Hokyun “Brad” Lim
P brad@decentlaw.ioBrad combines hands-on experience from COSMAX NBT, Korea Credit Information, and his own startup background to deliver practical advice in corporate and employment law.
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BlogsLegal responses every employer accused of violating the Labor Standards Act must review
Violations of the Labor Standards Act start with “structure,” not “intent” In practice, many employers say, “I didn’t know the law,” or “I was just following common practice.” However, violations of the Labor Standards Act may result in criminal liability once intent is recognized, and ignorance of the law does not exempt an employer from responsibility. In reality, most problems do not stem from bad faith, but from the gap between statutory standards and actual workplace operations. Industry practices, internal customs, or long-standing methods may feel familiar in daily operations, but they can lead to completely different conclusions in legal assessments. In particular, when a business expands without a structured HR and labor management system, small mistakes tend to accumulate and eventually develop into disputes. The party experiencing the greatest anxiety and pressure in this process is often the employer. For those lying awake at night, struggling alone to determine how to respond, this article aims to provide a realistic framework for understanding the situation. One point must be made clear: issues under the Labor Standards Act are never trivial. A misstep in the initial assessment can escalate into full criminal proceedings. Common types of Labor Standards Act violations involving employers Cases that proceed to investigations or litigation show consistent patterns of violation. First, wage-related issues. These include failure to meet minimum wage requirements, misinterpretation of what counts toward wages under Article 5 of the Enforcement Decree of the Minimum Wage Act, and miscalculation of overtime, night work, or holiday work allowances. In particular, many employers use the label “comprehensive wage system” (fixed overtime pay) without satisfying the legal requirements established by case law—such as difficulty in calculating working hours, absence of disadvantage to employees, and explicit or implicit agreement—resulting in frequent legal issues. Second, working hours and break-time management. Situations where attendance records are missing or merely formal, or where break times exist only on paper and employees cannot freely use them, are investigated as violations of Article 54 of the Labor Standards Act (see Supreme Court Decision, July 12, 2018, 2013Da60807, among others). Misunderstandings also frequently arise regarding special industry exceptions under Article 59 of the Act and the written agreement requirements for flexible working-hour systems. Third, disputes over severance pay and continuous service periods. Employers may believe that they created a formal break during contract renewals, but courts assess continuity based on the substance of ongoing employment, not formal interruptions (see Supreme Court en banc Decision, July 11, 1995, 93Da26168). This category also includes cases where the label “freelancer” or “fixed-term employee” does not align with the actual working arrangement. Fourth, violations related to documentation and formal requirements. Failure to prepare or deliver employment contracts, failure to report workplace rules, and omission of mandatory items in wage statements are often treated as simple mistakes, but are clearly regarded as violations during investigations. The real risks employers face when violating the Labor Standards Act Many employers assume the matter will end with an administrative fine, but the reality is different. Labor inspections can begin with corrective orders and escalate into criminal charges. It is not uncommon for a complaint by a single employee to expand into an investigation covering the entire workforce. Under Article 115 of the Labor Standards Act (the joint liability provision), not only the corporation but also the individual representative may be subject to criminal punishment, including the possibility of a criminal record due to fines. That said, if the employer can demonstrate that they exercised substantial care and supervision to prevent violations, exemption from liability may be possible (proviso to Article 115). Beyond this, employers must consider civil claims for retroactive wages or severance pay, damage to business reputation, and the spread of issues into investment and labor risks. Ultimately, a single HR issue can affect the entire business. How Decent Law Office changes the direction of response When an investigation or complaint is initiated, the first thing an employer should do is not to immediately provide statements or submit documents. The priority is to organize the facts, separate legal issues, and establish a response strategy. Internal attendance data, wage structures, and the consistency between contracts and actual practices must be reviewed first. Accordingly, Decent Law Office focuses on building statement strategies for labor inspections, conducting advance reviews of wage, working-hour, and severance structures, and establishing early defenses to minimize criminal risk. The firm also works in coordination with labor and accounting professionals to propose solutions that consider the entire business structure, rather than addressing violations in isolation. Whether Labor Standards Act issues remain a matter of post-incident damage control or are transformed into a preventive management system depends on the initial response. Before finding yourself labeled as an employer in violation of the Labor Standards Act, reviewing your structure and correcting course is the most realistic choice.
2026-01-22 -
Blogs
Must-read if you are wondering how to review an employment contract and respond effectively
Why an employment contract is not a mere “formality,” but a risk-management document Employment contracts are often treated as formal documents used simply to complete the hiring process. In reality, however, a significant number of labor disputes originate from the wording of the contract itself. In many cases, contracts are formally executed but contain provisions that fail to meet the standards set by the Labor Standards Act and other relevant laws, or they repeatedly use clauses where the actual working conditions differ from those stated in the contract. In practice, once a dispute arises, the rights and obligations of the parties—and the scope of liability—are determined based on the working conditions specified in the employment contract. For this reason, reviewing an employment contract should not be viewed as damage control after a problem occurs, but as a preventive measure designed to block disputes from arising in the first place. This process is not a simple document check; it is the starting point for managing legal risks that may persist for years. Key clauses that most frequently cause problems in employment contracts Clauses that lead to disputes tend to follow consistent patterns. If the structure of wages is unclear—such as the distinction between base salary, bonuses, and various allowances (overtime, night work, holiday work, etc.)—disputes often arise during the calculation of ordinary wages, average wages, and retirement benefits (Labor Standards Act Article 2(1)5 and 6). Dispute risk also increases when provisions regarding prescribed working hours, overtime, night work, and holiday work are drafted in broad or vague terms rather than with sufficient specificity. In particular, comprehensive wage systems (fixed overtime pay systems) are frequently applied in form only, without satisfying the required conditions—such as difficulty in calculating actual working hours—resulting in especially high legal risk (see Supreme Court Decision, May 20, 2010, 2008Da6052, among others). Issues also commonly arise where the title of a worker—such as fixed-term employee or freelancer—does not match the actual nature of the work performed, leading to disputes over employee status. Likewise, unclear standards for contract expiration, termination, or renewal repeatedly become sources of conflict (Act on the Protection of Fixed-Term and Part-Time Employees, Article 2(1)). Ultimately, the core issue is not whether a clause exists, but how it is drafted, which is precisely why a proper employment contract review is necessary. When is an employment contract review necessary? The most effective time is before entering into the contract, specifically just prior to signing. Review is also critical when a contract is renewed, working conditions are changed, or personnel and compensation systems are restructured. It is likewise necessary when discrepancies emerge between the terms stated in the contract and how they are actually implemented—particularly with respect to wages, retirement benefits, and working hours—or when early signs of dispute appear. Conducting an employment contract review in advance, rather than after a dispute has already arisen, can significantly reduce legal costs and risks. For those who feel uncertain or anxious due to legal ambiguity surrounding their employment contract, it is important to understand that professional review at an early stage can decisively influence the outcome of any future dispute. Conversely, delaying proper review and response may expand the scope of legal liability or make dispute resolution more difficult, requiring a cautious and proactive approach. Decent Law Office’s approach to employment contract review Decent Law Office does not stop at refining wording. Each clause is analyzed for risk based on real labor disputes and judicial precedents, with a focus on structural vulnerabilities that could lead to conflict. Furthermore, the firm considers response strategies that can be immediately implemented should a dispute arise in the future. Through this approach, employment contract review becomes not a one-time procedure, but an ongoing risk-management tool. An employment contract is not a document to consult after a dispute occurs—it is a document designed to prevent disputes from occurring at all. With Decent Law Office, a single employment contract review can reduce long-term accumulated legal risks, and that choice ultimately protects both the organization and the individual.
2026-01-20 -
Blogs
Outcomes Differ Depending on How a Severance Pay Attorney Responds
Why Do Severance Pay Disputes Keep Repeating? The primary causes of severance pay disputes lie in disagreements over the continuous service period and the method of calculating average wages. In practice, it is common to see cases where the contractual employment period is shortened despite the actual work performed, or where bonuses and various allowances are excluded from wages. Employers often justify their calculations based on internal rules or customary practices, but legal standards frequently lead to entirely different conclusions. These discrepancies are difficult for individuals to assess on their own, often resulting in employees accepting unfair settlements as they are. At this stage, review by a severance pay attorney allows for an objective assessment of whether recalculation under statutory standards is possible. Settlement Agreements and Confirmations: What Must Be Reviewed Before Signing Settlement agreements or confirmations presented during the resignation process are not mere procedural documents; they are legally binding instruments that can determine whether future rights may be exercised. In particular, the following elements must be reviewed individually before making a decision: Key Items to Review in Severance Settlement Agreements Whether the agreement includes any waiver of claims Whether the basis for severance pay calculation is clearly explained Whether the payment amount is appropriate compared to statutory standards Whether the agreement was reached without sufficient disclosure of information Whether the subject and scope of the agreement are clear and specific Even if only some of these elements are lacking, the validity of the agreement may be contested. In particular, agreements entered into due to mistake or deception may be subject to rescission (Supreme Court of Korea, December 12, 1995, Case No. 94Da22453). Failing to review these issues before signing may result in voluntarily relinquishing recoverable rights. Therefore, prior to signing any agreement, it is essential to accurately analyze the meaning and legal effect of its terms. At this stage, whether a severance pay attorney conducts a pre-signature review becomes a key factor determining the scope of future remedies. How Timing and Procedural Choices Affect Outcomes In severance pay disputes, outcomes can vary significantly depending on when and how a response is made. The longer the delay, the more difficult it becomes to secure evidence, and rights may become unenforceable due to the expiration of the statute of limitations. In particular, the following factors must be reviewed comprehensively: Key Considerations When Determining Timing Changes in the availability of evidence The employer’s response posture Risks of statute of limitations expiry and loss of evidence The strategic importance of early judgment How Procedural Choices Shape the Response Strategy When administrative procedures are appropriate When litigation is necessary For individuals experiencing anxiety while facing this issue alone, the initial choice of procedure often provides the most practical assistance. Conversely, postponing action may result in the statute of limitations expiring, making enforcement impossible. Severance pay disputes should never be taken lightly. At this critical decision point, strategic planning with a severance pay attorney is what ultimately creates meaningful differences in outcomes. How Decent Law Firm Assists Based on extensive practical experience in labor disputes, Decent Law Firm conducts systematic analysis of severance pay cases. In particular, labor law attorneys who are former certified labor consultants are directly involved, carefully reviewing wage components and employment relationship interpretations from both practical and statutory perspectives. Rather than merely explaining legal provisions, we establish a consistent strategy that encompasses fact organization, evidence structuring, and procedural responses. Restoring rights after resignation depends heavily on timing and strategic direction. Before it becomes too late, we encourage you to correct unfavorable situations through the assistance of a qualified severance pay attorney.
2026-01-15
