🚨 Standard Employment Contract

Today Korean Social News for Beginners | 2025.10.31

0️⃣ OTT Industry Shift and Decline in Labor Conditions, Employment Contract Requirements

📌 Film Staff Move to OTT... 'Standard Employment Contract' Practice Collapses, Working Conditions Worsen

💬 As the film industry declined, many staff members moved to OTT-based drama and series production sites, and the practice of writing 'standard employment contracts' that had been established in the film industry is falling apart. According to the Korean Film Council, the usage rate of standard employment contracts dropped sharply from 66% in 2022 to 37.8% in 2024, while service contracts more than doubled during the same period. Staff members complain of increased working hours, no insurance coverage, and decreased job security. The government is considering making standard employment contracts mandatory. Minister of Culture, Sports and Tourism Choi Hwi-young stated, "We will address the reality that the standard employment contract practice has collapsed."

💡 Summary

• A standard employment contract is a contract that clearly states work conditions like wages and working hours using a standard format.
• As film staff moved to the OTT industry, usage rates dropped sharply from 66% to 37.8%.
• The increase in service contracts has led to longer work hours, no insurance coverage, and worsening working conditions.

1️⃣ Definition

A standard employment contract is a written contract that clearly states the key terms of the employment relationship between workers and employers, written according to the standard format provided by the Ministry of Employment and Labor. It clearly states wages, working hours, break times, holidays, job duties, and whether the four major insurances apply.

Article 17 of the Labor Standards Act requires employers to clearly state major working conditions in writing when making an employment contract. The standard employment contract is a standard format to meet this legal requirement, and it protects workers' rights and makes employers' legal responsibilities clear.

💡 Why is this important?

• It prevents disputes by clearly stating work conditions in writing and protects workers.
• It can reduce problems like unpaid wages and unfair dismissal that violate labor rights.
• Workers can receive legal rights like the four major insurances and compliance with working hours.
• It removes the unclear nature of verbal contracts and makes legal responsibilities clear.

2️⃣ Current Status and Problems of the Standard Employment Contract System

📕 Background of System Introduction and Development Process

• The system was introduced after the financial crisis when irregular workers increased. The main timeline is as follows:

  • After the 1997 financial crisis, irregular workers increased rapidly and problems from verbal contracts became serious.
  • Unpaid wages, unfair dismissals, and non-compliance with work conditions happened frequently.
  • In 2004, the government introduced the standard employment contract system to protect workers.
  • The Ministry of Employment and Labor began providing standard formats for different types like regular workers, fixed-term workers, and part-time workers.
  • Through this, they tried to reduce disputes from not writing contracts and protect workers' rights.

• In the film industry, it was fully introduced starting in 2018. The main points are as follows:

  • The Korean Film Council and the Film Workers Union pushed for a system to make using standard employment contracts mandatory at production sites starting in 2018.
  • It was an effort to improve the poor working conditions and unclear contract practices in the film industry.
  • The usage rate gradually increased, reaching 66% by 2022.
  • This was evaluated as an important achievement in improving working conditions in the film industry.

📕 Moving to the OTT Industry and Collapse of Practices

• As the film industry declined, staff members moved to the OTT industry in large numbers. The main situation is as follows:

  • The film industry declined due to decreasing theater audiences and reduced film production.
  • On the other hand, drama and series production by OTT platforms like Netflix, Disney Plus, and Tving increased greatly.
  • Film staff moved to OTT-based production sites looking for work.
  • However, in the broadcasting and drama industry, service contract-centered practices continued.

• The usage rate of standard employment contracts dropped sharply. The main problems are as follows:

  • The usage rate dropped by almost half, from 66% in 2022 to 37.8% in 2024.
  • During the same period, service contracts more than doubled.
  • At OTT production sites, the film industry's standard employment contract practice is not being followed.
  • Staff members increasingly sign contracts as 'freelancers' or 'service providers'.
  • Because of this, they are in a blind spot where they don't receive protection under the Labor Standards Act.

📕 Worsening Working Conditions and Staff Difficulties

• Working hours are increasing greatly. The main problems are as follows:

  • With service contracts, working hour limits are not clear, so long working hours have become normal.
  • Break times and holidays are often not properly guaranteed.
  • The 52-hour weekly maximum under the Labor Standards Act doesn't apply, leading to overwork.
  • Physical and mental health problems are getting worse.

• Insurance coverage rates are declining. The main problems are as follows:

  • When classified as a service contract, employers have no obligation to provide the four major insurances (national pension, health insurance, employment insurance, industrial accident insurance).
  • Staff members must register as individual business owners and pay insurance premiums themselves.
  • The financial burden increases, and some people give up on insurance coverage.
  • When industrial accidents happen, they don't receive compensation, or when unemployed, they can't receive employment insurance benefits.
  • It's difficult to prepare for old age, threatening long-term life stability.

• Job security has greatly decreased. The main problems are as follows:

  • As short-term contracts by project repeat, employment instability is getting worse.
  • It's difficult to receive legal protection against unfair dismissal or contract termination.
  • Even when wage theft happens, legal response is complicated and difficult.
  • The capacity to invest in career management and skill development is decreasing.

💡 Main Problems of Standard Employment Contract Collapse

1. Weakened legal protection: Increase in blind spots not receiving protection under the Labor Standards Act
2. Increased working hours: Long working hours become normal as the 52-hour weekly maximum doesn't apply
3. No insurance coverage: Individual burden increases and the social safety net weakens
4. Job instability: Employment instability worsens with short-term contracts by project
5. Risk of wage theft: Difficulties in legal response and limits in protecting rights

3️⃣ Government Response Plans and Future Tasks

✅ Government's Direction for System Improvement

• Plans to make standard employment contracts mandatory are being considered. The main plans are as follows:

  • The Ministry of Culture, Sports and Tourism announced it will fully review labor practices in the film and video industry.
  • Minister Choi Hwi-young emphasized, "We will address the reality that the standard employment contract practice has collapsed."
  • Plans are being made to make using standard employment contracts mandatory at OTT production sites as well.
  • They want to create an effective system in cooperation with the Korean Film Council.

• Standards for judging worker status need to be clarified. The main directions are as follows:

  • Even with service contracts, if there is actual supervision and direction, it should be considered an employment contract.
  • The Ministry of Employment and Labor should clarify standards for judging worker status to prevent disguised service contracts.
  • If production companies set working hours, give work instructions, and designate locations, they should be recognized as workers.
  • Through this, actual workers should be able to receive legal protection.

✅ Industry-level Improvement Tasks

• OTT platforms need to play a responsible role. The main tasks are as follows:

  • OTT platforms should have a sense of responsibility for working conditions at production sites.
  • When ordering content production, they should guarantee appropriate production costs so labor costs are properly paid.
  • They should include clauses requiring the use of standard employment contracts in contracts with subcontractors.
  • They should check labor practices at production sites through regular monitoring.

• Industry self-regulation and education need to be strengthened. The main plans are as follows:

  • Production company associations and labor unions should cooperate to establish voluntary labor standards.
  • Labor law education should be provided to production company representatives and managers.
  • Staff should also be educated about their rights and how to respond to unfair treatment.
  • Best practices should be discovered and shared to improve awareness across the industry.

✅ Plans to Strengthen Protection of Workers' Rights

• Supervision and punishment need to be strengthened. The main directions are as follows:

  • The Ministry of Employment and Labor should strengthen labor supervision of video industry production sites.
  • Those who don't write standard employment contracts, don't provide insurance coverage, or commit wage theft should be strictly punished.
  • Fines of up to 5 million won for violating Article 17 of the Labor Standards Act should actually be imposed.
  • For habitual or malicious cases, additional sanctions like disclosing workplaces should be considered.

• Worker support systems need to be expanded. The main tasks are as follows:

  • Windows should be established where people can easily report and receive relief when they experience wage theft or unfair dismissal.
  • Practical help like legal consultation and lawsuit support should be provided.
  • The system should be improved so staff working as freelancers or service contracts can also join industrial accident insurance.
  • The scope of employment insurance coverage should be expanded so people can receive life support even when unemployed.

4️⃣ Related Terms Explained

🔎 Labor Standards Act Article 17

• This is the legal provision that requires employment contracts to be stated in writing.
  • Article 17 of the Labor Standards Act requires employers to clearly state major working conditions like wages, regular working hours, holidays, and annual paid leave in writing and provide them to workers when making employment contracts. Violating this results in a fine of up to 5 million won.
  • Required items to state include: First, wage components, calculation methods, and payment methods. Second, regular working hours (daily and weekly working hours) must be stated. Third, matters related to holidays and vacations must be recorded. Fourth, workplace and duties must be made clear. Fifth, if the employment contract period is set, that period must also be stated.
  • This provision is the minimum legal device to protect workers' rights. With only verbal contracts, proof is difficult when disputes occur, and workers can be harmed by employers' arbitrary interpretations. Written contracts prevent such problems and make working conditions clear, guaranteeing the rights and duties of both sides. If you don't receive a contract, you can report to the Ministry of Employment and Labor or the Labor Relations Commission.

🔎 Service Contract

• This is a work delegation contract between businesses, a different form from employment contracts.
  • A service contract is a contract where one business delegates specific work to another business and pays for it. Legally, it is not an employment contract but corresponds to a 'contract for work' or 'delegation contract', and the Labor Standards Act doesn't apply. The contractor (person who takes the work) performs work independently and the premise is that they don't receive supervision and direction from the client.
  • Characteristics of service contracts include: First, there's no working hour limit, so the 52-hour weekly maximum under the Labor Standards Act doesn't apply. Second, the client has no obligation to provide the four major insurances, and contractors must join themselves. Third, they don't receive protection for minimum wage law, retirement pay, holidays and vacations. Fourth, contract termination or changes to work conditions are relatively free.
  • The problem is 'disguised service contracts' where people are actually workers but formally sign service contracts. If employers set work hours, give work instructions, and designate workplaces, there is actually a supervision and direction relationship and they should be recognized as workers. Courts judge worker status by looking at the actual substance of work performance, not the format of contracts. Therefore, even with service contracts, if the substance is an employment relationship, you can claim rights under the Labor Standards Act.

🔎 Four Major Insurances

• This is a social insurance system for workers' life stability.
  • The four major insurances collectively refer to national pension, health insurance, employment insurance, and industrial accident insurance, which are social safety nets for workers' old age, illness, unemployment, and disasters. When employers hire workers, they must join the four major insurances, and insurance premiums are shared between the company and workers (industrial accident insurance is fully paid by the company).
  • The role of each insurance is: First, national pension is a public pension to guarantee old age life, with workers aged 18 to 60 as coverage targets. Second, health insurance is medical insurance that reduces medical expenses when sick or injured. Third, employment insurance supports life stability and re-employment when unemployed, providing unemployment benefits and job training. Fourth, industrial accident insurance pays treatment costs and compensation when injured at work.
  • There's a problem that four major insurance coverage becomes difficult when working with service contracts. Employers avoid the obligation to provide coverage with the reason 'they are not workers', and contractors registered as individual business owners must pay all insurance premiums themselves. Especially for industrial accident insurance and employment insurance, individual business owners can voluntarily join, but many give up on coverage due to the high premium burden. This leads to situations where they receive no protection when accidents or unemployment happen, creating blind spots in the social safety net.

🔎 Worker Status

• This is the standard for judging whether someone corresponds to a 'worker' under the Labor Standards Act.
  • Worker status is the concept of judging whether, regardless of the name or form of a contract, there is actually a relationship of providing labor under the employer's supervision and direction and receiving wages as compensation. When courts judge worker status, they look at the actual substance of work performance, regardless of whether the contract title is 'service contract' or 'contract for work'.
  • Main standards for judging worker status include: First, whether the employer determines and directs work content. Second, whether the employer sets and manages work hours and location. Third, whether supervision and direction are received during work performance. Fourth, whether compensation is for labor or for completion of work. Fifth, whether there is economic independence like holding a business registration certificate or having an independent office.
  • Staff at OTT production sites mostly perform work at set times and locations according to production companies' instructions, so they are highly likely to actually correspond to workers. Even if contracts are service contracts, if the substance is an employment relationship, they can receive protection under the Labor Standards Act and claim rights like four major insurance coverage, retirement pay, and annual leave. If companies refuse this, you can file a complaint with the Ministry of Employment and Labor or take legal action.

5️⃣ Frequently Asked Questions (FAQ)

Q: My company only gives me a service contract and doesn't give me an employment contract. Is this legal?

A: If you are actually a worker, it's illegal, and you can claim rights under the Labor Standards Act.

• Even if the contract name is 'service contract', you should judge by looking at the actual substance of work performance. First, if the company sets and manages attendance times, you are a worker. Second, if the company directs and supervises work content and methods, it's an employment relationship. Third, if you work using the company's equipment and facilities, you are highly likely to be viewed as a worker. Fourth, if compensation is paid based on time or days worked, it has the nature of wages. If these conditions are met, even with a service contract, the substance is an employment contract, so the Labor Standards Act applies.
• If recognized as a worker, you can enjoy rights like four major insurance coverage, 52-hour weekly working hour limit, minimum wage guarantee, retirement pay, and annual leave. If the company refuses this, you can file a complaint with the Ministry of Employment and Labor's civil affairs portal (minwon.moel.go.kr) or the nearest regional employment and labor office. It helps to prepare evidence like attendance records, work instruction details, and pay statements.

Q: What items must I check when writing a standard employment contract?

A: You must check wages, working hours, holidays, job duties, and whether the four major insurances are provided.

• Key items to check when writing a standard employment contract are as follows. First, wage-related matters. Check if basic pay, various allowances (meal, transportation, etc.), bonuses, payment date, and payment method are clearly stated. Especially be careful if basic pay and allowances are combined and marked together, as this can be disadvantageous when calculating retirement pay or overtime pay. Second, working hours. Check how many hours per day and per week you work, when attendance and departure times are, and how much break time is given. Third, holidays and vacations. Check weekly rest days (usually Sunday), paid holidays like national holidays, number of annual leave days and how to use them. Fourth, you should see if job duties and workplace are clearly stated.
• There are additional items to check. Fifth, if there is a contract period, check the start and end dates. It's good to check contract renewal conditions in advance. Sixth, be sure to check whether the four major insurances are provided and when coverage starts. Seventh, check retirement pay payment conditions. If you work continuously for more than 1 year, you have the right to receive retirement pay. Eighth, it's good to check contract termination or dismissal conditions. Contracts must be made in two copies, with the company and worker each keeping one copy, and check signatures or seals.

Q: How can I protect my rights if I want to work at film or drama production sites?

A: It's good to carefully check contracts and get help from labor unions or associations.

• Film or drama production sites are environments where it's difficult to protect workers due to the nature of short-term contracts by project. Ways to protect yourself are as follows. First, be sure to get a contract. Don't just trust verbal promises, write a written contract and keep one copy yourself. The contract should state production period, job duties, work hours, pay, payment timing, and whether the four major insurances are provided. Second, make wage payment conditions clear. Check when payment will be made after filming ends, whether it's split payment or lump sum payment, and if possible, request interim settlement.
• Third, join related organizations like the Film Workers Union or Broadcasting Staff Association and get help. These organizations support providing standard contract formats, legal consultation, and dispute mediation. Fourth, check whether the four major insurances are provided, and if not, join industrial accident insurance yourself. Production sites have high accident risks, so industrial accident insurance is essential. Fifth, keep records of work details. If you organize attendance times, work content, and wage payment details, it will be helpful in case of disputes. Sixth, if you experience wage theft or unfair treatment, immediately report to the Ministry of Employment and Labor or request help from labor unions. It's important to actively claim your rights rather than endure silently.

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