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ENFORCEMENT DECREE OF THE FRAMEWORK ACT ON LABOR WELFARE

This translation of Korea's labor laws is intended mainly as

a convenience to the non-Korean-reading public. If any questions arise related to the accuracy of the information contained in the translation, please refer to the official Korean version of the laws. Any discrepancies or differences created in the translation are not binding and have no legal effect for compliance or enforcement purposes.

* This Decree reflects only the amendments made until

October 31, 2011

ENFORCEMENT DECREE OF THE FRAMEWORK ACT ON LABOR WELFARE Presidential Decree No. 17434, Dec. 27, 2001

Amended by Presidential Decree No. 18312, Mar. 17, 2004

Presidential Decree No. 21214, Dec. 31, 2008

Presidential Decree No. 21765, Oct. Presidential Decree No. 22269, Jul.

1, 2009

12, 2010

Presidential Decree No. 22493, Nov. 15, 2010

Presidential Decree No. 22516, Dec.

7, 2010

Presidential Decree No. 22806, Mar. 30, 2011

Presidential Decree No. 22946, May. 30, 2011

Articl e 1 (Purpose)
The purpose of this Decree is to prescribe matters delegated by the Framework Act on Labor Welfare and matters necessary for the enforcement thereof.
Articl e 2 (Provision of Materials and Use of Electronic Network )
(1) “Materials, such as a certificate of labor income, etc., prescribed by the Presidential Decree" in Article 10 (1) of the
Framework Act on Labor Welfare (hereinafter referred to as the
"Act") refer to the following materials : Provided that if materials specified in any of the following subparagraphs can
be checked through the sharing of administrative information
under Article 36 (1) of the Electronic Government Act, such check may substitute for the provision of materials:
1. Certificates of labor income;
2. Transcripts and abstracts of resident registration;
3. Family relation certificates;
4. Certificates of local tax payment by tax item;
5. Transcripts of vehicle and construction machinery original register;
6. Transcripts of building and land register;
7. Transcripts of corporation register; and
8. Other documents from which the location and property of a worker can be found out.
(2) The Minister of Employment and Labor may create a link to, and use, the information system under Article 6-2 (2)
of the Social Services Act to check materials pursuant to paragraph (1). <Newly Inserted by Presidential Decree No. 22806, May 30, 2011>
Articl e 3 (I nsti tutions Engaging i n Loan Acti vi ties)
"Other financial companies prescribed by the Presidential Decree” in Article 11 (1) 2 of the Act refer to financial companies specified in any of the following subparagraphs:
1. National Agricultural Cooperation Federation under the
Agricultural Cooperatives Act;
2. National Federation of Fisheries Cooperation under the
Fisheries Cooperatives Act;
3. Korea Development Bank under the Korean Development
Bank Act;
4. Industrial Bank of Korea under the Industrial Bank of
Korea Act;
5. Community credit cooperatives and the Korean Federation thereof under the Community Credit Cooperatives Act; and
6. Financial securities companies under the Capital Markets and Financial Investment Services Act.
Article 4 (Fee for Credit Guarantee for Worker)
(1) The guarantee fee prescribed in Article 24 of the Act may be differentiated after taking into consideration the
credibility of the person whose credit is guaranteed, guaranteed amount, guarantee period, etc.
(2) Necessary matters concerning the amount of the guarantee fee under paragraph (1) and the collection thereof shall be determined by the Minister of Employment and Labor.
Articl e 5 (Entrustment of R i ght to I ndemni f y)
(1) Financial companies, etc., to which the Korea Workers' Compensation and Welfare Service (hereinafter referred to as the "Corporation") under the Industrial Accident Compensation
Insurance Act may entrust the exercise of the right to indemnity pursuant to Article 26 (3) of the Act shall be institutions engaging in loan activities as specified in Article 11 of the Act,
and credit information companies under subparagraph 5 of
Article 2 of the Use and Protection of Credit Information Act.
(2) If the exercise of the right to indemnity is entrusted in accordance with paragraph (1), the entrustment fee and other
necessary matters shall be determined by the Corporation after approval by the Minister of Employment and Labor.
Articl e 6 (D isposal of D ef i cits)
If the Corporation is unable to recover debts, even after exercising the right to indemnity pursuant to Article 26 (3) of
the Act, due to reasons falling under any of the following
subparagraphs, it may write off such debts:
1. Where exercising the right to indemnity is difficult as the debtor died, disappeared or went missing or was granted immunity under Articles 566 and 625 of the Debtor
Rehabilitation and Bankruptcy Act;
2. Where the debtor is incapable of repaying the debts;
3. Where the statute of limitations on the right to indemnify expires; and
4. Where the expenses required for recovering the debts
exceeds the estimated debt amount, so there is no benefit to be gained from executing the legal procedures.
(2) If the Corporation is to write off debts pursuant to
paragraph (1), it shall investigate and check the whereabouts and property of the debtor through the
relevant local government or competent tax office and
other related administrative agencies : Provided that this shall not apply if the amount of indemnity is less than
100,000 won.
Articl e 7 (O verdue I nterest)
(1) Overdue interest under Article 27 of the Act shall be set at the highest rate (20/100 of the annual interest rate in case where the highest rate exceeds 20/100 of the annual interest
rate) among the overdue interest rates on loans charged by the relevant financial company at the time when the Corporation fulfills guaranteed obligations.
(2) The Minister of Employment and Labor may lower the maximum overdue interest rate prescribed in paragraph (1) after considering the market interest rate, employment situations, etc.
Articl e 8 (Establishment, etc. of Employee Stock Ownership
Association)
(1) A preparatory committee on the establishment of an employee stock ownership association under Article 33 (1) of
the Act (hereinafter referred to as "preparatory committee on
the establishment of an association") shall perform duties described in any of the following subparagraphs:
1. Drawing up of the rules;
2. Consultation with the company on matters prescribed by
the Ordinance of the Ministry of Employment and Labor;
3. Holding of an inaugural meeting of the employee stock ownership association (hereinafter referred to as
"association"); and
4. Other duties necessary for the establishment of an association.
(2) The preparatory committee on the establishment of an
association shall hold an inaugural meeting of the association with a majority of workers in attendance, affirm the rules of the
association and elect its officers including its representatives.
(3) Within three weeks after completing the procedures prescribed in paragraph (2), the preparatory committee on the establishment of an association shall sign an agreement on the entrustment of the administration of an employee stock ownership plan, with a trustee under Article 43 (1) of the Act.
(4) Within three weeks after signing an agreement on the entrustment of the administration of an employee stock ownership plan with a trustee pursuant to paragraph (3), the preparatory committee on the establishment of an association shall inform the Minister of Employment and Labor of this along with the rules referred to in paragraph (1), as prescribed by the Ordinance of the Ministry of Employment and Labor.
(5) The Minister of Employment and Labor may issue a letter of confirmation to the association with regard to the facts informed by the preparatory committee on the establishment of an association pursuant to paragraph (4) under the conditions prescribed by the Ordinance of the Ministry of Employment and Labor.
Articl e 9 (Af f il i ated Companies)
Affiliated companies (hereinafter referred to as “affiliated companies”) under Article 34 (1) 2 of the Act refer to those falling under any of the following subparagraphs:
1. An unlisted corporation 50/100 or more of whose issued shares are owned by a joint-stock company where an association is set up (hereinafter referred to as "company implementing an employee stock ownership plan") and
2. An unlisted corporation 50/100 or more of whose issued shares are owned by an unlisted corporation specified in subparagraph (1).
Articl e 10 (Memb ership Requirements of Employee S tock Ownership
Associ ati on)
(1) “Minority shareholders prescribed by the Presidential
Decree” in the proviso to Article 34 (2) 2 of the Act refer to workers of the company implementing the relevant employee stock ownership plan, affiliated company or contract company under Article 34 (1) 2 of the Act, who are shareholders owning shares worth 300 million won or 1/100 of the total value of the relevant shares issued, whichever is less. In this case, the amount shall be calculated based on the face value.
(2) “Persons prescribed by the Presidential Decree” in Article
34 (2) 4 of the Act refer to those falling under any of the following subparagraphs:
1. Largest shareholders under Article 9 (1) 1 of the Capital
Markets and Financial Investment Services Act;
2. Persons with a special relationship with the largest shareholders under items A through I of subparagraph 1 of Article 8 of the Enforcement Decree of the Capital
Markets and Financial Investment Services Ac; andt
3. Daily workers under Article 20 of the Enforcement Decree of the Income Tax Act.
Articl e 11 (Contents of R ul es)
The rules under Article 35 (2) 1 of the Act shall include the following matters:
1. Purpose;
2. Title;
3. Location of the principal and branch offices;
4. Matters concerning the officers of the association
5. Matters concerning the method of exercising voting rights
6. Matters concerning the creation and use of an employee stock ownership association fund (hereinafter referred to
as “association fund”);
7. Matters concerning the acquisition and allocation of company stocks by the association
8. Matters concerning the withdrawal of deposited shares; and
9. Matters concerning the disposition of remaining assets in the case of dissolution of the association.
Articl e 12 (Holdi ng of G eneral M eeting)
(1) The representative of an association shall hold a general meeting at least once every year pursuant to Article 35 (4) of the Act: Provided that if there is no matter subject to resolution
under Article 35 (2) of the Act, a public notification of the operational status of the association in accordance to its rules may substitute for the holding of a general meeting.
(2) The representative of an association shall, if requested by
one-fifth or more of the members of the employee stock ownership association (hereinafter referred to as “association
members”) by specifying matters to be referred to the general meeting, hold a general meeting within three weeks after such request.
(3) Paragraph (2) shall apply mutatis mutandis to the convening of a meeting of delegates under Article 35 (3) of the Act. In this case, “general meeting” shall be regarded as “meeting of delegates” and “association members” as “delegates”.
Articl e 13 (Compositi on and O perati on of Commi ttee on O perati on of Empl oyee S tock O wnership Pl an)
(1) A committee on the operation of an employee stock ownership plan under Article 35 (6) of the Act (hereinafter referred to as "operating committee") shall be composed of
members representing the company implementing the employee stock ownership plan and members representing the association, and the number of members shall be two or more but not
more than ten, respectively.
(2) Necessary matters concerning the organization and operation of the operating committee shall be determined
through consultation between the company implementing the employee stock ownership plan and the association.
(3) The company implementing the employee stock ownership plan and the association shall sign an agreement on
the results of the consultation to facilitate the implementation of consulted matters.
Articl e 14 (O perati on of Associ ati on)
(1) In allocating company stocks under Article 36 (4), Article
37 and Article 38 or granting employee stock options under Article 39 (hereinafter referred to as "employee stock options"), low-income workers and long-serving workers shall be given priority.
(2) The fiscal year of an association shall coincide with the fiscal year of the company implementing the employee stock ownership plan.
Articl e 15 (Handl i ng of D i vi dends)
(1) Dividends (including stock dividends; hereinafter the same shall apply in this Article) on the stocks allocated to the account of an association member shall be paid to the association member holding the relevant account.
(2) Dividends on the stocks held in the account of the
association shall belong to the association.
Articl e 16 (Fi nanci al Compani es Providi ng Custody or
D eposit-tak ing S ervi ces)
(1) "A financial company, etc., prescribed by the Presidential Decree" in Article 36 (2) of the Act are provided for in the following subparagraphs:
1. Banks under the Banking Act;
2. Insurance companies under the Insurance Business Act;
3. Financial securities companies under the Capital Markets and Financial Investment Services Act;
4. Mutual savings banks under the Mutual Savings Bank
Act; and
5. Other financial companies established to provide deposit-taking services under other relevant Acts.
Articl e 17 (Usage of Associ ati on Fund)
When an association uses the association fund pursuant to Article 36 (3) of the Act, the funds accumulated by the end of the previous fiscal year (excluding the amount of money used to
repay the loans under Article 42 (1) of the Act and interest thereon) shall be used to acquire company stocks within six months after the start of the current fiscal year : Provided that
this shall not apply if there are reasons prescribed by the Ordinance of the Ministry of Employment and Labor, such as the designation of company stocks as securities under supervision, etc.
Articl e 18 (Acq ui siti on of Company S tock s b y Associ ati on)
If an association acquires company stocks for its members, it shall ensure the interests of all of its members.
Articl e 19 (All ocation of Company S tock s b y Associ ati on)
(1) If an association intends to allocate the company stocks acquired pursuant to Article 37 of the Act, it shall comply with
the following criteria:
1. Company stocks falling under any of the following items shall be allocated to the accounts of the association members immediately upon acquisition:
A. Company stocks acquired through contribution of company stocks by the company, shareholders, etc., or with the financial resources under subparagraphs 1, 2 and 5 of Article 36 (1) of the Act;
B. Company stocks acquired with the loans borrowed without signing an agreement under Article 42 (2) of
the Act among the financial resources under Article 36 (1) 3 of the Act; and
C. Company stocks acquired by way of an issue of bonus shares on the company stocks allocated to the accounts of the association members.
2. The company stocks acquired with the loans borrowed after signing an agreement under Article 42 (2) of the Act among the financial resources under Article 36 (1) 3 of the Act, and the company stocks acquired by way of an issue of bonus shares on such company stocks shall be held in the account of the association, and if the loans have been repaid, company stocks corresponding to the amount of the repaid loans shall be immediately allocated to the accounts of the association members; and
3. The company stocks acquired with the financial resources under Article 36 (1) 4 of the Act shall be held in the account of the association, and if the loans that come due first has been repaid, such company stocks plus company stocks corresponding to the amount of the first loan payments shall be allocated to the accounts of the association members.
(2) In allocating the company stocks acquired with the financial resources referred to in subparagraphs 1 and 5 of Article 36 (1) of the Act, if an employee who was an association member at the time of the formation of the relevant fund retires prior to the date of acquisition of the company stocks due to reasons prescribed by the Ordinance of the Ministry of Employment and Labor, such as the mandatory retirement age, etc., the company stocks shall be allocated to the said association member.
Articl e 20 (Empl oyee S tock O pti ons)
(1) If the total number of stocks up to which employee stock options may be granted pursuant to Article 39 (1) of the Act is calculated, the number of stocks specified in any of the following subparagraphs shall be included in the calculation:
1. The number of stocks granted in accordance with the proviso to Article 39 (1) of the Act; and
2. The number of stocks to be issued or transferred in the case of exercising the employee stock options granted prior to the date of resolution under Article 39 (1) of the Act and the proviso thereto but not exercised as of the date of resolution.
(2) “A consecutive service period prescribed by the Presidential
Decree” in Article 39 (6) of the Act means one year.
(3) "The period prescribed by the Presidential Decree” in the proviso to Article 39 (8) of the Act means three years from the date of acquisition of the stocks.
(4) A company which intends to grant employee stock options (hereinafter referred to as a “company granting employee stock options”) shall make a contract containing the following matters with the association. In this case, the association shall make the contract available for inspection by its members and notify individual members of the main contents of the contract, the number of employee stock options granted to each member, etc:
1. Matters concerning the exercise price of employee stock options and adjustments thereof;
2. Period for offering and exercising employee stock options;
3. Method of and procedure for exercising employee stock options;
4. Statements indicating that the transfer and offering, etc., of employee stock options as collateral is restricted;
5. Implementation deadline for the company granting employee stock options upon the exercise of employee stock options
6. Type and number of stocks to be issued or transferred upon the exercise of employee stock options; and
7. Matters concerning the cancellation of a grant of employee stock options.
(5) The exercise price of employee stock options shall be set at 80/100 or more of the appraisal price prescribed by the
Ordinance of the Ministry of Employment and Labor: Provided that if in the case of issuing and distributing stocks, the exercise price is lower than the face value of the stocks
concerned, the face value shall serve as the exercise price.
(6) A company granting employee stock options may divide the offering period into six-month or one-year unit periods and
set an exercise period for each unit period, and the exercise period shall be not more than seven days after the last day of the offering period or last day of each unit period.
(7) The number of employee stock options that can be exercised by an association member per exercise period shall be a number obtained by dividing equally the number of employee
stock options granted during the relevant offering period. In this case, the employee stock options that were not exercised
during the relevant exercise period shall not be carried forward. (8) If an association member has lost his/her qualifications,
he/she shall be prohibited from exercising his/her employee stock options.
(9) A company granting employee stock options may provide support for association members to accumulate money necessary
for exercising employee stock options to the association fund by means of payroll deduction, etc.
Articl e 21 (B orrowi ng b y Associ ati on)
(1) “A financial company, etc., prescribed by the Presidential
Decree” in Article 42 (1) of the Act are provided for in the following subparagraphs:
1. Banks under the Banking Act;
2. Insurance companies under the Insurance Business Act;
3. Financial securities companies under the Capital Markets and Financial Investment Services Act;
4. Mutual savings banks under the Mutual Savings Bank
Act;
5. Employee welfare fund corporations under Article 52 (2)
of the Act; and
6. Other financial companies established to provide lending and deposit-taking services under relevant Acts.
(2) An association shall, when taking out a loan under Article
42 (2) of the Act, satisfy all of the following requirements:
1. Matters regarding a loan and its repayment between the company implementing the employee stock ownership
plan and the association shall be agreed upon in writing. In this case, the board of directors of the company implementing the employee stock ownership plan shall
pass the relevant resolution in advance;
2. The aggregate amount of loans shall not exceed the total amount of wages (referring to wages subject to income
taxes; hereinafter the same shall apply in this subparagraph) of the association members in the preceding fiscal year, and the loan in any fiscal year shall
not exceed 10/100 of the total amount of wages of the association members in the preceding fiscal year of the company, multiplied by the borrowing period (calculated
as the number of years and a period of less than one year shall be counted as one year) of the relevant loan under subparagraph 3;
3. The borrowing period shall be three years or more but
not more than seven years and, even if a new loan is taken out to repay an existing loan, the borrowing period
shall not exceed the remaining borrowing period of the existing loan; and
4. 10/100 or more of the remaining amount of the loan shall be repaid at the end of every preceding fiscal year throughout the borrowing period.
Articl e 22 (T rustee)
(1) “A trustee prescribed by the Presidential Decree” in
Article 43 (1) of the Act refers to a company prescribed by the Ordinance of the Ministry of Employment and Labor from among financial securities companies authorized under Article
324 of the Capital Markets and Financial Investment Services
Act.
(2) An association shall deposit the company stocks acquired by the association or its members with a trustee specified in
paragraph (1) within one month from the base date of acquisition prescribed by the Ordinance of the Ministry of Employment and Labor.
Articl e 23 (D eposi t Period of Company S tock s)
(1) "A period prescribed by the Presidential Decree” in parts other than each subparagraph of Article 43 (2) of the Act refers to a period determined in accordance with the following
classification;
1. Company stocks acquired using the financial resources specified in subparagraphs 1 and 5 of Article 36 (1) of the
Act : a period determined in consultation with the contributor, which shall be four years or more but shall not exceed eight years;
2. Company stocks acquired using the financial resources
specified in Article 36 (1) 2 of the Act: one year;
3. Company stocks acquired using the loans borrowed without signing an agreement under Article 42 (2) of the Act
among the financial resources specified in Article 36 (1) 3 of the Act: one year;
4. Company stocks acquired using the loans borrowed after signing an agreement under Article 42 (2) of the Act among the financial resources specified in Article 36 (1) 3
of the Act, and allocated to the accounts of the
association members pursuant to Article 37 of the Act:
one year;
5. Company stocks acquired using the financial resources specified in Article 36 (1) 4 of the Act and allocated to
the accounts of the association members pursuant to
Article 19 (1) 3: one year;
6. Company stocks acquired with the money contributed by association members if the company implementing the
employee stock ownership plan cooperates in the contribution by association members pursuant to the
proviso to Article 43 (2) 2 of the Act and contributes
50/100 or more of the money contributed by association members : a period determined in consultation with the
company implementing the employee stock ownership plan, which shall be one year or more but shall not exceed four years; and
7. Company stocks acquired by way of an issue of bonus
shares on the company stocks allocated to the accounts of the association members : the remaining deposit period of
the company stocks eligible for the relevant issue of bonus shares : Provided that the stocks may not be deposited if the remaining deposit period from the date
of distributing bonus shares is less than three months.
(2) The company stocks acquired by exercising the right to subscribe to new shares on the company stocks deposited
pursuant to each subparagraph of paragraph (1) with the money contributed by association members may not be deposited.
Articl e 24 (Provi sion of D eposi ted Company S tock s as Col l ateral)
(1) "Such cases as prescribed by the Presidential Decree" in the proviso to Article 43 (3) of the Act refer to the following cases: Provided that among company stocks specified in
subparagraphs 1 and 7 of Article 23 (1), those whose remaining
deposit period exceeds one year shall be excluded from this:
1. Where an association offers the company stocks acquired with a loan as collateral to the lender of such loan and
the loan guarantor thereof pursuant to Article 42 (3) of the Act;
2. Where an association member uses the company stocks allocated to the account of the association member as collateral to take out a loan for purchasing company stocks;
and
3. Where an association member uses the company stocks allocated to the account of the association member as collateral to take out a loan for livelihood security.
Articl e 25 (Wi thdrawal of Company S tock s)
(1) "The reasons prescribed by the Presidential Decree, such as the dissolution of the employee stock ownership association
or the death of its member, etc.” in Article 44 (1) of the Act refer to any of the following reasons:
1. Dissolution of the association under Article 47 (1) of the
Act;
2. Death of an association member;
3. Retirement of an association member; and
4. Other cases prescribed by the Ordinance of the Ministry of Employment and Labor, where the withdrawal of company
stocks is inevitable, such as the exercise of the right to
request purchase of shares, etc.
(2) Company stocks that can be withdrawn by an association member pursuant to subparagraphs 3 and 4 of paragraph (1) shall be limited to stocks whose remaining
deposit period is one year or less, and company stocks whose remaining deposit period exceeds one year shall be retrieved by the association and allocated to another association member in
accordance to the rules of the association: Provided that in cases prescribed by the Ordinance of the Ministry of Employment and Labor, such as the mandatory retirement age,
etc., company stocks whose remaining deposit period exceeds one year may be withdrawn by an association member.
Articl e 26 (Preemptive Purchase of Wi thdrawn S tock s)
(1) If an association or its member pre-emptively purchases the company stocks withdrawn under Article 44 (2) of the Act, the purchase price shall be calculated in accordance with the
following classification:
1. Stocks of a listed corporation : the closing market price formed on the securities market on the day before the
withdrawal of the company stocks (the trading price on the day of withdrawal in case there is no closing market price); and
2. Stocks of an unlisted corporation: the price agreed upon by the trading parties in consideration of the acquisition price as prescribed in Article 27 (1) (the price agreed
upon by the trading parties in case there is no acquisition price)
(2) If no agreement is reached on the purchase price in case of subparagraph 2 of paragraph (1), the association shall return, without delay, the stocks concerned to the association member.
Articl e 27 (B uyb ack Pri ce)
(1) If a company implementing an employee stock ownership plan, which is an unlisted corporation, acquires company stocks
pursuant to Article 45 (3) of the Act, matters necessary for the
acquisition, such as the stock price, time for price determination, and application period, etc. shall be determined through
consultation between the company and the association.
(2) When determining an acquisition price pursuant to paragraph (1), the company implementing the employee stock
ownership plan and the association may consider the appraisal
prices specified in the following subparagraphs:
1. The appraisal price of a trustee under Article 43 (1) of the Act
2. The appraisal price of an accounting corporation registered under Article 24 of the Certified Public Accountant Act;
3. The appraisal price under Article 63 of the Inheritance
Tax and Gift Tax Act; and
4. The appraisal price of a credit rating agency licensed by the Financial Services Commission under Article 4 of the Use and Protection of Credit Information Act.
Articl e 28 (Exerci se of V oti ng R i ghts b y Association)
(1) When the representative of an association exercises voting rights pursuant to Article 46 (1) of the Act, the voting rights
related to the stocks allocated to the accounts of association members shall be exercised in accordance with the following methods:
1. The representative shall set a period of seven days or longer, and after receiving opinions from association members on the agenda of a general meeting, or seeing
whether the delegation of a voting right was requested, shall exercise the relevant voting right or delegate it to association members within that period; and
2. The voting rights of stocks for which there is no opinion nor a request for delegation within the period prescribed in paragraph (1) shall be exercised in a way not to affect
the voting of the number of stocks involved in the relevant shareholders meeting minus the number of shares for which there is neither opinion nor a request for
delegation.
(2) When exercising the voting rights related to the stocks held in the association account, the representative of the association shall do so in accordance with a method prescribed
by the rules through consultation between the association and the company implementing the employee stock ownership plan
from among the following methods:
1. The voting rights shall be exercised in proportion to the percentage of association members expressing opinions on
the stocks allocated to the accounts of association members pursuant to subparagraph 1 of paragraph (1):
2. The voting rights shall be exercised in a way not to affect the voting of the number of stocks involved in the
relevant shareholders meeting minus the number of
shares held in the association account: and
3. The voting rights shall be exercised in accordance with opinions determined at a general meeting of association members.
Articl e 29 (R eport, etc., of D i ssol uti on of Associ ati on)
(1) If an association is dissolved pursuant to Article 47 (1) of the Act, the liquidator shall report it to the Minister of
Employment and Labor, specifying the reason for such dissolution, within three weeks of the date of dissolution.
(2) "A period prescribed by the Presidential Decree” in the proviso to Article 47 (1) 4 of the Act refers to a period
determined in accordance with the following classification:
1. Where the association or its members in an affiliated company or a contract company own the company stocks of
the relevant affiliated company or contract company: the
period during which the company stocks are deposited with a trustee prescribed in Article 22 (1); and
2. Where association members hold employee stock options:
the offering period for the employee stock options.
Articl e 30 (Appl ication, etc., f or Authorizati on of Estab li shment of
Empl oyee Wel f are Fund Corporati on)
(1) A person who intends to obtain authorization for the establishment of an employee welfare fund corporation
(hereinafter referred to as "fund corporation") under Article 52
of the Act shall submit to the Minister of Employment and
Labor an application for such authorization, along with the following documents attached thereto, under the conditions prescribed by the Ordinance of the Ministry of Employment and
Labor:
1. Articles of incorporation;
2. Employment certificates of the members of the preparatory committee for the establishment of the fund
corporation (hereinafter referred to as "preparatory committee")
or other documents proving their identity;
3. A written confirmation of contributions to the employee welfare fund or a property list;
4. Business plans and budget statements; and
5. Other documents determined by the Minister of
Employment and Labor.
(2) If the Minister of Employment and Labor authorizes the establishment of a fund corporation pursuant to paragraph (1),
he/she shall record the following matters in the fund
corporation register, and issue a authorization certificate to the applicant:
1. Number and date of authorization;
2. Name of the fund corporation and location of its office;
3. Names and titles of the members of the employee welfare fund council (hereinafter referred to as "welfare fund council"); and
4. Other matters deemed necessary by the Minister of
Employment and Labor.
(3) An application for authorization of the establishment of a fund corporation shall be processed within 20 days from the
date of receiving the application.
(4) The fund corporation register referred to in paragraph (2) shall be prepared and managed electronically unless there is a special reason why it cannot be processed electronically.
Articl e 31 (M atters to b e Contai ned in Arti cl es of I ncorporation)
(1) The articles of incorporation of a fund corporation under
Article 52 (4) of the Act shall contain the following matters:
1. Objectives;
2. Name;
3. Locations of its principal and branch offices;
4. Matters concerning the creation, management methods, time of contribution and accounting of the employee welfare
fund;
5. Matters concerning the welfare fund council, directors and auditors;
6. Matters concerning the methods of exercising directors'
right of representation;
7. Matters concerning the business of the fund corporation and beneficiaries;
8. Matters related to the operation of the selective welfare system under Article 46 (3) in case where such system is
operated;
9. Matters concerning the amendment of the articles of incorporation;
10. Matters concerning the integrated operation of the fund
corporation's projects and other welfare projects;
11. Matters concerning the ownership of real estate necessary for the performance of the fund corporation's business;
12. Matters concerning its meetings;
13. Matters concerning the methods of disclosing the management and operation status of the fund corporation; and
14. Matters concerning the dissolution of the fund corporation.
(2) The first articles of incorporation drawn up shall be signed or sealed by each member of the preparatory committee.
Articl e 32 (R egistration, etc., of Estab li shment of Fund
Corporati on)
(1) The registration of the establishment of a fund corporation under Article 52 (6) of the Act shall be made in the area where the principal office of the fund corporation is
located within three weeks after obtaining a certificate of authorization for the establishment under Article 30 (2).
(2) Matters required to be registered for the establishment of a fund corporation under paragraph (1) are as follows:
1. Objectives;
2. Name;
3. Locations of its principal and branch offices;
4. Total amount of basic assets;
5. Names and addresses of directors; and
6 Matters concerning its representation
(3) With regard to the contents of the registration of the establishment under paragraph 1, the Minister of Employment
and Labor shall check a certificate verifying the registered matters of the corporation through the sharing of administrative information under Article 36 (1) of the Electronic Government Act.
Articl e 33 (Registration of Establishment of Branch Office)
(1) If a fund corporation establishes a branch office, it shall register the relevant matters with the competent registry office
in accordance with the following classification:
1. Registry office having jurisdiction over the location of the principal office : the name and location of the branch office
shall be registered within three weeks from the date of establishment of the branch office : Provided that if the branch
office is established at the same time when the fund corporation is established, the name and location of the branch office shall be registered when the establishment of the fund corporation is
registered;
2. Registry office having jurisdiction over the location of the newly established branch office : the matters specified in Article
32 (2) shall be registered within three weeks from the date of establishment of the branch office; and
3. Registry office having jurisdiction over the location of a different branch office already established : the name and
location of the newly established branch office shall be
registered within three weeks from the date of establishment of the new branch office.
(2) If a branch office is established in the same district
covered by the registry office having jurisdiction over the location of the principal office or a different branch office, only
the name and location of the branch office shall be registered
within three weeks from the date of establishment of the branch office.
Articl e 34 (R egi strati on of T ransf er)
(1) If a fund corporation transfers its principal office or branch office to a district under the jurisdiction of a different
registry office, it shall register the date of transfer and new
locations in the previous and the matters specified in Article 32 (2) in the new location within three weeks from the date of
transfer.
(2) If a principal office or branch office is transferred within the jurisdiction of the same registry office, the new location and
date of transfer shall be registered within three weeks from the date of transfer of the principal office or branch office.
Articl e 35 (R egi strati on of Alterati on, etc.)
(1) A fund corporation shall, if there is an alteration to matters falling under any of the subparagraphs of Article 32 (2)
(excluding subparagraph 4), register the alteration within three weeks.
(2) A fund corporation shall, if there is any change to the total amount of basic assets referred to in Article 32 (2) 4,
report the contents of the change to the Minister of
Employment and Labor within three weeks.
(3) Article 32 (3) shall apply mutatis mutandis with regard
to the confirmation of the contents of registration after registration of the establishment of a branch office, registration
of transfer and registration of alteration under Article 33, Article
34 and paragraph (1).
Articl e 36 (D ocuments to b e Attached)
When a registration is made pursuant to Article 32 (1) and Articles 33 through 35, the relevant documents shall be attached in accordance with the following classification:
1. Registration of establishment under Article 32 (1) : articles of incorporation of, and certificate of authorization for the establishment of, the fund corporation;
2. Registration of the establishment of a branch office under Article 33 : documents proving the establishment of the relevant branch office;
3. Registration of transfer under Article 34 : documents proving the transfer of the office; and
4. Registration of alteration under Article 35 : documents proving the relevant alteration.
Articl e 37 (Procedure f or R egi strati on of Fund Corporati on)
The registration of a fund corporation shall conform to the procedures for registration and the examples of raising an
objection under the Commercial Registration Act unless otherwise specially provided for by this Decree.
Articl e 38 (Appl i cati on f or Authorizati on of Amendment of
Arti cl es of I ncorporation)
(1) A person who intends to obtain authorization for the amendment of the articles of incorporation of a fund
corporation under Article 53 of the Act shall submit to the
Minister of Employment and Labor an application for such authorization along with the following documents attached there
to, under the conditions prescribed by the Ordinance of the
Ministry of Employment and Labor:
1. An explanatory statement for the amendment of the articles of incorporation;
2. The amended articles of incorporation (along with a comparison chart of the old and new articles of incorporation);
and
3. A copy of the minutes of the welfare fund council meeting relating to the amendment of the articles of
incorporation.
(2) Article 30 (1) and (2) shall apply mutatis mutandis with
regard to the procedures for application for authorization of the amendment of articles of incorporation and the issuance of such
authorization. In this case, "authorization for the establishment of a fund corporation" shall be read as "authorization for the amendment of the articles of incorporation of a fund
corporation", "application for authorization of the establishment of a fund corporation" as "application for authorization of the amendment of the articles of incorporation of a fund
corporation", "if the establishment of a fund corporation is authorized" as "if the amendment of the articles of incorporation of a fund corporation is authorized", and "certificate of
authorization for the establishment of a fund corporation" as "authorization for the amendment of the articles of incorporation of a fund corporation".
(3) An application for authorization of the amendment of articles of incorporation shall be processed within seven days from the date of receiving the application.
Articl e 39 (Election of Work ers' M emb ers)
(1) The members representing workers under Article 55 (2)
of the Act (hereinafter referred to as "workers' members") shall be elected by the workers by direct, secret and unsigned ballot:
Provided that in such cases as prescribed in any of the
following subparagraphs, they shall be elected in accordance with the following classification:
1. Where there is a trade union composed of a majority of
workers : the representative of the trade union and the persons elected by the trade union shall be elected as workers'
members;
2. Cases deemed inevitable due to the characteristics of business : the number of electors who elect workers' members
(hereinafter referred to as "members' electors") shall be elected
in proportion to the number of workers of each department, and then workers' members shall be elected by a majority of
members' electors by direct, secret and unsigned ballot.
(2) Procedure for the election of workers' members and registration and qualifications of candidates shall be determined by the welfare fund council.
Articl e 40 (S ub stitute M emb er)
(1) In the event of a vacancy in the position of a member of a welfare fund council, a substitute member shall be appointed or elected within 30 days.
(2) If a business has no trade union composed of a majority
of workers and a vacancy occurs in the position of a workers' member, the runner-up chosen based on the number of votes
won by candidates in the previous workers' member election may fill the vacancy.
Articl e 41 (Chairperson)
(1) A welfare fund council shall has a chairperson, and the chairperson shall be elected from among its members by mutual vote.
(2) The chairperson shall represent the welfare fund council and have overall control over the business of the welfare fund council.
(3) The members representing the employer (hereinafter referred to as "employer's members") and workers' members shall have one secretary, respectively, in charge of clerical work, such as recording meeting results, etc.
Articl e 42 (Cal li ng of M eeti ngs)
(1) The chairperson shall convene meetings of the welfare fund council.
(2) If workers' members or employer's members request a
meeting to be convened, specifying in writing matters to be submitted to the meeting, the chairperson shall convene a
meeting without delay.
(3) The chairperson shall notify each member of the date, place and agenda of a meeting at least seven days before the meeting is held.
Articl e 43 (Q uorum)
A meeting of a welfare fund council shall be held with the attendance of a majority of workers' members and a majority of employer's members, and take a decision with the approval of two thirds or more of the members present.
Articl e 44 (O peni ng of M eeti ngs)
The meetings of a welfare fund council shall be open to the public : Provided that they may not be open to the public upon a resolution of the welfare fund council.
Articl e 45 (Contri b uti ons, etc., to Empl oyee Welf are Fund)
(1) If an employer contributes to the employee welfare fund pursuant to Article 61 (1) of the Act, he/she shall determine the time of contribution within 30 days from the date on which
the welfare fund council make the determination, and notify the welfare fund council of that time, and even in case an
employer makes contributions pursuant to Article 61 (2) of the
Act, he/she shall notify the welfare fund council before making such contributions.
(2) "Assets prescribed by the Presidential Decree" in Article
61 (2) of the Act refer to real estate necessary for the performance of the fund corporation's business under Article 67
of the Act and assets prescribed by the articles of incorporation.
(3) Necessary matters concerning the method of contribution, etc., under paragraph (1) shall be prescribed by the articles of incorporation.
Articl e 46 (Proj ects of Fund Corporati on and B enef i ciari es T hereof )
(1) A project of a fund corporation under Article 62 (1) and (3) shall be carried out in a way to benefit all workers and to give preference to low-income workers.
(2) "Projects prescribed by the Presidential Decree" in Article
62 (1) 7 of the Act refer to the following projects:
1. Support for the sports and cultural activities of workers;
2. Support for workers' day events; and
3. Other projects stipulated by the articles of incorporation as projects to support workers' wealth creation and assist
workers' livelihoods.
(3) If a fund corporation implements the projects referred to in Article 62 (1) of the Act, it may operate them through a
system of allowing each worker to make his/her own choice from among many welfare items according to his/her own preference and needs and receive welfare benefits (hereinafter
referred to as "selective welfare system").
(4) A fund corporation may use an amount determined in accordance with the following classification for employee welfare
fund projects pursuant to Article 62 (2) of the Act : Provided that the amount specified in subparagraph 2 shall apply only to projects with capital:
1. Where the employer, etc., has contributed any amount to the employee welfare fund in the relevant fiscal year of the employee welfare fund, an amount produced by multiplying the
contributed amount by a rate determined by the welfare fund council. In this case, the rate determined by the welfare fund council shall not exceed 50/100, and if a selective welfare
system is operated, the rate shall not exceed 80/100;
2. Where the sum of the assets contributed pursuant to Article 61 (1) and (2) of the Act and assets (hereinafter referred to as "basic assets") the welfare fund council has decided to
include in the contributed assets exceeds 50/100 of the capital of the relevant project, an amount determined by the welfare
fund council within the limits of the excess amount.
(5) "Cases prescribed by the Presidential Decree" in Article
62 (3) of the Act refer to the following cases:
1. Where a worker builds, purchases or rents a house;
2. Where a worker purchases company stocks;
3. Where the aim is to stabilize a worker's livelihood; and
4. Other cases prescribed by the articles of incorporation, which are deemed equivalent to those referred to in suparagraphs 1 through 3.
Articl e 47 (M anagement of Employee Wel f are Fund)
(1) "The limit prescribed by the Presidential Decree" in
Article 63 (4) of the Act refers to an amount determined by the welfare fund council within the range of 20/100 of the basic
assets.
(2) "Projects prescribed by the Presidential Decree" in Article
63 (5) of the Act refer to the following projects:
1. Purchase of shares issued by investment companies under the Capital Markets and Financial Investment Services Act; and
2. Purchase of shares issued by real estate investment companies under the Real Estate Investment Company Act.
Articl e 48 (Accounti ng Pri ncipl es f or Empl oyee Wel f are Fund)
The accounting of an employee welfare fund pursuant to Article 64 of the Act shall be done in accordance with the accounting principles for business enterprises so as to have an
accurate understanding of the state of its business performance and assets.
Articl e 49 (B udget and Fi nal Accounts of Empl oyee Wel f are Fund)
The budget of an employee welfare fund shall consist of general provisions, a projected balance sheet and a projected income statement, and supplementary statements necessary for
clarifying the contents thereof shall be prepared.
(2) The final accounts of an employee welfare fund for the relevant year shall consist of a balance sheet, an income
statement, a statement of appropriations of retained earnings, and so on, and supplementary statements necessary for clarifying the contents thereof shall be prepared.
Articl e 50 (D i scl osure concerni ng M anagement and O perati on of
Fund Corporati on)
The disclosure under Article 66 of the Act shall be done by means of the publication in a company newsletter, posting on a company bulletin board, etc.
Articl e 51 (Fund Corporation's O wnershi p of R eal Estate)
Cases where such ownership is necessary for the performance of its business under Article 67 of the Act are as
follows:
1. Ownership of an office and its affiliated facilities necessary for the operation and management of the fund
corporation;
2. Ownership of an in-house store;
3. Ownership of labor welfare facilities under Article 62 (1)
5 of the Act; and
4. Ownership of the real estate donated or contributed to the employee welfare fund : Provided that except in cases
where the real estate is donated or contributed for the purposes
specified in subparagraphs 1 through 3, the fund corporation shall not own it unless it is converted to conform to the
methods of managing the employee welfare fund under Article
63 of the Act within one year from the date of donation or contribution without justifiable reasons.
Articl e 52 (Noti f i cati on of D i ssol uti on of Fund Cooperati on)
When a fund corporation has been dissolved pursuant to Article 70 of the Act, the liquidator shall inform the Minister of Employment and Labor of it, specifying the reasons therefor.
Articl e 53 (Payment of Unpai d M oney and V al uab l es)
(1) For a fund corporation to pay the money and valuables unpaid by the employer to workers (hereinafter referred to as "unpaid money and valuables") out of its assets pursuant to
Article 71 (1) of the Act, the employer shall prove that he/she is unable to pay off the unpaid money and valuables.
(2) In the case of paying workers unpaid money and valuables under paragraph (1), if the assets of the fund
corporation are insufficient, the payment rate and method shall be determined by the welfare fund council.
Articl e 54 (D evolvement of R emai ni ng Assets)
If the remaining assets of a fund corporation is devolved to the Labor Welfare Promotion Fund under Article 87 of the Act
(hereinafter referred to as "Promotion Fund") pursuant to the proviso to Article 71 (2) of the Act, the liquidator of the fund
corporation shall submit a list of the remaining assets to the
Minister of Employment and Labor within three weeks after end of the liquidation, and transfer, without delay, the remaining assets to the Promotion Fund.
Articl e 55 (G uarantee of Anonymi ty to K eep Conf i denti ali ty)
"Cases prescribed by the Presidential Decree" under Article
83 (2) of the Act refer to cases where workers participating in an employee support program give their consent to the subjects or contents to be disclosed.
Articl e 56 (O ther R evenues)
Other revenues under Article 88 (1) 11 of the Act refer to those specified in the following subparagraphs:
1. Proceeds from labor welfare projects and the operation of
labor welfare facilities established and operated by the
State pursuant to Article 28 (1) of the Act; and
2. Other revenues recognized by the Minister of Employment and Labor.
Articl e 57 (Composition, etc. of Promotion Fund Management Council)
In order to deliberate on important matters concerning the operation and management of the Promotion Fund under Article
90 of the Act, a promotion fund management council (hereinafter referred to as the “Council”) shall be established within the Corporation.
(2) The Council shall be composed of not more than 15 members including one chairperson.
(3) The President of the Corporation shall assume the chairmanship of the Council and the members shall be appointed by the
President of the Corporation from among general public officials
who are in charge of duties relating to the Promotion Fund in the Ministry of Employment and Labor and members of the
senior civil service, general public officials who are in charge of
labor welfare budgets in the Minister of Strategy and Finance and members of the senior civil service, and persons falling
under any of the following subparagraphs:
1. Standing directors of the Corporation;
2. Persons representing workers;
3. Persons representing employers;
4. Persons recognized as having plenty of academic knowledge and experience in labor welfare; and
5. Persons recognized as having plenty of professional knowledge and experience with respect to the management
and operation of the Promotion Fund.
(4) The term of office for a member appointed by the
President of the Corporation and who is a person specified in subparagraphs 2 through 5 of paragraph (3) shall be two years: Provided that the term of office for a substitute member shall be
the remaining term of his/her predecessor.
(5) The Council shall deliberate on the following matters:
1. Establishment and implementation of a plan for the management of the Promotion Fund under Article 58;
2. Final accounts of the Promotion Fund under Article 59;
and
3. Other matters submitted by the chairperson of the Council to a Council meeting with regard to the management and operation of the Promotion Fund.
(6) Except for matters provided for in this Decree, necessary matters concerning the operation of the Council shall be determined by the chairperson after resolution at the Council.
Articl e 58 (Estab lishment of Promotion Fund M anagement Pl an)
(1) Every fiscal year the Corporation shall prepare a promotion fund management plan for the following year, and
obtain approval for the plan from the Minister of Employment and Labor no later than June 30 after deliberation at the Council.
(2) The Minister of Employment and Labor shall obtain approval for the promotion fund management plan approved
pursuant to paragraph (1) from the President after deliberation
at a cabinet meeting.
(3) The Corporation shall submit the promotion fund management plan for the following year, confirmed in accordance to paragraph (2), to the Minister of Strategy and
Finance no later than September 30.
(4) The promotion fund management plan under paragraph
(1) shall consist of general management rules and a fund management plan, and shall be accompanied by a promotion
fund formation plan, a projected balance sheet and a projected income statement.
Articl e 59 (Fi nal Accounts, etc. of Promoti on Fund)
(1) Every fiscal year the Corporation shall prepare a report on the final accounts of the Promotion Fund for the preceding
year and submit the report to the Minister of Strategy and Finance through the Minister of Employment and Labor by the end of February.
(2) When the report on final accounts is submitted under
paragraph (1), it shall be accompanied by the following documents:
1. Documents concerning an outline and analysis of the final accounts of the Promotion Fund;
2. Financial statements, such as a balance sheet and an
income statement, etc.;
3. Documents that prove cash revenue and expenditure, such as a revenue and expenditure statement, etc.; and
4. Other documents deemed necessary by the Minister of
Strategy and Finance for the verification of the accuracy of the final accounts of the Promotion Fund.
(3) If there is a surplus in the final accounts of the
Promotion Fund, the Corporation shall appropriate such surplus to cover the losses carried forward, and transfer the rest to the Promotion Fund.
Articl e 60 (O perati onal R ul es of Promotion Fund)
Except for matters provided for in this Decree, matters necessary for the management and operation of the Promotion
Fund shall be determined by the Corporation with the approval of the Minister of Employment and Labor. The same shall apply in case where an alteration is made to the approved matters.
Articl e 61 (Usage of Promotion Fund)
"Activities prescribed by the Presidential Decree” in subparagraph 17 of Article 91 of the Act refer to the following
projects:
1. Projects, such as retirement pension plans, etc., to support workers' livelihoods in old age; and
2. Projects included in the promotion fund management plan under Article 58 and deemed necessary by the Corporation after deliberation at the Council.
Articl e 62 (S upervi si on of M anagement of Promoti on Fund)
(1) The Corporation shall report to the Minister of Employment and Labor matters concerning the execution of the promotion
fund management plan and the management status of surplus
funds within 30 days after the end of each quarter.
(2) The Minister of Employment and Labor may, if deemed necessary for enhancing the efficiency and public nature of the management of the Promotion Fund, establish guidelines for
promotion fund management and have the Corporation comply with these guidelines.
Articl e 63 (R eport of O perati ng S tatus of Fund Corporation)
(1) A fund corporation shall report to the head of the competent local employment and labor office its operating status
and final accounts for the relevant year, its business plan for the following year (including its projected balance sheet and income statement) and the matters determined by the Minister
of Employment and Labor within three months after the end of each fiscal year pursuant to Article 93 (1) 3 of the Act.
(2) The head of the competent local employment and labor office who receives a report on the operating status, etc., of the
fund corporation under paragraph (1) shall report the contents
to the Minister of Employment and Labor no later than the tenth of the month following the end of each quarter.
Articl e 64 (D emand f or S ub mi ssi on of M ateri als, etc.)
(1) The demand for reporting or for submission of materials under Article 93 (1) or (2) of the Act shall be made in writing.
(2) If a corrective order or an order has been issued
pursuant to Article 93 (1) or (2) of the Act, the Minister of
Employment and Labor shall give a period prescribed by the Ordinance of the Ministry of Employment and Labor, and may extend the period once if there is an inevitable reason.
Articl e 65 (D el egati on and Entrustment of Authori ty)
(1) The Minister of Employment and Labor shall delegate the authority specified in any of the following subparagraphs to
the heads of local employment and labor offices pursuant to
Article 94 of the Act:
1. Acceptance of a report under Article 35 (8) and (9) of the
Act;
2. Acceptance of a report specified in the latter part of the
Article 47 (1) of the Act;
3. Authorization of the establishment of a fund corporation and authorization of the amendment of the articles of incorporation under Article 52 (4) and Article 53 of the
Act;
4. Order of correction under Article 69 of the Act;
5. Demand for a report concerning the business, accounting and assets of a fund corporation, examination of books,
documents, etc., and order of correction under Article 93
(1) 3 of the Act;
6. Demand for a report from an employer and association, issuance of an order, and investigation or examination of books, documents, etc, under Article 93 (2) of the Act;
7. Imposition and collection of fines for negligence under
Article 98 of the Act (Provided that this shall not apply to the imposition and collection of fines for negligence with
regard to institutions engaging in loan services, trustees prescribed in Article 43 of the Act, and recipients of subsidies or loans.);
8. Receipt of a notification of a preparatory committee on the establishment of an association under Article 8 (4) and issuance of a letter of confirmation under Article 8 (5);
9. Acceptance of a report on changes to the total amount of basic assets under Article 35 (2);
10. Receipt of a notification of the dissolution of a fund corporation under Article 52; and
11. Receipt of a list of remaining assets submitted under
Article 54.
(2) The Minister of Employment and Labor shall entrust the duties specified in any of the following subparagraphs to the Korea Workers' Compensation and Welfare Service pursuant to
Article 94 (2) of the Act:
1. Provision of livelihood stability funds under Article 19 of the Act;
2. Provision of scholarships or loans for school expenses
under Article 20 of the Act;
3. Support for employers' costs under Article 28 (4) of the
Act; and
4. Support for the costs of using private welfare facilities under Article 31 of the Act.
(3) The Minister of Employment and Labor shall entrust the Minister of Health and Welfare with the duties of requesting relevant agencies and organizations to provide
necessary materials pursuant to Article 10 (1) of the Act
in relation to the provision of livelihood stability funds under Article 19 of the Act and support for credit
guarantees under Article 22 of the Act. <Newly Inserted by
Presidential Decree No. 22806, May 30, 2011>
Articl e 66 (Procedure f or R eturni ng S ub si dies or Loans)
If subsidies or loans provided by the State or a local government are returned pursuant to Article 95 of the Act, the procedure therefor shall follow the examples of a return of
subsidies under the Act on the Budgeting and Management of
Subsidies.
Articl e 67 (Criteri a f or I mposi ti on of Fi nes f or Negl igence)
The criteria for the imposition of fines for negligence under
Article 98 of the Act are provided for in the attached Table.
<This ArticleWholly Amendedby Presidential DecreeNo. 22806, Mar.
30, 2011>

Addenda <Presidential Decree No. 22516, Dec. 7, 2010>

Articl e 1 (Enf orcement D ate)
This Decree shall enter into force on December 9, 2010.
Articl e 2 (R epeal of O ther D ecrees)
The Enforcement Decree on the Employee Welfare Fund Act shall be repealed.
Articl e 3 (Appl ication Example concerning D eposi t Peri od of
Company S tock s)
The amended provision of Article 23 (1) 6 shall apply to cases where a company implementing an employee stock ownership plan cooperates in the contribution of the association
members and contributes 50/100 of the amount contributed by the association members or more after this Decree enters into force.
Articl e 4 (T ransiti onal M easures concerni ng D i vi dends)
Dividends on shares provisionally alloted under the previous provision of Article 19 (1) 2 after October 1, 2005, the
enforcement date of the Enforcement Decree on the Framework
Act on Employee Welfare amended by Presidential Decree no.
19074, shall be paid to the association members as the relevant shares are considered to have been alloted to the individual accounts of the association members.
Articl e 5 (T ransiti onal M easures concerni ng B onus S hares)
(1) The amended provision of Article 19 (1) 3 of the
Enforcement Decree on the Framework Act on Employee
Welfare amended by Presidential Decree no. 19074 (hereinafter referred to as "same Enforcement Decree" in this Article) shall apply to the allotment of the company's own stocks acquired
with dividends on the company's own stocks that were acquired with loans taken out by the association before the enforcement of the same Enforcement Decree and are currently
held in the account of the association.
(2) The amended provision of Article 20 (1) 6 of the same
Enforcement Decree shall apply to the company's own stocks acquired through a issue of bonus shares for the company's
own stocks alloted to the individual accounts pursuant to subparagraphs 1 and 3 of Article 19 (1) of the previous Enforcement Decree (referring to the Enforcement Decree on the
Framework Act on Employee Welfare before the enforcement of the same Enforcement Decree; hereinafter the same shall apply in this Article).
(3) Bonus shares given out for the shares provisionally alloted under Article 19 (1) 2 of the previous Enforcement Decree after October 1, 2005, the enforcement date of the same
Enforcement Decree, shall be subject to the deposit period under the amended provision of Article 20 (1) 1 of the same Enforcement Decree as the provisionally alloted shares are
considered to have been alloted to the individual accounts on the date of provisional allotment of the relevant shares provisionally alloted pursuant to the amended provision of Article 19 (1) 1 C of the same Enforcement Decree.
Articl e 6 (T ransiti onal M easures concerni ng Fi nes f or Negli gence)
The application of the criteria for imposition of fines for negligence to offenses committed before this Decree enters into
force shall be governed by the previous provisions and the
previous Enforcement Decree of the Employee Welfare Fund Act notwithstanding the amended provisions of Table.
Articl e 7 (R evisi on of O ther D ecrees)
(1) Parts of the Enforcement Decree of the Certified Labor
Affairs Consultant Act shall be revised as follows:
"Framework Act on Employee Welfare" in subparagraph 14 of Table 1 shall be changed to "Framework Act on Labor
Welfare", and "Employee Welfare Fund Act" in subparagraph 15 of the same Article shall be deleted.
"Framework Act on Employee Welfare" in subparagraph 1 of
Table 2 shall be changed to "Framework Act on Labor Welfare". (2) Parts of the Enforcement Decree of the State Property
Act shall be revised as follows:
"Framework Act on Employee Welfare" in Article 40 (3) 10 shall be changed to "Framework Act on Labor Welfare".
(3) Parts of the Enforcement Decree of the Act on the
Formation and Operation of Agriculture, Forestry, Fisheries and
Food Investment Cooperative shall be revised as follows: "Employee Welfare Promotion Fund under Article 47 of the
Framework Act on Employee Welfare" in subparagraph 12 of
Table 1 shall be changed to "Labor Welfare Promotion Fund under Article 87 of the Framework Act on Labor Welfare".
(4) Parts of the Enforcement Decree of the Corporate Tax
Act shall be revised as follows:
"Framework Act on Employee Welfare" in subparagraph 16 of Article 19 shall be changed to "Framework Act on Labor
Welfare".
"Framework Act on Employee Welfare" in parts other than each subparagraph of Article 120-12 (4) shall be changed to
"Framework Act on Labor Welfare".
(5) Parts of the Enforcement Decree of the Lottery and
Lottery Fund Act shall be revised as follows:
"Employee Welfare Promotion Fund under Article 47 of the
Framework Act on Employee Welfare" in Article 17 (1) 3 shall be changed to "Labor Welfare Promotion Fund under Article 87
of the Framework Act on Labor Welfare".
(6) Parts of the Enforcement Decree of the Industrial
Accident Compensation Insurance Act shall be revised as follows:
"Article 21 of the Framework Act on Employee Welfare" in subparagraph 52 of Table 1 shall be changed to "Article 22 of
the Framework Act on Labor Welfare".
(7) Parts of the Enforcement Decree of the Inheritance Tax and Gift Tax Act shall be revised as follows:
"Framework Act on Employee Welfare" and "Employee
Welfare Promotion Fund" in Article 8 (4) shall be changed to
"Framework Act on Labor Welfare" and "Labor Welfare
Promotion Fund".
"Framework Act on Employee Welfare" in Article 35 (1)
shall be changed to "Framework Act on Labor Welfare", and "Framework Act on Employee Welfare" and "Employee Welfare Promotion Fund" in Article 35 (3) to "Framework Act on Labor
Welfare" and "Labor Welfare Promotion Fund".
(8) Parts of the Enforcement Decree of the Income Tax Act shall be revised as follows:
"Employee Welfare Fund Act" in Article 110-3 (2) 1 shall be changed to "Framework Act on Labor Welfare".
(9) Parts of the Enforcement Decree of the Capital Markets and Financial Investment Services Act shall be revised as follow:
"Framework Act on Employee Welfare" in Article 6 (4) 12
shall be changed to "Framework Act on Labor Welfare". "Framework Act on Employee Welfare" in Article 11 (1) 2 B
shall be changed to "Framework Act on Labor Welfare".
"Employee Welfare Fund Act" in Article 176-2 (2) 6 D shall be changed to "Framework Act on Labor Welfare", and "Framework Act on Employee Welfare" in item E of the same subparagraph to "Framework Act on Labor Welfare".
"Framework Act on Employee Welfare" in Article 176-9 (1) 1 shall be changed to "Framework Act on Labor Welfare", and "Article 37 (1) of the Framework Act on Employee Welfare" in the proviso to paragraph (3) of the same Article to "Article 43 (1) of the Framework Act on Labor Welfare".
"Article 32 of the Framework Act on Employee Welfare" in subparagraph 10 of Article 198 shall be changed to "Article 38 of the Framework Act on Labor Welfare".
(10) Parts of the Enforcement Decree of the Restriction of
Special Taxation Act shall be revised as follows:
"Framework Act on Employee Welfare" in Article 82-4 (1) 4 shall be changed to "Framework Act on Labor Welfare", and "Article 32 of the Framework Act on Employee Welfare" in the proviso to paragraph (9) of the same Article to "Article 38 of the Framework Act on Labor Welfare".
Articl e 8 (R el ati on to O ther D ecrees)
References to the previous Enforcement Decree of the Framework Act on Employee Welfare or its provisions and the previous Enforcement Decree of the Employee Welfare Fund Act or its provisions in other Decrees at the time this Decree enters into force shall be deemed references to this Decree or the corresponding provisions of this Decree, if any, in lieu of the previous Enforcement Decree of the Framework Act on Employee Welfare or its provisions and previous Enforcement Decree of the Employee Welfare Fund Act or its provisions.

Addenda <Presidential Decree No. 22806, Mar. 30, 2011>

Articl e 1 (Enf orcement D ate)
This Decree shall enter into force on the date of its promulgation.
Articl e 2 (T ransiti onal M easures concerni ng Fi nes f or Negli gence)
The application of the criteria for imposition of fines for negligence to offenses committed before this Decree enters into force shall be governed by the previous provisions notwithstanding the amended provisions of Table.

Addendum<Presidential Decree No. 22946, May. 30, 2011>

This Decree shall enter into force on the date of its promulgation.
[Table] <Amended on Mar. 30, 2011>

Criteri a f or I mposi ti on of Fi nes f or Negl igence

(relating to Article 67)
1. General criteria
The Minister of Employment and Labor may, if an offender falls under any of the following conditions, reduce the
amount of fine for negligence under subparagraph 2 by up to half : Provided that this shall not apply to offenders who delay payment of a fine for negligence.
1) Where the offender falls under any subparagraph of Article 2-2 (1) of the Enforcement Decree of the Act on the Regulation of Violations of Public Order;
2) Where the offender has a reason, such as suffering a considerable loss to property due to a natural disaster, fire, etc., or facing a serious crisis due to worsening business conditions;
3) Where the offense is deemed to have been caused by a mistake, such as minor carelessness or error, etc.; or
4) Other cases where it is deemed necessary to reduce the amount of fine for negligence in consideration of the degree of offense, the motive and consequences of offense, etc.
2. Specific criteria

any purpose other than the intended
one in violation of Article 6 of the
Act
B. Where the matters prescribed in
Article 35 (2) 1 of the Act are not subject to resolution at a general meeting of employee stock
ownership association members in violation of the proviso to Article 35 (3) of the Act
C. Where a general meeting of employee stock ownership
association members or a meeting of delegates is not held in violation of Article 35 (4) of the Act
D. Where the officers and delegates of
an employee stock ownership association, including the
representative, are not elected by the employee stock ownership association members by direct, secret
and unsigned ballot in violation of
Article 35 (5) of the Act
E. Where books and documents are not prepared, kept or preserved in violation of Article 35 (7) of the Act
Article 98 (4) 1 of the Act
Article 98 (4) 1 of the Act
Article 98 (4) 1 of the Act
Article 98 (4) 1 of the Act
800,000 won
800,000 won
1 million won
1) Where they are not prepared or
kept in the main office
600,000
won
2) Where they are not preserved for
10 years
600,000 won
F. Where the relocation of the main
office is not reported in violation of
Article 35 (8) of the Act
Article 98
(4) 1 of the
Act
600,000 won
G. Where the operating status is not
reported within 3 months after end of each fiscal year in violation of Article 35 (9) of the Act
H. Where acquired shares are not
allocated or managed in accordance with the relevant account handling
methods in violation of Article 37 of
the Act
I. Where company stocks are deposited in violation of Article 43 (1) of the Act
J. Where deposited company stocks are
transferred or offered as collateral in violation of Article 43 (3) of the Act
K. Where the method of exercising the voting rights of an employee stock
ownership association under Article
46 of the Act is violated
L. Where an employee stock ownership association is dissolved even though
it does not have a reason specified in the former part of Article 47 (1) of the Act
M. Where the dissolution procedures
specified in the latter part of Article
41 (1) of the Act are violated
Article 98
(4) 1 of the
Act
Article 98 (4) 2 of the Act
Article 98 (4) 3 of the Act
Article 98 (4) 4 of the
Act
Article 98 (4) 5 of the Act
Article 98 (4) 6 of the Act
Article 98 (4) 6 of the Act
600,000 won
800,000 won
600,000 won
800,000 won
1 million won
1 million won
600,000 won
N. Where the minutes of a welfare
fund council meeting are not recorded or kept in violation of Article 57 of the Act
O. Where documents are not prepared or kept in violation of Article 65 of the Act
P. Where a corrective order under
Article 69 of the Act is violated
Q. Where a person fails to make a report or makes a false report on
the matters specified in Article 93 (1) 1 and 2 of the Act
R. Where a person refuses, obstructs or evades an examination by a relevant
public official or fails to comply with a corrective order on the matters specified in Article 93 (1) 1
and 2 of the Act
S. Where a person fails to make a report or makes a false report on
the matters specified in Article 93 (1) 3 of the Act
1) Where a person fails to make a
report
2) Where a person makes a false report
T. Where a person fails to comply with a corrective order in relation to the
Article 98
(3) 1 of the
Act
Article 98 (3) 1 of the Act
Article 98
(1) of the
Act
Article 98 (4) 7 of the Act
Article 98 (4) 7 of the Act
Article 98 (3) 2 of the Act
Article 98 (3) 2 of the
1 million won
1 million won
3 million won
600,000 won
800,000 won
1 million won
1.5 million
won
1.5 million
matters specified in Article 93 (1) 3
of the Act
Act won
U. Where a person refuses, obstructs or evades an examination by a relevant
public official on the matters specified in Article 93 (1) 3 of the Act
V. Where a person fails to make a
report or makes a false report in violation of Article 93 (2) of the Act
W. Where a person fails to submit
materials or submits false materials in violation of Article 93 (2) of the Act
X. Where a person fails to comply with
an order necessary for inspection under Article 93 (2) of the Act
Y. Where a person refuses, obstructs or
evades an examination under Article
93 (2) of the Act
Article 98 (3) 2 of the Act
Article 98 (4) 8 of the
Act
Article 98 (4) 8 of the Act
Article 98 (4) 8 of the Act
Article 98
(4) 8 of the
Act
1.5 million won
600,000 won
600,000 won
600,000 won
800,000 won