Jung Min-ho has worked as a staff writer at The Korea Times since 2012, mostly covering social and political issues. He currently belongs to the Politics & City Desk where he covers topics such as health, labor and human rights. Prior to joining the team, he was responsible for covering North Korea and sports. His article about a biosecurity breach of Middle East respiratory syndrome won him an award from the Korea Science Journalists Association in 2016. He is also the co-author of the book, "Medical Pioneers of Korea" (2019). He served as the head of the international relations committee at the Journalists Association of Korea from 2021 to 2023.
EXPLAINER New regulation aims to clarify ambiguity in ‘yellow envelope law’
Unionized workers employed by subcontractors of Hyundai Steel hold a protest near the Supreme Prosecutors' Office in Seoul, Aug. 27. Yonhap
By Jung Min-ho
Ahead of the implementation of the “yellow envelope law” on March 10, 2026, the government on Monday announced a regulatory overhaul that will reshape how labor unions representing subcontracted employees can negotiate with parent companies, as officials move to resolve ambiguities about who counts as an employer and how bargaining will proceed.
Starting Tuesday, the Ministry of Employment and Labor will begin collecting public opinion on amendments to the enforcement ordinances of the labor law. The revision breaks new ground by extending the definition of “employer” to include not only direct contract holders, but also entities with “substantive and specific control” over the working conditions of subcontracted workers.
This means parent companies can be pressed to negotiate with labor unions representing workers employed by their subcontractors ― a significant change that will have an especially strong effect on major companies that operate through widespread use of subcontracted labor and layered supply chains, common in the shipbuilding and construction industries.
Under the new rules, the default is to separate bargaining units between parent company unions and subcontractor unions due to their differing interests and negotiating subjects.
The separation of units is important for subcontracted workers because it gives them a seat at the negotiation table and prevents their interests from being overshadowed by larger parent company unions, according to officials.
When dividing bargaining units among subcontractor unions, any agreement between parent companies and unions will be respected as much as possible. But if the involved parties fail to agree, the system is designed to uphold strong bargaining rights for all subcontractors, officials said.
If subcontractors have different jobs or interests, each subcontractor can be separated to negotiate individually, for example. If subcontractors have similar characteristics, those with similarities can be grouped together for joint bargaining. If all subcontractors have similar jobs and interests, their unions can be combined into a single bargaining unit.
If subcontractor unions wish, they can form a joint bargaining unit with parent firm unions.
The National Labor Relations Commission will play a central role in this process, making or approving decisions about unit separation and balancing the shared interests of involved parties.
If the commission decides that a parent company substantively controls working conditions, that company must negotiate with directly subcontracted unions. If it refuses, the commission can step in and require workers, unions and employers to submit necessary documents or materials. Failure to comply with requests or submission of false documents can result in fines of up to 5 million won ($3,400), and legal sanctions can be handed out for unfair labor practices.
To further clarify responsibilities and increase predictability, the ministry plans to establish an Employer Status Review Committee. This committee would help resolve questions over the scope of employer obligations and bargaining duties, speeding up effective union-employer talks in the nation’s complex supply chain landscape.
Despite these efforts, ambiguity remains and legal challenges are likely. Disputes over issues such as who is responsible for negotiations with workers from partner firms could still end up in court due to the complexity of the laws.
“This amendment to the enforcement ordinances aims to fully uphold the principle of labor-management autonomy during collective bargaining and to guarantee the bargaining rights of subcontractor unions and to establish a stable framework for talks,” Labor Minister Kim Young-hoon said. “By the end of this year, we will prepare guidelines regarding employer determination and the scope of labor disputes, in order to resolve uncertainty in workplaces and enable both labor and management to adequately prepare ahead of enforcement of the law next year.”