In times of faltering economic conditions in Korea, there has been an increasing issue of so-called “Passion Pay,” where employers hire youths experiencing persistent employment difficulties as ‘interns,’ but exploit them as ‘workers’ without fulfilling their required legal obligations prescribed under the Labor Standards Act. Passion Pay has recently aroused strong public criticism. With a view to eradicating Passion Pay, the Ministry of Employment and Labor (“MOEL”) prepared the Guidelines for the Determination and Protection of the Legal Status of Work Experience Trainees on February 1, 2016 (the “Intern Guidelines”). On March 14, 2016, MOEL announced its Workplace Labor Inspection Plan for 2016, which includes the inspection plan to eradicate Passion Pay through the system of reporting violations of the Intern Guidelines and by counseling in order to induce voluntary improvement in workplaces. The main points of the Intern Guidelines are discussed below.

1. Standards for conceptually distinguishing between work experience trainees and workers

The Intern Guidelines define a work experience trainee (“Trainee”), regardless of the different job titles used for Trainee, e.g., on-the-job trainee, apprentice, trial employee and intern, as an individual working in the relevant business or workplace for the purpose of receiving education and training. Even though a Trainee is distinguishable from a worker who stands in a subordinated position and provides labor to its employer for the purpose of receiving income, the Intern Guidelines stipulate that a Trainee, who falls under any of the following circumstances, should be regarded as a worker subject to legal protection under the Labor Standards Act:

  1. Employer exploits a Trainee’s labor by continually ordering such Trainee to perform tasks based on workplace needs without providing job-training programs;
  2. Trainee is used as a substitute for a worker on a temporary or permanent basis, such as during peak season in the workplace; and
  3. Education and/or training program in the workplace is excessively simple and repetitive that an employer’s underlying purpose for hiring a Trainee appears to have been the exploitation of such Trainee’s labor

2. How to reasonably operate work experience programs

The Intern Guidelines provide overall recommendations on the recruitment, execution of relevant agreements, training period, plan implementation details and management style regarding Trainees. Important details of the Intern Guidelines are provided as follows:

  • Volume of recruitment: Recruitment should not exceed a certain ratio of workers to Trainees (however, this rule can be flexible considering the particular industry characteristics);
  • Training period: Training period should not exceed six months (if work has low difficulty level, such period cannot exceed two months);
  • Training Hours: Training hours are limited to eight hours/day, 40 hours/week and in principle, extended, nighttime or holiday training is prohibited;
  • Management style: Employer should designate an employee to be in charge of Trainees and maintain a record of training details;
  • Industrial safety: Employer should be held responsible for industrial safety and health according to the statutes applicable to workers (e.g., interns should be compensated for work-related injuries) and should provide education, management and supervision to prevent sexual harassment in the workplace; and
  • Other issues: Employer should reimburse Trainees’ meal and transportation expenses, provide Trainees with access to welfare facilities, and ensure that efforts are made to preferentially hire Trainees as workers relative to other candidates.

3. Noteworthy issues for personnel supervisors

The Intern Guidelines are neither legally binding nor enforceable per se. However, considering the extents to which MOEL has performed labor inspections to eradicate Passion Pay (considering especially that in the second half of this year, MOEL plans to perform continual inspections of Trainee management plan in workplaces) and has expressed its willingness to harshly punish workplaces violating the Intern Guidelines, employers should professionally manage their Trainees within the scope of complying with the Intern Guidelines.