If You Need Help Understanding the Meaning, Timeline, and Supreme Court Precedents on Lawsuits to Confirm Worker Status
Why Lawsuits to Confirm Worker Status Matter
Even when contracts are signed under labels such as “freelancer,” “outsourcing,” or “independent contractor,” the first and most critical issue in a dispute is whether the individual legally qualifies as a “worker.”
A lawsuit to confirm worker status is the procedure that definitively resolves this issue, and it serves as the starting point for all subsequent legal determinations, including wages, severance pay, the legality of dismissal, and entitlement to social insurance.
Once worker status is recognized, the protective provisions of the Labor Standards Act—covering wages, severance pay, and restrictions on dismissal—apply retroactively.
As a result, previously unsettled rights and obligations are determined all at once (Article 2(1)1 of the Labor Standards Act).
This makes the issue a source of real protection for one party and, at the same time, a significant legal burden for the other.
Above all, if the initial approach is misdirected, it can lead to legal risks that are difficult to remedy later. For this reason, the issue must never be approached lightly.
How Courts Determine Worker Status
When determining whether an individual qualifies as a worker, courts do not focus on the form or title of the contract.
Instead, they examine the substance of the working relationship—specifically, whether the individual provided labor to the employer in a subordinate relationship for the purpose of receiving wages.
In practice, courts comprehensively consider economic and social factors such as:
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Whether the employer determines the content of the work and exercises substantial direction and supervision over how it is performed
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Whether the employer designates working hours and the workplace, and whether the individual is bound by such designation
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Whether the individual can independently operate a business at their own expense and responsibility
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Whether the individual bears the risks of profit and loss arising from the provision of labor
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Whether the remuneration constitutes compensation for the labor itself
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Whether a base salary or fixed compensation is set, and whether wage income tax is withheld
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The continuity of the working relationship and the degree of exclusivity toward the employer
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Whether the individual is recognized as a worker under social security systems
That said, factors such as the existence of a fixed salary, withholding of wage income tax, or recognition under social insurance schemes are matters the employer—often in a stronger economic position—can unilaterally determine.
Therefore, worker status should not be easily denied based on these factors alone.
In short, no single element is determinative. The key lies in assessing the overall structure and substance of the working relationship.
Practical Issues That Commonly Arise in Disputes
In lawsuits to confirm worker status, the burden of proving worker status generally lies with the individual asserting it (Supreme Court Decision dated June 25, 2020, Case No. 2020Da207864).
Accordingly, it is essential to secure concrete evidence that demonstrates actual working conditions and the existence of direction and supervision.
In practice, claims for unpaid wages or severance pay are often combined with a worker status confirmation claim.
If worker status is recognized, rights are applied retroactively, which can significantly expand the scope of the dispute and the associated risks.
As a result, the later a strategic approach is taken, the greater the financial and legal burden becomes for the parties involved.
Decent Law Firm’s Approach to Lawsuits Confirming Worker Status
In lawsuits to confirm worker status, the most important task is not merely asserting that worker status exists, but proving—through concrete facts—that the substance of the labor relationship constitutes a relationship of subordination to the employer.
Decent Law Firm approaches these cases by focusing on the actual substance of the working relationship, rather than the form or title of the contract, and by structuring the facts in a way that allows the court to make a clear legal determination.
We also view worker status confirmation lawsuits not as isolated win-or-lose cases, but as the starting point of the entire dispute.
In doing so, we comprehensively assess the client’s situation and the potential legal risks that may arise after the judgment, and set a strategy aimed at minimizing burdens that could extend beyond the outcome itself.
A lawsuit to confirm worker status is a procedure that should never be taken lightly.
This is precisely why professional legal assistance is essential from the initial planning stage onward.
