Guidance for Employers in Korea on the Coronavirus Outbreak

South Korea has been reported to be the site of the world’s second-largest outbreak of COVID-19, or “new coronavirus.” According to the Korean Centers for Disease Control and Prevention (the “KCDC”), the number of confirmed patients as of March 6, 2020 is 6,284. And the growing number of confirmed cases has been the subject of extensive reporting worldwide. See, for example, “Coronavirus Updates: Epidemic Slows in China but Spreads Globally,” The New York Times, available at this link.

The Korean government has explained that, to identify patients and slow the spread of new coronavirus, as many as 15,000 diagnostic tests are being conducted on a daily basis, which may partially explain the rapid increase of confirmed cases. Among other measures, many public facilities such as schools and daycare centers have been temporarily closed, and the Ministry of Employment and Labor (“MOEL”) has published guidelines for how businesses should act during this outbreak. The English and Chinese versions of the latest guidelines (published February 24, 2020) are now available online at MOEL’s website. For ease of reference, you can find the English guidel ines at this link.

Below, we highlight measures that employers in Korea should take to protect their employees and themselves during this outbreak, and other issues to be aware of.

Private Employers’ General Obligations

Private employers’ most notable obligations regarding the new coronavirus outbreak under relevant statutes such as the Labor Standards Act, the Occupational Safety and Health Act, the Infectious Disease Control and Prevention Act, and the Civil Act, are as follows:

• Employers have a general duty to provide a safe workplace, and can be liable to employees for civil damages if any workplace injury or illness is caused by the employer’s negligence.

• Employers also are required to prohibit or restrict the work of an employee who is infected by a contagious disease, in accordance with the diagnosis of a medical doctor.

• Employers are required to report any detected cases of an infectious disease—which would include new coronavirus—to a public health clinic.

• Employers are required to comply with any orders issued by competent government authorities (such as the Ministry of Health and Welfare or relevant regional government) to take protective measures against an infectious-disease outbreak. Such measures may include temporarily shutting down a workplace and disinfecting it 

Government Guidelines

Beyond the minimum legal obligations imposed on employers, the government has issued guidance for employers to effectively respond to the coronavirus outbreak.

Some notable recommendations to follow are these:

• In the event of a confirmed or suspected case (explained below) of coronavirus in the workplace, the
employer should immediately have the relevant person wear a mask and segregate that person from
others in an isolated place. Others who have been in close contact should also be segregated.

• The employer should report the confirmed or suspected case to a public health clinic, or the KCDC (dial
1339) immediately.

• The employer should also inform all other employees in the place of business (including on-site
contractors and dispatched workers) of the occurrence.

• The government will send disease-control staff to disinfect the potentially exposed areas of the workplace,
and may shut down those areas until the following day.

The government’s guidelines define a “suspected” case of coronavirus to mean:

• A person with fever (over 37.5°C) or respiratory symptoms (coughing, sore throat, etc.) within 14 days of
visiting China (including Hong Kong and Macao).

• A person with fever or respiratory symptoms within 14 days of contact with a confirmed patient with
symptoms.

• A person suspected of pneumonia per a doctor’s opinion.

Payment of Wages to Absent Employees

If the government orders a workplace to be shut down due to a confirmed or suspected case of coronavirus, the employer is not legally required to pay any wages to the employees who work at the shut-down location. However, the government recommends providing employees with pay to the extent possible. If an employer closes down a work location or otherwise mandatorily places any employees on leave at its own initiative without any confirmed or suspected case—for example, as a mere precaution due to fears of the coronavirus or because of loss of business due to the coronavirus—the employer must pay a “shutdown allowance” of at least 70% of an employee’s average wages or 100% of the employee’s ordinary wages,
whichever is lower.

Even if the workplace itself is not shut down, if an employee is unable to work due to being hospitalized/quarantined as a confirmed or suspected carrier of new coronavirus, the employer is not legally required to pay wages for the period in which the employee cannot work. However, again, employers are recommended to pay to the extent possible, and can apply for a government subsidy of up to KRW130,000 (about US$100) per day to support offering paid leave to those confirmed or suspected employees. If an employer applies for such subsidies, it is legally required to actually grant paid leave at least equal to the subsidy to the employee as a condition of receiving the subsidy. In other cases, an employee can choose to use annual leave or sick leave if any is available for use or allowed under company policy.

Separate Subsidy Available for Employees

Since January 1, 2020, employers have been required to allow employees who have served at least one year to use individual days from their statutory annual maximum 90 days of unpaid “family-care leave,” for the purpose of taking care of sick or elderly family members, or taking care of children (see our prior news alert on this topic here). As a temporary measure specific to the coronavirus outbreak, if employees use their unpaid family-care days off to take care of their young children (eight (8) years of age (or in the 2nd grade of elementary school) or younger) whose schools have been shut down, or other family members who have been quarantined, they can apply for temporary government subsidy (KRW50,000 or US$35 per day) for up to 5 days

Expanded Employment Retention Subsidy

In order to support businesses that are suffering economic harm from the new coronavirus outbreak, the government has temporarily eased the eligibility requirement and increased the amount of the “employment retention subsidy” available under Korea’s unemployment-insurance system to employers who refrain from downsizing during tough times but are forced to adapt by cutting hours (by at least 20% during one month) or putting employees on extended leave for at least one month.

When an employer orders any employees not to work or to work fewer hours than normal (e.g., due to a full or partial workplace shutdown), the employer is still required, subject to certain exceptions, to pay the 70% “shutdown allowance” as discussed above. The “employment retention subsidy” helps defray the cost of the shutdown allowance for an employer that meets the above criteria.

The maximum subsidy is KRW66,000 (about US$55) per employee per day, for 180 days per year. Within that maximum, the actual subsidy amount is based on the amount of the shutdown allowance paid to each employee, at a rate that depends on whether the company is a larger company, or a small business eligible for preferential support. This maximum subsidy amount per person has not changed in response to the new coronavirus outbreak, but the subsidy rate within the cap has been increased temporarily for the period from February 1, 2020 to July 31, 2020.

The new coronavirus outbreak is a fluid and rapidly evolving situation, and we recommend that employers keep up to date with alerts from the government and outside advisors. Additionally, we offer a few other issues to consider:

• If it has not been done already, designate a person or people responsible for paying attention to guidance issued by the government, on an ongoing basis, and ensuring it is reviewed and implemented as appropriate.

• When collecting information from employees or even visitors regarding their travel histories or health conditions, it is advisable to obtain their consent to such collection of their personal information pursuant to Korea’s privacy laws.

• Consider whether flexible working arrangements such as telecommuting, or flexible or staggered working hours, could be used to reduce the number of employees congregating at the workplace at a given time. But bear in mind that even employees who work from home are generally subject to the same workinghours limits and overtime-pay rules as they would be in the office, but with less supervision and control

By Sang Wook Oho, Partner, Soojung Lee, Foreign Attorney and Christopher Mandel, Foreign Attorney, Yulchon LLC, Korea, a Transatlantic Law International Affiliated Firm.

For further information or for any assistance please contact korealabor@transatlanticlaw.com 

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