We receive many requests for drafting Korean independent contractor agreements, and we sometimes decide with the client that it is better to have a Korean distribution or agency agreement with a Korean company, because of uncertainty in Korean Labor & Employment Law and other reasons. Korea’s court decisions on Korean Labor Law are as predictable as the Korean weather, and the standard to determine if one is an independent contractor or an “employee” is as clear as a Beijing sky. For a further explanation of this issue, see:  Korean Independent Contractor Risks and Audit Proof your Independent Contractor Expenses.
Korean Ministry of Employment & Labor

The factors a Korean Court shall, typically, look at to determine if one is an “employee” and thus not an “independent contractor” are:

  • Does the company have decision-making power over the content of the work of the individual?
  • Are company rules of employment applied to the individual?
  • Does the individual have business risks associated with working with the company?
  • Does the company have substantial control over the work processes of the individual?
  • Does the company set the time and date and other specifics of the work of the individual?
  • Does the company own the work assets of the individual?
  • Can individuals use a third party to replace the work of the individual?
  • Are earnings based on work, not success/sales?
  • Does the individual nearly exclusively depend on the work from the particular company?
  • Is the work with the company continuous, thus, not temporary?
  • Is the individual deemed an employee under the Social Security System?

We have written a good deal about distribution agreements on this blog in the past. Please take a look at these, below, articles for more details on doing business in Korea, Korean employment law, and distribution and agency agreements.

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Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. He is ranked, for Korea, as a Top Attorney and his law firm is ranked a top dispute resolution law firm.

You may schedule an initial free consultation with our Attorney at: Schedule a Call with an Attorney in Korea to discuss establishing or expanding your business into Korea.