liquidator shall report the fact to the Minister of Employment and Labor within three weeks from the dissolution date, specifying the reasons for the dissolution.

(2) "Period determined by Presidential Decree" in the proviso of Article 47(1)4 of the Act means the periods classified as follows:

1. Where the association or association members of a controlled company or contracted company hold the employee stocks of the controlled company or contracted company: The period during which those employee stocks are deposited at a trust institution under Article 22(1);

2. Where association members have employee stock options: The period during which the employee stock options are provided.

Article 29-2(Takeover of Company by Association) #

"Taking over the relevant company with the employee stock ownership program by the method prescribed by Presidential Decree" in Article 49-2(1) of the Act means where the association takes over the company with the employee stock ownership program by becoming the largest stockholder after acquiring at least 30/100 of the total number of the outstanding shares of the company with the employee stock ownership program.

[This Article Added on Jun. 27, 2017]

Article 30(Application for Authorization for Establishment for Fund Corporation) #

(1) "Documents prescribed by Presidential Decree" in Article 52(5) of the Act means the following documents: <Amended on Jul. 28, 2014>

1. Articles of association;

2. A certificate of incumbency and other documents verifying the status of a member of the preparatory committee for the incorporation of the incorporated fund (hereinafter referred to as "preparatory committee");

3. A written verification of contributions to an intra-company labor welfare fund or an inventory of property thereof;

4. A business plan and a budgetary document;

5. Deleted. <Sep. 27, 2023>

(2) Upon authorizing the incorporation of a fund corporation in accordance with Article 52(6) of the Act, the Minister of Employment and Labor shall enter the following matters in the ledger of authorization to incorporate fund corporations and issue the applicant a certificate of authorization to incorporate a fund corporation: <Amended on Jul. 28, 2014>

1. Authorization number and authorization date;

2. Name of the fund corporation and the location of the office thereof;

3. Name and position of members of the intra-company labor welfare fund council (hereinafter referred to as "welfare fund council");

4. Other matters the Minister of Employment and Labor deems necessary.

(3) A written application for authorization to incorporate a fund corporation shall be processed within 20 days from the date of receipt thereof.

(4) The ledger of authorization to incorporate fund corporations under paragraph (2) shall be prepared and managed in electronic form except in extenuating circumstances.

[Title Amended on Jun. 1, 2021]

Article 31(Matters to Be Entered in Articles of Association) #

(1) The following matters shall be provided for in the articles of incorporation under Article 52(4) of the Act:

1. Purpose;

2. Name;

3. Locations of the main office and branch offices;

4. Matters concerning the creation, management methods, timing for contribution, and accounting of the intra-company labor welfare fund;

5. Matters concerning the welfare fund council, directors, and auditors;

6. Matters concerning methods for exercising the power of representation;

7. Matters concerning the projects and beneficiaries of the fund corporation;

8. Matters concerning the selective welfare system under Article 46(3) of the Act, only if operated;

9. Matters regarding amending the articles of association;

10. Matters concerning the integrated operation of the projects of the fund corporation and the other welfare projects;

11. Matters concerning the ownership of real estate necessary for the performance of the business affairs of the fund corporation;

12. Matters concerning dissolution;

13. Matters concerning the disclosure of the managerial and operational matters of the fund corporation;

14. Matters concerning the dissolution of the fund corporation.

(2) Members of the preparatory committee shall sign, or affix their signatures and seal to, the draft articles of incorporation.

Article 32(Registration of Establishment of Fund Corporation) #

(1) The incorporation of a fund corporation under Article 52(8) of the Act shall be registered at the location of the principal office of the fund corporation within three weeks from the date of receiving the certificate of authorization for establishment in accordance with Article 30(2). <Amended on Jul. 28, 2014>

(2) The matters to be filed for the registration of the incorporation of a fund corporation under paragraph (1) shall be as follows: <Amended on Oct. 31, 2017>

1. Purpose;

2. Name;

3. Locations of the main office and branch offices;

4. The total amount of property contributed under Article 61(1) and (2) of the Act and the property, the consolidation of which into the contributed property is decided by the resolution of the welfare fund council (hereinafter referred to as "fundamental property");

5. Names and addresses of directors;

6. Matters concerning the power of representation.

(3) With respect to the content of the registration of incorporation under paragraph (1), the Minister of Employment and Labor shall verify the corporation registration certificate through the common use of administrative information under Article 36(1) of the Electronic Government Act.

Article 33(Registration of Establishment of Branch Offices) #

Upon establishing a branch office, a fund corporation shall register the name, location, and date of establishment of the branch office established at the location of its main office within 3 weeks of establishment.

[This Article Wholly Amended on Jan. 21, 2025]

Article 34(Registration of Transfer) #

(1) If a fund corporation relocates its main office, it shall register the new location and the date of relocation within 3 weeks of the relocation at the former location or new location.

(2) If a fund corporation relocates its branch office, it shall register the new location and the date of relocation within 3 weeks of the relocation at the former location or new location.

[This Article Wholly Amended on Jan. 21, 2025]

Article 35(Registration of Changes) #

(1) Where there is any change in the matters under the subparagraphs (excluding subparagraph 4) of Article 32(2) or Article 33 (excluding cases falling under the registration of relocation under Article 34), a fund corporation shall register such change at the seat of its main office within three weeks after such change. <Amended on Jan. 21, 2025>

(2) Where the total amount of its fundamental property changes, the fund corporation shall report the content of such change to the Minister of Employment and Labor within three weeks. <Amended on Oct. 31, 2017>

(3) Article 32(3) shall apply mutatis mutandis to the confirmation of the content of registration of incorporation, transfer, or change of a branch office under Article 33, Article 34, and paragraph (1).

Article 36(Attached Documents) #

Where filing for a registration under Articles 32(1), and 33 through 35, the following relevant documents shall be attached:

1. Registration of establishment under Article 32(1): The articles of incorporation and certificate of authorization for incorporation of the fund corporation;

2. Registration of establishment of a branch office under Article 33: Documents verifying the establishment of that branch office;

3. Registration of transfer under Article 34: Documents verifying the transfer of the office;

4. Registration of change under Article 35: Documents verifying the relevant changed matter.

Article 37(Procedures for Registration of Fund Corporation) #

Registration of a fund corporation shall be processed in the same manner as registration procedures and objection-raising under the Commercial Registration Act.

Article 38(Application for Authorization for Modification of Articles of Incorporation) #

(1) A person who intends to obtain authorization to amend the articles of incorporation of a fund corporation in accordance with Article 53 of the Act shall, as prescribed by Ministerial Decree of the Employment and Labor, file a written application for authorization to amend the articles of incorporation with the Minister of Employment and Labor, attaching the following documents:

1. A statement of reasons for amending the articles of incorporation;

2. Provisions of the articles of association proposed to be amended (together with the comparative table of new and former provisions attached);

3. Copy of the minutes of the meeting of the welfare fund council concerning the amendment of the articles of incorporation.

(2) Article 30(1) and (2) shall apply mutatis mutandis to the procedures for applying for authorization to amend the articles of incorporation, and the issuance of a written authorization. In such cases, "authorization to incorporate a fund corporation" shall be construed as "authorization to amend the articles of incorporation", "application for authorization to incorporate a fund corporation" as "application for authorization to amend the articles of incorporation", "where authorizing the incorporation of a fund corporation" as "where authorizing the amendment of the articles of incorporation", and "written authorization to incorporate a fund corporation" as "written authorization to amend the articles of incorporation", respectively.

(3) An application for authorization to amend the articles of incorporation shall be processed within seven days from the date of receipt thereof.

Article 39(Election of Employee Members) #

(1) The members representing employees in accordance with Article 55(2) of the Act shall be elected by direct, secret, and anonymous ballot by employees; provided, in any of the following cases, they shall be elected according to the following classification:

1. Where there is a labor union comprised of a majority of employees: To elect as employee members the representative of that labor union and the person elected by that labor union;

2. Where it is deemed inevitable due to the characteristics of the relevant business: To elect the electors (hereinafter referred to as "electors of members" in this subparagraph) who in turn elect employee members in proportion to the number of employees of respective working departments, and to elect employee members by direct, secret, and anonymous ballot by a majority of the electors of members.

(2) The election procedures for employee members, and the registration and qualification of candidates therefor shall be subject to the decision of the welfare fund council.

Article 40(Substitute Members for Filling Vacancy) #

(1) Where a vacancy arises in the position of any member of the welfare fund council, a substitute member shall be commissioned or elected within 30 days.

(2) Where a vacancy arises in the position of an employee member in case of any business with respect to which there is no labor union comprised of a majority of employees, the next greatest vote holder in the voting ranking of the candidates at the immediately preceding election, may be elected as an employee member.

Article 41(Chairperson) #

(1) The welfare fund council shall have the chairperson, who shall be elected from among its members.

(2) The chairperson shall represent the welfare fund council and have general supervision and control of its affairs.

(3) One administrative secretary in charge of affairs, such as minute keeping at meetings shall be assigned to the portion of the members representing the employer (hereinafter referred to as "employer member") and the part of employee members, respectively.

Article 42(Convening of Meetings) #

(1) Meetings of the welfare fund council shall be convoked by the Chairperson.

(2) Where a meeting is requested to be convened on the portion of employee members or on the portion of employer members, specifying in writing the matters to be referred to the meeting, the Chairperson shall convene the meeting without delay.

(3) The Chairperson shall notify the members of the date, time, venue, agenda, etc. of a meeting at least seven days before the meeting is held.

Article 43(Quorum) #

The respective majorities of the employee members and employer members of the welfare fund council shall constitute a quorum, and any resolution thereby shall require the concurring vote of at least a majority of those present.

Article 44(Openness of Meetings) #

The meetings of the welfare fund council shall be open to the public; provided, the meetings may be held confidentially by a resolution of the welfare fund council.

Article 45(Contribution to Intra-Company Labor Welfare Fund) #

(1) When contributing to the intra-company labor welfare fund in accordance with Article 61(1) of the Act, a business owner shall notify the welfare fund council, fixing the period of contribution within 30 days from the decision date of the welfare fund council, and shall, when contributing to that fund in accordance with Article 61(2) of the Act, also notify the welfare fund council before the contribution.

(2) "Property specified by Presidential Decree" in Article 61(2) of the Act means the real estate necessary for conducting the affairs of the fund corporation under Article 67 of the Act, and the property prescribed by its articles of incorporation.

(3) Necessary matters concerning the methods of contribution, etc. under paragraph (1) shall be prescribed by the articles of incorporation.

Article 46(Business Activities and Beneficiaries of Fund Corporation) #

(1) The business activities of the fund corporation under Article 62(1) and (3) of the Act shall be conducted so as to benefit all employees, but preferentially treat low-income employees.

(2) "Projects prescribed by Presidential Decree" in Article 62(1)7 of the Act means the following:

1. Providing support for the sports and cultural activities of employees;

2. Support for events for the Labor Day;

3. Other business activities prescribed by the articles of incorporation, which are aimed at supporting the property formation of and providing a living aid to employees.

(3) In cases of implementing business activities under Article 62(1) of the Act, the fund corporation may operate a system through which each employee voluntarily selects and enjoys welfare benefits based on individual preferences and needs among various benefits (hereinafter referred to as "selective welfare system").

(4) The fund corporation may use the following amounts pursuant to Article 62(2) of the Act or the amounts under paragraph (6) or (7) for the intra-company labor welfare fund's business activities; provided, the amount specified in subparagraph 2 shall be only used for business activities financed by the corporation's own capital stocks: <Amended on Jun. 5, 2012; Oct. 31, 2017; Jan. 5, 2021; Jun. 1, 2021; Sep. 27, 2023; Apr. 8, 2025>

1. If a business owner, etc. have contributed to the intra-company labor-welfare fund (hereafter in this subparagraph referred to as "contributions") in the relevant fiscal year, an amount calculated by multiplying the contribution by a ratio set by the welfare fund council, not exceeding 50/100 of the contribution; provided, in any of the following cases, an amount shall be obtained by multiplying the contribution by a ratio set by the welfare fund council, not exceeding the ratios specified in the relevant items:

a. In cases falling under Article 62(2)1 or 3 of the Act: Up to 80/100;

b. In cases falling under Article 62(2)2 of the Act: Up to 80/100; provided, if the amount used to enhance the welfare of employees from companies directly contracted from the relevant project and temporary agency workers for the project under Article 62(2)2 of the Act out of the contributions exceeds the amount established by Decree of the Ministry of Employment and Labor, up to 90/100;

2. Amount set by the welfare fund council not exceeding the excess amount, if the total amount of fundamental property exceeds 50/100 of capital stock of the relevant business activity;

Article 47(Operation of Intra-Company Labor-Welfare Fund) #

(1) "Limit prescribed by Presidential Decree" in subparagraph 4 of Article 63 of the Act means an amount determined by the welfare fund council up to the extent of the 20/100 of fundamental property.

(2) "Business activities specified by Presidential Decree" in subparagraph 5 of Article 63 of the Act means the following business activities:

1. Purchase of the stocks issued by an investment company under the Financial Investment Services and Capital Markets Act;

2. Purchase of the stocks issued by a real estate investment company under the Real Estate Investment Company Act.

Article 48(Accounting Principle of Intra-Company Labor Welfare Fund) #

In accordance with Article 64 of the Act, the accounts of the intra-company labor welfare fund shall be treated in conformity with the accounting principle so as to accurately ascertain the management performance and property status of its business activities.

Article 49(Budget and Settlement of Accounts of Intra-Company Labor Welfare Fund) #

(1) The budget of the intra-company labor welfare fund shall be prepared so as to consist of the details of the general provisions of budget, the estimated statement of financial position, the estimated statement of profits and losses, and the supplementary schedules, necessary for clarifying their contents shall be prepared. <Amended on May 30, 2023>

(2) The statements of the settlement of accounts of the intra-company labor welfare fund for the relevant year shall be prepared so as to consist of the contents of the statement of financial position, the statement of profit and loss, the statements of appropriation of retained earnings, etc. and the supplementary schedules necessary for clarifying their contents shall be prepared. <Amended on May 30, 2023>

Article 50(Disclosure of Matters concerning Management and Operation of Fund Corporation) #

Disclosure under Article 66 of the Act shall be conducted by means such as publication in a company magazine and notice in a company.

Article 51(Ownership of Real Estate of Fund Corporation) #

Cases where it is necessary for executing its business affairs referred to in Article 67 of the Act shall be as follows:

1. Ownership of an office and facilities attached thereto, necessary for the operation and management of the fund corporation;

2. Deleted; <Oct. 29, 2019>

3. Ownership of labor welfare facilities under Article 62(1)5 of the Act;

4. Ownership of real estate donated or contributed to the intra-company labor welfare fund; provided, except where real estate is donated or contributed for any of the purposes referred to in subparagraph 1 through 3, the fund corporation shall not own real estate unless it converts the real estate so as to be managed in any manner provided for in Article 63 of the Act within one year from the date of donation or contribution of real estate, without unjustifiable grounds.

Article 52(Notification of Dissolution of Fund Corporation) #

Where the fund corporation is dissolved in accordance with Article 70 of the Act, the liquidator shall notify the Minister of Employment and Labor, specifying the ground therefor.

Article 53(Payment of Unpaid Money and Goods) #

(1) Where in accordance with Article 71(1) of the Act, the fund corporation intends to pay from its property, the money and goods business owner has not paid to employees (hereafter referred to as "unpaid money and goods" in this Article), it shall prove that the business owner has no ability to liquidate such unpaid money and goods.

(2) Where paying unpaid money and goods to employees in accordance with paragraph (1) and the property of the fund corporation is insufficient to pay them, the welfare fund council shall determine the payment rate and method.

Article 54(Attribution of Residual Property) #

Where the residual property of the fund corporation is attributed to the Labor Welfare Promotion Fund under Article 87 of the Act (hereinafter referred to as "Promotion Fund") in accordance with the proviso of Article 71(2) of the Act, the liquidator of the fund corporation shall submit the list of residual property to the Minister of Employment and Labor within three weeks from completion of the liquidation and deliver the residual property without delay.

Article 55(Ensuring Anonymity for Confidentiality) #

"Cases prescribed by Presidential Decree" in Article 83(2) of the Act means where the employees participating in the employee support program consent to the objects or consent of disclosure.

Article 55-2(Contribution to Joint Labor-Welfare Fund) #

"Important matters prescribed by Presidential Decree" in Article 86-2(2) of the Act means any of the following matters: <Amended on Jun. 1, 2021>

1. Real estate necessary for the performance of affairs of the joint fund foundation;

2. Property provided for in the articles of incorporation of the joint fund foundation.

[This Article Added on Jan. 19, 2016]

Article 55-3(Support for Business Activities of Joint Fund Foundation) #

(1) The Welfare Service may, in accordance with Article 86-5 of the Act, provide support within the scope of 100/100 of the amount contributed by business owners under Article 86-2(1) and (2) of the Act to the following joint fund foundations: <Amended on Dec. 31, 2019; Feb. 17, 2022; Jul. 7, 2023>

1. A joint fund foundation established by a business owner of a small and medium enterprise (hereinafter referred to as "business owner of a small and medium enterprise") under Article 2 of the Framework Act on Small and Medium Enterprises and a business owner of a large enterprise under the Act on the Promotion of Mutually Beneficial Cooperation between Large Enterprises and Small and Medium Enterprises;

2. A joint fund foundation established by at least two business owners of small and medium enterprises;

3. A joint fund foundation established by at least two business owners of middle-standing enterprises (hereafter in paragraph (2) referred to as "mutually beneficial middle-standing enterprises") under the Special Act on the Promotion of Growth and the Strengthening of Competitiveness of Middle-Standing Enterprises, which participate in projects for mutually beneficial local jobs selected under Article 29(4) of the Special Act on Local Autonomy and Decentralization, and Balanced Regional Development.

(2) If a joint fund foundation under paragraph (1)1 (only if a large enterprise is a mutually beneficial middle-standing enterprise) or paragraph (1)3 has received a fund from a local government pursuant to Article 86-2(2) of the Act, the Welfare Service may provide support to the extent equivalent to 100/100 of the amount of the fund, notwithstanding paragraph (1). <Added on Feb. 17, 2022>

(3) If a joint fund foundation under paragraph (1)2 or paragraph (1)3 has received a fund from a person other than a business owner pursuant to Article 86-2(2) of the Act, the Welfare Service may provide support to the extent equivalent to 100/100 of the amount of the fund, notwithstanding paragraph (1). <Added on Dec. 31, 2019; Feb. 17, 2022>

(4) Matters necessary for the requirements for support, the scale of support, and the period of support where providing support in accordance with paragraphs (1) through (3), shall be determined and publicly notified by the Minister of Employment and Labor. <Amended on Dec. 31, 2019; Feb. 17, 2022>

[This Article Added on Jan. 19, 2016]

Article 55-4(Use of Fundamental Property of Joint Fund Foundation) #

"Scope prescribed by Presidential Decree" in the provisions, with the exception of the subparagraphs, of Article 86-6(2) of the Act means the scope determined by the joint labor-welfare fund council (hereinafter referred to as "joint fund council") under Article 86-4(1) of the Act within 90/100 of the amount contributed by business owners, etc. to the joint labor-welfare fund in the relevant fiscal year under Article 86-2 and Article 86-7 of the Act.

[This Article Added on Jun. 1, 2021]

[Previous Article 55-4 moved to Article 55-6 <Jun. 1, 2021>]

Article 55-5(Grounds for Withdrawal from Joint Fund Foundation) #

(1) "Where any cause prescribed by Presidential Decree, such as termination of relationship between contractee and contractor, arises" in Article 86-8(1) of the Act means the following cases:

1. For joint fund foundations established between a contractee and a contractor: Where the relationship between the contractee and the contractor is terminated;

2. For joint fund foundations established between contractors of the same contractee: Where the relationship between each individual contractee and contractor is terminated;

3. In any of the following cases, where the business owner fails to contribute three or more times from the time of the joint fund council's decision to contribute until the next decision for contribution:

a. Where the inventory of the relevant business as of the last day of the month (hereafter referred to as "base month" in this subparagraph) immediately preceding the month in which the last day of the deadline falls, by which contributions must be made according to the decision for contribution by the joint fund council, has increased by 50/100 or more compared to the average monthly inventory of the year (hereafter referred to as "immediately preceding year" in this subparagraph) immediately preceding the year to which the base month belongs;

b. Where the production in the base month has decreased by 15/100 or more compared to the average monthly production in the immediately preceding year;

c. Where the sales in the base month have decreased by 15/100 or more compared to the average monthly sales of the immediately preceding year;

4. Where a labor union organized by a majority of employees in the business or workplace of the relevant business owner (referring to a majority of employees if there is no labor union organized by a majority of employees) demands withdrawal from the joint fund foundation.

(2) If a business owner intends to apply for withdrawal from the joint fund foundation under any of the subparagraphs of paragraph (1), the business owner shall submit to the joint fund foundation documents proving the grounds for withdrawal.

(3) Upon receipt of an application under paragraph (2), the joint fund foundation shall undergo consultation and decision of the joint fund council about the withdrawal of the relevant business owner within three months from the date of application. In such cases, members representing the employees or employers of the business owner intending to withdraw cannot exercise their voting rights.

Article 55-6(Application Mutatis Mutandis) #

`Articles 30 through 44, 46 through 52, 53(1) (limited to the disposal of property under Article 86-9 of the Act), 63(1) (limited to the disposal of property under Article 86-9 of the Act), 63, and 64 shall apply mutatis mutandis to the joint labor-welfare fund. In such cases, "corporation for intra-company labor-welfare fund" shall be construed as "joint labor-welfare fund foundation"; "preparatory committee for incorporation of the incorporated fund" as "preparatory committee for incorporation of joint labor-welfare foundation"; "preparatory committee" as "preparatory committee for incorporation"; "intra-company labor-welfare fund" as "joint labor-welfare fund"; "intra-company labor-welfare fund" as "joint labor-welfare fund"; "intra-company labor-welfare fund business" as "business under the subparagraphs of Article 62(1) of the Act." <Amended on Jun. 1, 2021>

[This Article Added on Jan. 19, 2016]

[Moved from Article 55-4 <Jun. 1, 2021>]

Article 56(Other Revenues) #

Other revenues under Article 88(1)11 of the Act shall be the following:

1. Revenues accrued from the operation of the welfare facilities for employees established and operated by the State in accordance with Article 28(1) of the Act, and the operation of labor welfare programs;

2. Other revenues recognized by the Minister of Employment and Labor.

Article 57(Composition of Deliberative Committee on Labor Welfare Promotion Fund) #

(1) The Deliberative Committee for Operation of the Promotion Fund (hereinafter referred to as "Deliberative Committee") shall be established in the Welfare Service, to deliberate on important affairs concerning the management and operation of the Promotion Fund under Article 90 of the Act.

(2) The Deliberative Committee shall be comprised of up to 15 members, including one Chairperson.

(3) The President of the Welfare Service shall serve as the Chairperson of the Deliberative Committee, and the members shall be commissioned by the President of the Welfare Service from among the public officials in general service, in charge of the affairs concerning the Promotion Fund who belong to the Senior Executive Service of the Ministry of Employment and Labor, the public officials in general service in charge of budget affairs concerning labor welfare who belong to the Senior Executive Service of the Ministry of Economy and Finance, and the following persons: <Amended on Dec. 30, 2025>

1. Full-time directors of the Welfare Service;

2. Persons that represent the public interest;

3. Persons who represent employers;

4. Persons recognized to have affluent knowledge and experience in labor welfare;

5. Persons recognized to have affluent knowledge and experience in the management and operation of the Promotion Fund.

(4) The term of office of the members falling under paragraph (3)2 through 5 commissioned by the President of the Welfare Service, shall be two years; provided, the term of office of the members for filling a vacancy shall be the remainder of his or her predecessor’s term of office.

(5) The Deliberative Committee shall deliberate on the following matters:

1. Establishment and Implementation of the Operational Plan for the Promotion Fund under Article 58;

2. The settlement of accounts of the Promotion Fund under Article 59;

3. Other matters the Chairperson of the Deliberative Committee refers to a meeting of the Deliberative Committee with respect to the management and operation of the Promotion Fund.

(6) In addition to the matters prescribed by this Decree, those necessary for the operation of the Deliberative Committee shall be determined by the Chairperson via a resolution of the Deliberative Committee.

Article 58(Formulation of Operational Plans for Promotion Fund) #

(1) Each fiscal year, the Welfare Service shall formulate a draft operational plan for the Promotion Fund for the next year, in accordance with the National Finance Act.

(2) To establish a draft operational plan for the Promotion Fund under paragraph (1) or modify an operational plan for the Promotion Fund, the Welfare Service shall refer it to the Deliberative Committee for deliberation.

[This Article Wholly Amended on Jul. 28, 2014]

Article 59(Settlement of Accounts of Promotion Fund) #

(1) Each fiscal year, the Welfare Service shall prepare a written report on the settlement of accounts of the Promotion Fund for the previous year and submit it to the Minister of Finance and Economy by the last day of February via the Minister of Employment and Labor. <Amended on Dec. 30, 2025>

(2) When submitting a written report on the settlement of accounts in accordance with paragraph (1), the following documents shall be attached: <Amended on May 30, 2023; Dec. 30, 2025>

1. Documents concerning the outlined content and analysis of the settlement of accounts of the Promotion Fund;

2. A statement of financial position, a statement of profit and loss, and other financial statements;

3. Documents proving cash revenues and expenditures such as the statement of accounts for revenues and expenses;

4. Other documents the Minister of Finance and Economy deems necessary for the confirmation of the accuracy of the settlement of accounts of the Promotional Fund.

(3) Where, in the course of the settlement of accounts of the Promotion Fund, it is found that profit has accrued, the Welfare Service shall appropriate such profit to offset any loss brought forward and deposit the remainder into the Promotion Fund.

Article 60(Detailed Operational Rules on Promotion Fund) #

Except as provided in this Decree, those necessary for the management and operation of the Promotion Fund shall be determined by the Welfare Service with approval of the Minister of Employment and Labor. The same shall apply where modifying any approved matter.

Article 61(Purposes of Promotional Fund) #

"Business prescribed by Presidential Decree" in subparagraph 17 of Article 91 of the Act means the following business:

1. Business for supporting the post-retirement life of employees, such as business for the retirement pension system;

2. Business included in the operational plan for the Promotion Fund under Article 58, which the Welfare Service deems necessary upon deliberation by the Deliberative Committee.

Article 62(Supervision over Operation of Promotion Fund) #

(1) The Welfare Service shall report on the current status of the execution of the operational plan for Promotional Fund and the operation of surplus fund to the Minister of Employment and Labor within 30 days after the close of each quarter.

(2) If deemed necessary to enhance the efficiency and the character of public interest, the Minister of Employment and Labor may formulate guidelines on the operation of the Promotion Fund and request the Welfare Service to comply therewith.

Article 63(Reporting of Operational Status of Fund Corporation) #

(1) In accordance with Article 93(1)3 of the Act, a fund corporation shall report on the operation status for the relevant year, a business plan for the next year (including an estimated statement of financial position and an estimated statement of profits and losses) and those matters determined by the Minister of Employment and Labor, to the head of the competent regional employment and labor office within three months after the close of every fiscal year. <Amended on May 30, 2023>

(2) The head of the competent regional employment and labor office in receipt of a report on the operations status, etc. of a fund corporation in accordance with paragraph (1) shall report the content to the Minister of Employment and Labor by the tenth day of the month immediately after the close of every quarter.

Article 64(Requirement of Submission of Materials) #

(1) Any reporting or submission of materials required under Article 93(1) or (2) of the Act shall be done in writing.

(2) Where issuing a corrective order or any other order in accordance with Article 93(1) or (2) of the Act, the period determined by Ministerial Decree of the Employment and Labor shall be granted, and may be extended once in extenuating circumstances.

Article 65(Delegation and Entrustment of Authority) #

(1) The Minister of Employment and Labor shall delegate authority over the following matters, to the heads of regional employment and labor offices in accordance with Article 94 of the Act: <Amended on Jul. 28, 2014>

1. Deleted; <Oct. 31, 2017>

2. Receipt of reports under the latter part of Article 47(1) of the Act;

3. Authorization to establish a fund corporation and authorization to amend the articles of incorporation of a fund corporation under Articles 52(4) and 53 of the Act;

4. Corrective orders issued under Article 69 of the Act;

5. Request for reports on the business, accounting and property of a fund corporation under Article 93(1)3 of the Act, inspection of accounting books, documents, etc., and the issuance of an order for rectification;

6. Request or order to a business owner or association to make a report, and the investigation or inspection of accounting books, documents, etc., among the affairs referred to in Article 93(2) of the Act;

7. Imposition and collection of administrative fines under Article 99 of the Act (excluding, however, the imposition and collection of administrative fines against institutions providing loan services, trusting institutions under Article 43 of the Act or persons offered subsidy or loans);

8. Receipt of notification of a preparatory committee for the establishment of an association under Article 8(4) and issuance of written certifications under paragraph (5) of that Article;

9. Receipt of reports on matters concerning change of the total amount of fundamental property under Article 35(2);

10. Receipt of notification of dissolution of a fund corporation under Article 52;

11. Receipt of lists of residual property submitted in accordance with Article 54.

(2) The Minister of Employment and Labor shall entrust the following affairs to the Welfare Service in accordance with Article 94(2) of the Act:

1. Subsidization with living stabilization fund under Article 19 of the Act;

2. Granting scholarships or student loans under Article 20 of the Act;

3. Subsidization of expenses to business owners under Article 28(4) of the Act;

Article 66(Return Procedures for Subsidies or Loans) #

Where ordering the return of amounts of the subsidies or loans granted by the State or a local government in accordance with Article 95 of the Act, the same procedures shall be followed as the procedures for the recovery of subsidies under the Subsidy Management Act. <Amended on Apr. 28, 2016>

Article 66-2(Installation and Operation of Rest Facilities) #

(1) "Labor prescribed by Presidential Decree, such as delivery and driving" in the former part of Article 95-2(2)4 of the Act means the following types of labor provided by a person specified in paragraph (1)1 of the same Article:

1. The following deliveries:

a. Parcel deliveries (referring to the labor of directly delivering parcels using a two-wheeled motor vehicle under Article 3(1)5 of the Motor Vehicle Management Act);

b. Courier (referring to the labor of collecting or delivering cargo using a truck under Article 3(1)3 of the Motor Vehicle Management Act);

c. Other deliveries of food, newspapers, learning materials, and merchandise, etc.;

2. Substitute driving (referring to the labor of driving a car to a destination on behalf of a private car driver);

3. Door-to-door sales (referring to the labor of directly visiting customers and selling products);

4. Visiting and inspecting rental products (referring to the labor of performing regular inspections to maintain and manage products purchased or rented by customers);

5. Door-to-door teaching (referring to the labor of visiting a member's home to teach a child or student using learning materials or teaching aids);

6. Insurance solicitation (referring to the labor of directly visiting customers to solicit them for insurance, completing contracts, and submitting the contracts to insurance offices);

7. In addition to the labor specified in subparagraphs 1 through 6, labor of which the majority of work is done by traveling or the location of the work is not constant, as prescribed by Ministerial Decree of the Employment and Labor.

(2) "Restrooms and other subsidiary facilities prescribed by Presidential Decree" in the latter part of Article 95-2(2)4 of the Act means the following facilities:

1. Restrooms with washing facilities;

2. Heating and air conditioning facilities.

[This Article Added on Feb. 17, 2022]

[Previous Article 66-2 moved to Article 66-4 <Feb. 17, 2022>]

Article 66-3(Entrustment of Operation of Rest Facilities) #

(1) The State or a local government may entrust the operation of a rest facility to the following corporations or organizations pursuant to Article 95-2(4) of the Act:

1. A public institution under Article 4 of the Act on the Management of Public Institutions;

2. A non-profit corporation under Article 32 of the Civil Act;

3. A non-profit, non-governmental organization related to the promotion of labor welfare under the Assistance for Non-Profit, Non-Governmental Organizations Act.

(2) Where the State or a local government entrusts the operation of rest facilities pursuant to paragraph (1), it shall publicly notify the entrusted institution and the date of entrustment (referring to the period of entrustment, if such period is fixed) in the Official Gazette or public gazette.

[This Article Added on Feb. 17, 2022]

[Previous Article 66-3 moved to Article 66-5 <Feb. 17, 2022>]

Article 66-4(Processing Sensitive Information and Personally Identifiable Information) #

The Minister of Employment and Labor (including persons entrusted with any affairs of the Minister of Employment and Labor in accordance with Article 65(2) and (3)), the Welfare Service, the associations, entities in which employee stocks are deposited in Article 43(1) of the Act, fund corporations, or joint fund foundations may, if inevitable for performing the following affairs, manage information containing health data under Article 23 of the Personal Information Protection Act and resident registration numbers or alien registration numbers under subparagraph 1 or 4 of Article 19 of the Enforcement Decree of the same Act: <Amended on Jul. 28, 2014; Jan. 19, 2016; Jun. 1, 2021>

1. Affairs concerning support under Article 19 of the Act such as loans for living stabilization fund;

2. Affairs concerning credit guarantee under Article 22 of the Act;

3. Affairs concerning management of employee stock ownership association funds under Article 36(2) of the Act;

4. Affairs concerning the management of the accounts of members of employee stock ownership associations under Article 37 of the Act;

5. Affairs concerning the preferential allocation to the members of employee stock ownership association under Article 38 of the Act;

6. Affairs concerning the granting of employee stock options under Article 39 of the Act;

7. Affairs concerning the deposit, etc. of employee stocks under Article 43 of the Act;

8. Affairs concerning the withdrawal, etc. of employee stocks under Article 44 of the Act;

9. Affairs concerning the exercise of voting rights at a general meeting of stockholders based on the ownership of employee stocks under Article 46 of the Act;

10. Affairs concerning the business activities of the incorporated fund under Article 62 of the Act and the business activities of the joint fund foundation under Article 86-6 of the Act (including Article 62(1) and (3) of the Act which is applied mutatis mutandis under Article 86-15 of the Act);

11. Affairs concerning the use of the Labor Welfare Promotion Fund under Article 91 of the Act;

12. Affairs concerning guidance, supervision, etc. under Article 93 of the Act (including cases applied mutatis mutandis under Article 86-15 of the Act).

Article 66-5(Re-Examination of Regulation) #

(1) The Minister of Employment and Labor shall examine the appropriateness of the following matters every three years, counting from each base date specified in the following subparagraphs (referring to the period that ends on the day before every third anniversary from the base date) and shall take measures, such as making improvements: <Amended on Dec. 30, 2015; Dec. 30, 2016; Mar. 7, 2023>

1. Content of the bylaws of the association under Article 11: January 1, 2023;

2. Use of the association fund, the allocation of employee stocks by the association under Articles 17, 19, and 23: January 1, 2017;

3. Trust institutions, the furnishing of deposited employee stocks as collateral and the preferential purchase of withdrawn employee stocks under Articles 22, 24, and 26: January 1, 2017;

3-2. Methods for exercising voting rights by the representative of the association under Article 28: January 1, 2023;

4. Application for authorization to incorporate an intra-company labor welfare fund corporation under Article 30: January 1, 2017;

5. Deleted; <Mar. 3, 2020>

6. Deleted; <Mar. 7, 2023>

7. Election of employee members under Article 39: January 1, 2017;

8. Deleted. <Mar. 3, 2020>

(2) The Minister of Employment and Labor shall examine the appropriateness of eligibility for membership of the employee stock ownership association under Article 10 every three years, counting from the base date of January 1, 2016 (referring to the period that ends on the day before January 1 of every three years), and shall take measures, such as making improvements. <Amended on Sep. 27, 2023>

[This Article Added on Dec. 9, 2014]

[Moved from Article 66-3 <Feb. 17, 2022>]

Article 67(Criteria for Imposition of Administrative Fines) #

Criteria for imposition of administrative fines under Article 99 of the Act are as listed in the Appendix. <Amended on Jul. 28, 2014>

[This Article Wholly Amended on Mar. 30, 2011]