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.
- Corporate · Startups
- Labor · Employment Disputes
- Corporate & Biz
- Real Estate Disputes · Construction
- VC · Financial Advisory
- Cross-border · Dispute Resolution
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법률정보Workplace Harassment Lawyer: Why You Need to Act Before It's Too Late
What Does Workplace Harassment Mean Under the Law? Under Korea's Labor Standards Act, workplace harassment refers to conduct in which an employer or employee uses a position or relationship of superiority in the workplace to inflict physical or mental suffering on another employee, or to worsen the working environment, beyond the appropriate scope of work. Verbal abuse, ostracism, and unfair exclusion from work all qualify as harassment Employers must investigate promptly upon receiving a report Retaliating against a reporting employee carries a penalty of up to 3 years in prison or a fine of up to KRW 30 million Because the legal requirements and procedures are clearly defined, it is important to work with an attorney experienced in workplace harassment cases to organize the facts of your situation. From Reporting to Remedy: What Is the Process? Internal report — Filed with the HR department or a reporting center Fact-finding investigation — Conducted objectively by the employer Corrective action — Disciplinary measures against the perpetrator, workplace reassignment, etc. Complaint to the Ministry of Employment and Labor — Can be filed separately from an internal report, or if the employer's response is inadequate Damages claim — A civil lawsuit can be pursued alongside, if necessary Since early evidence collection and how you respond during questioning can determine the outcome, it is advantageous to seek legal assistance from the very start of the investigation. A Real Case: How a Workplace Harassment Case Was Resolved [Case We Handled] Ms. B, an employee in her twenties, endured ongoing verbal abuse and exclusion from work by a superior, but felt discouraged when the company's investigation turned out to be superficial. With the help of Decent Law Firm, she systematically organized recorded conversations and messenger records and filed a complaint with the Ministry of Employment and Labor, ultimately securing disciplinary action against the perpetrator and improvements to the working environment. As this case shows, the outcome of a workplace harassment case can vary greatly depending on how the evidence is organized and how the process is handled. Why You Should Work With Decent Law Firm Workplace harassment cases require the following areas of professional support: Protecting employee rights during the internal investigation process Preparing complaint and remedy application documents for the Ministry of Employment and Labor Developing a strategy for damages claims Drawing on extensive experience handling workplace harassment cases, Decent closely analyzes each client's situation and works alongside them systematically from the reporting stage through to final resolution. Workplace harassment is a classic example of a case where securing evidence becomes more difficult as time passes. If you are already experiencing harassment or considering filing a report, we encourage you not to make the decision alone, but to first calmly review the facts with an experienced professional. Decent is always ready to provide prompt, accurate consultations and help you find the best path forward for your situation.
2026-07-23 -
법률정보
Virtual Asset “Hwanchigi” in Korea: Penalties and Key Changes Under the 2026 Foreign Exchange Transactions Act
As cross-border transactions involving virtual assets and overseas payment services continue to increase, Korean regulators are paying closer attention to whether such transactions constitute unlicensed foreign exchange business or illegal remittance activities. The Korea Customs Service recently conducted targeted inspections of high-risk money exchange businesses and identified violations involving false transaction records, foreign currency sales exceeding statutory limits, and failures to report large cash transactions. The businesses selected for inspection also included entities suspected of using virtual assets for illegal cross-border remittances. A major regulatory change will take effect on December 3, 2026, when the amended Foreign Exchange Transactions Act comes into force. Under the amended Act, certain cross-border virtual asset transfer services will become subject to a separate registration requirement. Virtual asset service providers, payment companies, remittance operators, and businesses offering cross-border settlement services should review whether their current business models fall within the scope of the new registration regime. What Is “Hwanchigi” Under Korean Law? “Hwanchigi” is not a term expressly defined in the Foreign Exchange Transactions Act. It generally refers to an arrangement in which funds are transferred across borders without using a bank or another authorized foreign exchange institution. Instead, separate pools of funds or accounts in Korea and another country are used to produce the same economic effect as an international remittance. For example, a person in Korea may pay Korean won to a local operator, while the operator’s overseas partner pays an equivalent amount in foreign currency to the intended recipient abroad. The Korean won received in Korea is not physically transferred overseas. Nevertheless, because a corresponding payment is made abroad, the arrangement produces substantially the same result as an international remittance. Article 8 of the Foreign Exchange Transactions Act generally requires a person who engages in foreign exchange business as a commercial activity to obtain the necessary registration. A person may therefore be regarded as participating in foreign exchange business even if they did not personally send money overseas, provided that their role formed part of a broader structure designed to complete a cross-border payment. A Transaction May Be Regulated Even If No Foreign Currency Crosses the Border Under Korean foreign exchange law, the key issue is not whether the same cash or foreign currency physically crossed the border. What matters is whether payments made in Korea and abroad were connected in a manner that produced the same economic effect as a cross-border transfer. Common structures that may raise regulatory concerns include the following. ▪️ Korean Won Received in Korea and Foreign Currency Paid Overseas A Korean account receives the funds, while an overseas partner or local office pays foreign currency to the designated recipient abroad. ▪️ Funds Received Overseas and Korean Won Paid in Korea Foreign currency or local currency is received outside Korea, and Korean won is then paid into a designated Korean bank account. ▪️ Settlement Through Third-Party Accounts Funds are paid or received through accounts held by family members, employees, acquaintances, or unrelated business entities rather than the actual sender or recipient. ▪️ Offshore and Domestic Obligations Offset Against Each Other Amounts payable in Korea and abroad are offset, allowing the parties to settle without making a conventional international bank transfer. If these transactions are conducted repeatedly and the operator earns fees or profits from exchange-rate differences, the activity may be treated as unregistered foreign exchange business. Why the Supreme Court Treated Virtual Asset Arbitrage as Foreign Exchange Business In its September 4, 2025 decision, Supreme Court Case No. 2024Do16540, the Court confirmed that a transaction may constitute foreign exchange business even where no foreign currency was directly transferred across the border. In that case, the defendant received virtual assets from a non-resident located overseas, sold them through a Korean virtual asset exchange, and transferred the proceeds in Korean won to multiple domestic bank accounts designated by the non-resident. The defendant did not personally remit foreign currency overseas. Nevertheless, the Supreme Court upheld the lower court’s finding that the transaction performed substantially the same function as an inbound remittance service, in which a Korean foreign exchange bank pays Korean won to a domestic recipient based on payment instructions from a foreign bank. The relevant question was therefore not simply whether the defendant had directly sent funds abroad. The Court examined whether the overall transaction structure effectively facilitated payments between Korea and another country. However, the sale of virtual assets followed by a domestic Korean won transfer does not automatically constitute unregistered foreign exchange business in every case. The following factors should be considered together: ▪️ The purpose and background of the transaction ▪️ The size and frequency of the transactions ▪️ The duration and degree of repetition ▪️ Whether fees or exchange-rate profits were earned ▪️ Whether the activity was conducted as a business Can Virtual Assets and Overseas Payment Services Be Treated as Hwanchigi? The use of virtual assets or overseas payment services does not, by itself, exclude a transaction from the application of Korean foreign exchange laws. ▪️ Receiving Korean Won and Sending Virtual Assets to an Overseas Wallet Where Korean won is received in Korea and Bitcoin, USDT, or another virtual asset is sent to an overseas recipient in return, the transaction may be treated as a cross-border payment service rather than a simple virtual asset sale. ▪️ Receiving Virtual Assets Overseas and Paying Korean Won in Korea A transaction may also be treated as cross-border payment activity where virtual assets received from overseas are sold in Korea and the proceeds are paid into domestic accounts designated by the overseas party. ▪️ Settling Funds Through WeChat Pay or Alipay Regulatory concerns may arise where Korean won is received in Korea and an overseas payment account is funded abroad, or where funds are received overseas and Korean won is paid to a recipient in Korea. These transactions are not automatically illegal. The authorities will generally examine: ▪️ Whether the domestic payment corresponded to an overseas payment ▪️ Whether third-party accounts were used ▪️ Whether the activity was repeated ▪️ Whether the operator earned fees or exchange-rate profits ▪️ Whether the transaction was conducted for a commercial purpose Key Changes Under the 2026 Amendment to the Foreign Exchange Transactions Act The amended Foreign Exchange Transactions Act was promulgated on June 2, 2026 and will take effect on December 3, 2026. The amendment introduces three major changes. ▪️ Registration Requirement for Cross-Border Virtual Asset Transfer Services A virtual asset service provider that uses virtual asset sales, purchases, or exchanges to transfer value between Korea and another country, or to produce substantially the same effect, will be required to register with the Minister of Economy and Finance. A virtual asset service provider registration under the Act on Reporting and Using Specified Financial Transaction Information may not be sufficient by itself. A separate registration under the Foreign Exchange Transactions Act may be required where the business provides cross-border virtual asset transfer services. ▪️ Stronger Administrative Sanctions for Operating Outside the Registered Scope A specialized foreign exchange business operator that conducts foreign exchange activities outside its registered scope may be subject to: ▪️ Cancellation of registration ▪️ Business restrictions ▪️ Suspension of business ▪️ Administrative surcharges imposed in place of certain suspension measures Businesses should therefore confirm that their actual services remain within the scope of their registration. ▪️ Criminal Penalties for Unregistered Business and Certain Payment Procedure Violations A person who conducts cross-border virtual asset transfer business without registration may be subject to: ▪️ Imprisonment for up to three years ▪️ A fine of up to KRW 300 million The amended Act also introduces criminal penalties of: ▪️ Imprisonment for up to one year ▪️ A fine of up to KRW 100 million These penalties may apply where a person violates prescribed payment procedures for the purpose of obtaining an improper financial benefit for themselves or another person. The amendment does more than simply clarify which businesses must register. It expressly brings cross-border virtual asset transfer services within the registration framework and clarifies the scope of criminal liability for unregistered activities and certain payment procedure violations. The Substance of the Fund Flow Matters More Than the Name of the Transaction Virtual asset-based hwanchigi and arbitrage cases are primarily governed by the Foreign Exchange Transactions Act. Depending on the transaction structure, the following laws may also apply: ▪️ The Act on Reporting and Using Specified Financial Transaction Information ▪️ The Virtual Asset User Protection Act ▪️ Other criminal and financial regulations related to money laundering, fraud, or unlawful fund transfers Businesses and individuals should review the entire flow of funds, including: ▪️ The roles of the parties ▪️ Domestic and overseas bank transactions ▪️ Wallet transfers and transaction records ▪️ Fee and exchange-rate arrangements ▪️ The frequency and commercial nature of the activity Decent Law Firm’s Virtual Asset Practice Group advises clients on investigations involving alleged violations of the Foreign Exchange Transactions Act and virtual asset-based remittance activities. We also assist virtual asset businesses, payment providers, and cross-border settlement operators in assessing whether their services are subject to registration under the amended Act. Where the Korea Customs Service or the police requests attendance or submission of documents, or where a business needs to determine whether its services fall within the amended regulatory framework, the transaction structure and supporting records should be reviewed before responding. This publication is provided for general informational purposes only and does not constitute legal advice for any specific matter.
2026-07-13 -
법률정보
Yellow Envelope Act and Employer Status of Principal Contractors: A Must-Read If You've Received a Bargaining Demand
What Does "Employer Status" of a Principal Contractor Mean Under the Yellow Envelope Act? Under the amended law, even a principal contractor that has not directly entered into an employment contract with the workers may be deemed an "employer" if it substantively and specifically controls or decides matters such as wages, working hours, work methods, and safety. In other words, in determining a principal contractor's employer status under the Yellow Envelope Act, the key factors are whether the subcontracted workers' duties are essential and continuously integrated into the principal contractor's business, and whether the principal contractor exercises substantive authority over hiring, discipline, and working conditions. What Is the Process for Determining Employer Status? The process generally proceeds in the following order: a bargaining demand from the subcontractor's union, the principal contractor's refusal, and then an application for remedy for unfair labor practices filed with the Labor Relations Commission. If, in this process, the principal contractor refuses or neglects the union's demand for collective bargaining without justifiable grounds, this constitutes an unfair labor practice and may be punished under Article 90 of the Trade Union and Labor Relations Adjustment Act by imprisonment for up to two years or a fine of up to KRW 20 million. Furthermore, if a remedial order from the Labor Relations Commission becomes final through administrative litigation and is still not complied with, the penalty is increased under Article 89(2) of the same Act to imprisonment for up to three years or a fine of up to KRW 30 million. Ultimately, treating a Labor Relations Commission ruling lightly can result in the representative director or the responsible manager becoming a criminal suspect or defendant. In fact, we have handled a case that escalated into a criminal matter through exactly this process. A Success Story: How Decent Helped [Case We Handled] Company A (a pseudonym), a principal contractor, was sued for an unfair labor practice after refusing a bargaining demand made by a subcontractor's union on the grounds of the company's employer status under the Yellow Envelope Act, and came to our firm for help. From the earliest stage of the investigation, Decent organized concrete evidence to clearly distinguish between the bargaining issues the principal contractor had actually controlled and decided, and those it had not. We also secured materials supporting the fact that the subcontractor had independently made its own decisions on hiring, discipline, and working conditions, and prepared the client for investigative questioning based on these materials. In addition, we ensured that the arguments made before the Labor Relations Commission and the defense strategy in the criminal case remained consistent with each other from start to finish. As a result, the representative of Company A received a non-prosecution disposition on the grounds that intent to commit an unfair labor practice was not established. *This case has been anonymized and reconstructed to protect personal information. Outcomes may vary depending on the specific facts and evidence of each case. Why You Should Work With Decent As this case shows, cases involving a principal contractor's employer status under the Yellow Envelope Act sit at the intersection of labor law and criminal law, so approaching the Labor Relations Commission proceedings and the criminal defense separately can easily result in unfavorable facts becoming fixed before they are properly addressed. That is why Decent organizes the evidence for substantive control from the Labor Relations Commission stage onward, and, at the investigation and trial stage, designs a defense strategy addressing both the intent behind the alleged unfair labor practice and whether there was justifiable cause. Because the question of employer status and the question of criminal liability can be argued as legally distinct issues, it is essential to receive assistance from defense counsel with criminal law expertise from the very beginning. If you have received a bargaining demand from a subcontractor's union, or a notice from the Labor Relations Commission regarding employer status under the Yellow Envelope Act, your options for response will only narrow as time passes. Before the matter escalates into a criminal risk, review your situation and plan your response together with Decent Law Firm.
2026-07-09
