“Yellow Envelope Law” Unwraps New Worker Rights in South Korea

Intermediate | September 6, 2025

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Waving the Yellow Envelope: New Labor Law in South Korea

On August 24, 2025, South Korea’s National Assembly passed a bold reform to the Trade Union and Labor Relations Adjustment Act—nicknamed the “Yellow Envelope Law South Korea”—designed to expand rights for subcontracted and precarious workers. This new law marks a key shift in South Korea’s labor landscape. (reuters.com, business-humanrights.org)

What the Yellow Envelope Law South Korea Says

Under the new rules, companies that indirectly employ workers—such as subcontractors—can now be treated as the official “employer” if they control working conditions. This means these companies must negotiate directly with union representatives, even if the workers aren’t on their payroll. (business-humanrights.org, lexology.com)

Closing Loopholes

The law also closes legal loopholes: it protects unions against damaging lawsuits by employers and limits claims for strike-related losses. In effect, it lowers the risks for unions organizing protests or strikes. (business-humanrights.org, lexology.com)

Supporters and Critics

President Lee Jae‑Myung, a supporter of the legislation, says it promotes cooperation between unions and companies, even while business leaders voiced concerns that it could weaken South Korea’s competitiveness. (tradingview.com, reuters.com)

Reaction Beyond Lawmakers

Unions have celebrated the reform as a long overdue victory for vulnerable workers, while civic groups welcomed it as a step toward social fairness. At the same time, large employer federations and some conservative commentators warned it may increase costs and limit flexibility for businesses competing globally. The public conversation reflects both relief from workers’ groups and caution from the corporate sector.

A Milestone Moment

Lawmakers have called the change a milestone moment—giving voice and legal rights to previously overlooked workers. However, the Yellow Envelope Law South Korea is set to take effect in about six months, giving companies time to adjust to the new rules. (business-humanrights.org, lexology.com)

Vocabulary

Subcontractor (noun) – a company hired by another to perform part of the work.
Example: “A subcontractor may hire workers but still follow the client company’s rules.”
Precarious (adjective) – not securely employed or reliable.
Example: “Many gig-economy jobs are precarious, with no guarantee of steady income.”
Reform (noun) – a change made to improve a system.
Example: “This new law is a major reform in labor protection.”
Negotiation (noun) – discussion to reach an agreement.
Example: “Workers and companies engaged in negotiation over rights.”
Loophole (noun) – a gap in the law that lets someone avoid a rule.
Example: “The new law closes a loophole that allowed companies to avoid union talks.”
Strike (noun) – when workers stop working to demand changes.
Example: “Unions threatened a strike to push for better conditions.”
Liability (noun) – legal responsibility for something.
Example: “The company faced liability for strike-related damages.”
Competitiveness (noun) – ability to compete well.
Example: “Businesses worry the law might reduce competitiveness.”
Milestone (noun) – an important event marking progress.
Example: “This legislation is a milestone in labor rights.”
Implementation (noun) – the act of putting a plan or law into action.
Example: “Implementation of the law won’t happen until next year.”

Discussion Questions (About the Article)

What is the “Yellow Envelope Law South Korea,” and why is it important?
How does the law change who can be considered an employer?
Why do some business groups worry this reform could harm competitiveness?
In what ways does the law protect unions from lawsuits or damages?
Why is giving subcontracted workers more rights a milestone moment?

Discussion Questions (About the Topic)

Should companies that control working conditions be treated like employers? Why or why not?
What are the pros and cons of broader union protections for gig or contract workers?
How can a country balance worker rights with economic competitiveness?
What industries in your country might be affected if a law like this existed?
Should workers who aren’t direct employees get the same protections as full-time staff?

Related Idiom

“Level the playing field” – to make conditions fair for all sides.
In this case, the Yellow Envelope Law South Korea levels the playing field by giving tougher protections to workers usually on the margins.

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This article was inspired by Reuters. (reuters.com)