S. Korea’s labor laws too strict: think tank

South Korea’s penalties for violating labor regulations are exceptionally strict compared with those in other major economies, think tank data showed Thursday.

According to the Korea Economic Research Institute, affiliated with the Federation of Korean Industries, employers in Asia’s fourth-largest economy face jail terms of up to two years or fines of up to 20 million won ($17,976) if they violate the law that sets a maximum number of working hours.

The United States has no sanctions at all for the same offense, whereas key European states only hand down fines. Germany and Britain impose jail terms only in cases of repeated breaches or refusal to pay fines.

In Japan, whose regulatory framework is similar to Korea’s, the maximum penalty is a jail term of six months or a fine of 300,000 yen ($2,734).

Those nations tend to offer greater flexibility on labor, making it easier for employers to abide by the rules, KERI added.

Korea also has strict rules regarding wage payment, setting a relatively high minimum wage and imposing strong penalties for employers that do not comply.

The country’s minimum wage was 63 percent of the median wage level as of end-2019, significantly higher than the US’ 32 percent, Japan’s 44 percent or Germany’s 48 percent. The figures in Britain and France respectively stood at 55 percent and 61 percent, data showed.

KERI also said the enhanced rules to be imposed on employers after industrial accidents -- which can involve jail terms of a year or more -- were too harsh.

“We need to adjust the level of sanctions for labor rule violations so as to match the global standard,” said a KERI official.

The nation’s leading business associations, including the FKI, are calling for the weakening of the industrial disaster law that is slated to take effect next year.

By Bae Hyun-jung (tellme@heraldcorp.com)