🚨 Indefinite-term Contract Workers

Today Korean Social News for Beginners | 2025.08.12

0️⃣ Mandatory Conversion for Ultra-short-time Workers and Employment Market Changes

📌 Even 2-Year Ultra-short Part-time Jobs Must Convert to 'Indefinite-term Contracts'… Job Stability vs Reduction Concerns

💬 The government plans to require by law that ultra-short-time workers (less than 15 hours per week) convert to indefinite-term contracts after working at the same workplace for 2 years or more. Starting in the second half of this year, contracts for less than 15 hours per week will be virtually banned in the public sector. While the goal is to eliminate blind spots in labor rights, there are concerns that employers might end contracts before 2 years, leading to 'employment reduction.' Elderly public jobs and short-term part-time work at small businesses are expected to be significantly affected. This is considered an important policy change that needs to find a balance between strengthening non-regular worker protection and realistic concerns about employment reduction.

💡 Summary

• Indefinite-term contract workers are employees without fixed contract periods.
• Workers with less than 15 hours per week must convert to indefinite-term contracts after 2+ years of service.
• The goal is to improve job stability, but there are concerns about employment reduction side effects.

1️⃣ Definition

Indefinite-term contract workers refers to an employment type without a fixed contract period. Unlike fixed-term workers, they have no contract expiration date, making dismissal difficult without special reasons, and can receive relatively stable employment.

While providing job stability similar to regular workers, there may be differences in wages and benefits. The indefinite-term contract conversion system is used as a policy tool to solve employment instability for non-regular workers and encourage long-term employment.

💡 Why is this important?

• It's a key system to improve job stability for non-regular workers.
• It significantly affects workers' life stability and career development.
• It directly impacts employers' labor costs and employment policies.
• It's an important policy tool for improving Korea's dual employment market structure.

2️⃣ System Changes and Current Status

📕 Mandatory Conversion of Ultra-short-time Workers to Indefinite-term Contracts

• Existing exception rules will be abolished. Key changes include:

  • Previously, ultra-short-time workers (less than 15 hours per week) were excluded from mandatory indefinite-term contract conversion after 2 years.
  • The new policy mandates indefinite-term contract conversion after 2+ years regardless of working hours.
  • Workers with repeated contracts at the same workplace are also included in conversion targets.
  • This will provide new protection for about 2 million ultra-short-time workers.

• Stronger regulations apply in the public sector. Key contents include:

  • New contracts for less than 15 hours per week at public institutions will be virtually banned from the second half of this year.
  • Existing contract workers must either increase working hours to 15+ hours per week or end their contracts.
  • This aims to improve treatment through weekly holiday pay and various benefits.
  • The intention is for the public sector to become a model for the private sector and improve the overall employment market.

📕 Major Affected Areas and Concerns

• Elderly public job programs are expected to be severely affected. Key current status includes:

  • Currently, most public interest elderly jobs operate for 20 hours or less per week.
  • If working hours increase, the number of participants may significantly decrease due to budget shortages.
  • Due to elderly characteristics, long working hours are difficult, so jobs themselves may disappear.
  • This raises concerns about worsening elderly poverty and social isolation.

• Employment reduction is feared at small businesses. Key problems include:

  • Small business owners are likely to choose contract termination before 2 years due to labor cost burdens.
  • Additional cost burdens from mandatory weekly holiday pay and retirement pay are significant.
  • Short-term part-time hiring may decrease especially at convenience stores, cafes, and small restaurants.
  • While so-called 'split employment' practices will decrease, there's also risk of overall job reduction.

💡 Key Issues in Mandatory Indefinite-term Contract Conversion

1. Job Stability vs Job Reduction: Possibility of paradoxical employment reduction due to strengthened protection
2. Employer Burden: Business difficulties for small companies due to increased labor costs
3. Elderly Jobs: Sustainability issues for elderly-specific job models
4. Legal Effectiveness: Concerns about system avoidance through repeated contracts under 2 years
5. Gradual Application: Need for progressive improvement rather than sudden changes

3️⃣ Expected Effects and Side Effect Prospects

✅ Strengthened Worker Rights Protection Effects

• Non-regular worker protection will be greatly expanded. Key effects include:

  • Ultra-short-time workers who previously received no legal protection will be guaranteed stable employment.
  • They can enjoy basic worker rights like weekly holiday pay, annual leave, and retirement pay.
  • They can be protected from employers' arbitrary contract termination.
  • Opportunities for skill improvement and career development through long-term employment will increase.

• Structural improvement of the employment market is expected. Key changes include:

  • The gap between non-regular and regular workers is expected to narrow.
  • Employers will reduce tricky employment practices to save labor costs.
  • This can lead to improved worker productivity and long-term corporate competitiveness.
  • Society-wide employment quality improvement effects are expected.

✅ Realistic Concerns and Response Plans

• Employment reduction and economic side effects are concerning. Key problems include:

  • Employers are likely to avoid the system by terminating contracts before 2 years.
  • Especially during economic downturns, they may avoid indefinite-term contract conversion rather than regular hiring.
  • Short-term job opportunities for youth and elderly may decrease.
  • This may lead to business closures or employment reduction at small companies.

• Careful government policy design is needed. Key measures include:

  • Labor cost support or tax benefits for small businesses should be considered.
  • Budget expansion and program reform for elderly job projects are needed.
  • Gradual implementation should be considered to minimize market shock.
  • Monitoring systems and strengthened penalties to prevent system avoidance are required.
  • Sufficient education and promotion for both employers and workers must be conducted.

4️⃣ Related Terms

🔎 Act on Protection of Fixed-term and Part-time Workers

• This is key legislation to protect the rights of non-regular workers.
  • The Act on Protection of Fixed-term and Part-time Workers, enacted in 2007, was established to protect working conditions and prohibit discrimination for fixed-term and part-time workers. It mandates conversion to indefinite-term or regular contracts when employers use fixed-term workers for more than 2 years.
  • Key contents of the law include: First, limiting fixed-term worker usage to 2 years in principle. Second, prohibiting discrimination between regular and fixed-term workers performing the same work. Third, applying the same non-discrimination principle to part-time workers. Fourth, stipulating sanctions like fines for violations.
  • However, previously, ultra-short-time workers (less than 15 hours per week) were excluded from mandatory indefinite-term contract conversion after 2 years. The current government policy aims to abolish this exception to provide equal protection for all workers.

🔎 Weekly Holiday Pay

• Wages paid for one paid holiday per week.
  • Weekly holiday pay refers to paid holiday allowances given when workers attend all scheduled workdays in a week and work 15+ hours per week. According to the Labor Standards Act, employers must guarantee at least one paid holiday per week on average and pay wages for it.
  • Weekly holiday pay calculation method is (daily scheduled working hours × hourly wage). For example, for a worker earning 10,000 won per hour working 8 hours a day, 5 days a week, weekly holiday pay would be 80,000 won. This is an important wage component that accounts for a significant portion of total weekly pay.
  • Previously, workers with less than 15 hours per week were excluded from weekly holiday pay, so many employers intentionally limited working hours to under 15 hours per week to save labor costs through 'split employment.' This system change is expected to significantly reduce such practices.

🔎 Public Interest Elderly Jobs

• A representative elderly social participation support program operated by the government.
  • Public interest elderly jobs are a type of elderly job program supervised by the Ministry of Health and Welfare, targeting people aged 65 and older who receive basic pensions. They mainly perform simple tasks beneficial to the public within 30 hours per month (3 hours daily, 10 days monthly), receiving up to 270,000 won monthly in activity fees.
  • Main activity areas include: First, supporting vulnerable groups through activities like safety checks for elderly living alone and meal delivery. Second, public facility volunteer work at libraries, parks, and government offices. Third, environmental cleanup activities like street cleaning and flower bed maintenance. Fourth, education and counseling support including child safety guidance and traffic control.
  • While this program is important for elderly social participation and income supplementation, significant changes are expected due to the mandatory 15+ hours per week work requirement. If working hours increase, the number of participants may decrease due to budget shortages, or programs themselves may be reduced as long working hours are difficult for the elderly.

5️⃣ Frequently Asked Questions (FAQ)

Q: Do indefinite-term contract workers receive the same treatment as regular workers?

A: Job stability is similar, but there may be differences in wages and benefits.

• Indefinite-term contract workers receive job stability similar to regular workers since their contracts have no fixed period. Dismissal is difficult without special reasons, and long-term employment is possible. They also receive the same basic worker rights under the Labor Standards Act, including annual leave, weekly holiday pay, and retirement pay. However, there may be differences in wage levels, promotion opportunities, and benefit packages compared to regular workers. This varies according to company personnel regulations and policies, and while discrimination for the same work is legally prohibited, gaps often exist in reality.
• Therefore, indefinite-term contract conversion is a significant improvement in job stability, but expecting full regular worker-level treatment is difficult. However, it's definitely beneficial for workers compared to existing fixed-term positions.

Q: How can workers respond if employers end contracts before 2 years?

A: There are legal remedies for unfair contract termination, but prevention is more important.

• While it's not illegal for employers to intentionally terminate contracts before 2 years to avoid indefinite-term conversion, it can be problematic if they repeatedly make short-term contracts or unfairly terminate contracts without justification. First, unfair dismissal without justification under the Labor Standards Act is invalid, so workers can apply for relief to the Labor Relations Commission. Second, violations of the Fixed-term Act result in fines, and corrective orders can be issued for discriminatory treatment. Third, collective responses through labor unions or help from civic organizations are possible.
• However, prevention is most important. It's good to accurately prepare and keep contracts, and maintain records of work performance. Also, sharing information with colleagues and learning about labor laws and rights in advance is necessary. The government is also strengthening monitoring systems to prevent such system avoidance, so gradual improvement is expected.

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