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Subject   March 2017 - Employment Systems and Employment Relations for Overseas Koreans
Employment Systems and Employment Relations for Overseas Koreans

I. Introduction
As of December 2016, there were 2,049,441 foreigners staying in Korea, comprising 4.0% of Korea’s total population (51,696,216). Since 2010, the yearly average increase of foreigners in Korea has stayed at 8.4%, and if this rate continues, there will be more than 3 million foreigners in Korea by 2021, which will be equivalent to 5.6% of the total Korean population. The main reason for this increase is that immigration of overseas Koreans from China and the former Soviet Union has increased at a yearly average of 29.0% since 2010. Two reasons why this has are as follows: first, the Korean government has maintained a an open immigration policy for overseas Koreans, softening the entry process to Korea and making it easy to find a job here; second, overseas Koreans from these areas can make much more money here than in their resident countries. I would like here to review the change in legal environment which has enabled this rapid increase of overseas Koreans; the employment system for hiring overseas Koreans, and the labor protection available.

II. The Legal Environment and Employment System for Overseas Koreans
1. Legal environment
The Act on the Immigration and Legal Status of Overseas Koreans (hereinafter referred to as the “Overseas Koreans Act”) was designed to reduce Korea’s immigration control for overseas Koreans and to induce them to come by softening a variety of restrictions for visits and stays, and related to real estate acquisition and financial transactions, etc. At the time of its enactment, the Overseas Koreans Act defined Korean foreign nationals as ① Koreans (and their lineal descendants) who had lost Korean nationality after emigrating abroad after establishment of the Government of the Republic of Korea; and ② Koreans (and their lineal descendants) who emigrated abroad before the Korean government was established and who could explicitly verify their previous Korean nationality. However, many overseas Koreans residing in China and the former Soviet Union (CIS area ) emigrated abroad before the Korean government was established, and at the time they emigrated there were no diplomatic relations with South Korea. It would, therefore, be impossible for overseas Koreans residing in China and the former Soviet Union to explicitly verify their former Korean nationality. The Constitutional Court ruled that discrimination in excluding overseas Koreans from these countries was unconstitutional due to violation of the principle of equal treatment when comparing full application of this Law for overseas Koreans from other countries, such as the USA, Japan, etc. After this Constitutional Court ruling and supplementary revision of the law, overseas Koreans from China and the former Soviet Union began to obtain working visit visas (H-2), and gradually extended these to overseas Korean visas (F-4) and permanent resident visas (F-5), making it possible for them to stay longer. However, in order to prevent negative impacts on the Korean employment market due to uncontrolled issuance of such visas to overseas Koreans, those in the country under working visit visas (H-2) who obtained their qualification through long service in non-professional employment have been allowed to receive an overseas Korean visa (F-4), except for those with college graduate degrees (see Table 1 below).

Status of Sojourn for Foreigners
As of         Total        Overseas Korean
(F-4)        Non-professional
(E-9)        Working Visit
(H-2)        Permanent Resident
(F-5)        Studying Abroad
(D-2)        Resident
(F-2)        Other
Dec. 31, 2016        2,049,441        372,533        279,187        254,950        130,237        76,040        39,681        896,813
Dec 31, 2011        1,395,077        136,702        234,295        303,368        64,979        68,039        138,418        449,277
Dec. 31, 2007        1,066,273        34,695        175,001        228,686        16,460        47,780        9,071        554,580
Rate of Increase         92%        974%        60%        12%        691%                        

2. Employment system for overseas Koreans
After the Constitutional Court’s decision that the provision discriminating against overseas Koreans according to country of residence was unconstitutional, a new amendment was enacted that avoided this discrimination. Many systemic changes were then adopted.
(1) Employment management system (2002~2004, F-1 family visitation visa)
In December 2002, the employment management system for overseas Koreans was introduced, which allowed overseas Koreans aged 40 years or older who had a family member or relative in Korea, to get a job in 8 service fields. In May 2003, the age limit was lowered to 30.
(2) Exceptional employment permit system (2004~2007, E-9 non-professional employment visa)
Overseas Koreans from China and the former Soviet Union were managed under the exceptional employment permit system in the Act on Foreign Workers’ Employment, Etc. This system allowed overseas Koreans who were 25 years of age or older, and who had a relative in Korea, to receive a family visitation (F-1) visa first and then change it to a non-professional (E-9) visa with which they could work for up to 3 years in workplaces in services, manufacturing, and the agricultural and cattle-feeding industries. However, as can be gleaned from the requirements, this employment permit system excluded those who did not have relatives in Korea.

(3) Working visit system (from 2007, the H-2 working visit visa)
The working visit system was introduced in March 2007. This system has the characteristic engagement policy towards overseas Koreans from China and the former Soviet Union, who have been relatively neglected as concerns the benefits of the Overseas Koreans Act. This system allows employment for all overseas Koreans, whether or not they have a family member or relative in Korea; the scope of jobs for which they are eligible has been extended and permission given to allow their quitting one job and moving to another workplace with no restrictions.
Within the effective period of their working visit visa, they can visit their home countries freely and stay in Korea for up to 5 years. Overseas Koreans who have relatives can come to Korea by invitation, while those who do not have relatives are allowed to come to Korea based on a computer-based lottery among those who have passed a Korean language proficiency test. This working visit system allows for employment in 38 non-professional jobs; the seeker should complete employment training first before getting a job either through the job centers or on their own.

Changes of the Employment System for Korean Foreign Nationals
System         Year        Legal Reference        Content
Employment management system        2002        Labor management rules for family visitors(Labor Ministry notice: 2002-29)        Overseas Koreans could work only in the service sector and for a maximum of 3 years after entering via invitation from a relative.
Exceptional employment permit system         2004        Act on Foreign Workers’ Employment, Etc.        The employment management system was incorporated into the employment permit system, after which the scope of allowed jobs and period of employment.
Working holiday system        2007        Act on Foreign Workers’ Employment, Etc.        Overseas Koreans can enter Korea on a 5-year working visit visa and can visit their home countries freely. They are managed by the employment permit system, and can freely move to other workplaces.

III. Employment Relations for Overseas Koreans
1. Expanded visa qualifications for overseas Koreans (H-2 → F-4 → F-5)
The Ministry of Justice expanded the application of the overseas Korean visa (F-4) to eliminate discrimination based upon resident country. In April 2010, according to 「Policies to be pursued for overseas Koreans in 2010」, those working under a working visit visa (H-2) for at least 1 year (changed to 2 years in August 2011) in a specific industry such as manufacturing, were allowed to obtain an F-4 (overseas Korean) visa that would permit them to stay in Korea in recognition of their contribution to the national interest.
As well, overseas Koreans with a working visit (H-2) visa can obtain a permanent resident (F-5) visa upon satisfying all of the following conditions: ① he/she has worked for at least four years in the same workplace (manufacturing, agriculture or the livestock or fishing industry) without changing his/her workplace; ② He/she or his/her family has property in Korea valued at KRW 30 million or more, with the ability to maintain their livelihood; or ③ he/she has obtained a specified technical certificate through the examination given by the Korea HR Development Corporation or whose annual income is more than the average GNI (Gross National Income) as stated by the Bank of Korea in the previous year.
Status of Overseas Koreans
(Unit: person)
Visa        Dec. 2007        Dec. 2011        Dec. 2016        Remarks
Working visit (H-2)         228,686        303,368        254,950        An increase of 10-30% over the past 10 years.
Overseas Korean (F-4)        34,695        136,702        372,533        An increase of over 300,000 people (974%) over the past 10 years.
Permanent resident (F-5)        16,460        64,979        130,237        An increase of over 110,000 people (691%) over the past 10 years.

2. Employment relations
(1) Working visit (H-2)
Overseas Koreans who entered with a working visit (H-2) visa must strictly follow the provisions concerning the employment process, change of workplace, time frame, etc. in accordance with the Act on Foreign Workers’ Employment, Etc. This visa allows overseas Koreans to change jobs within the permitted job categories, but they can only stay for up to 3 years. After that, their maximum stay can be extended by up to 2 years.
Overseas Koreans with a working visit visa (H-2) are protected under Korean labor laws as native-born Koreans. Article 22 of the Act on Foreign Workers’ Employment, Etc. states “No employer shall discriminate or unfairly treat any person on the grounds that he/she is a foreign worker.” Article 6 of the Labor Standards Act also stipulates that “No employer shall discriminate against workers on the basis of nationality.”
However, justifiable discrimination is allowed, with the related Labor Ministry Guidelines explaining, “Determining whether discrimination based on nationality exists or not shall require consideration of all related items collectively: whether the discrimination in working conditions was only based on nationality or not; other entire factors regarding the working conditions such as wages and working hours; and in addition, whether discrimination exists that exceeds reasonable criteria for the work.” Therefore, if there is justifiable reason in the workplace, an employer’s discrimination against foreign workers could be acceptable. For example, “in considering collectively, the foreign workers’ unskilled status, inconvenience in verbal communication due to language, impossibility of long-term service, difficulties in improving productivity, and other work performance-related factors, including better welfare items such as free housing and free meals, it could not be interpreted as discrimination due to nationality even if an employer applied inferior working conditions for foreign workers only under different rules of employment.” Consequently, discrimination between overseas Koreans and native-born Koreans in the above instance could be acceptable as exceptions.
(2) Overseas Korean (F-4)
An overseas Korean (F-4) visa is issued only to college graduates and excludes those who are normally engaged in simple repetitive work, corporate presidents, holders of a technician’s certificate or higher skill, and overseas Koreans who are at least 60 years of age. While this F-4 visa had seldom been issued for overseas Koreans from China or the former Soviet Union, since 2010, it has been expanded to include working visit (H-2) visa holders who have met certain qualifications. Overseas Koreans with this H-2 visa can renew their stay every three years, which means that F-4 visa holders can stay for a long time.
Since F-4 visa holders, unlike overseas Koreans with a working visit visa, can stay for a long time, they can be engaged in any business except simple repetitive work, and are protected by Korean labor laws to nearly the same extent as Korean citizens. Overseas Koreans (F-4) are not covered by the Act on Foreign Workers’ Employment Etc., but are protected under the Immigration Control Act and general labor laws. As they can stay for a long period of time, they can maintain long-term employment rather than fixed-term employment. In cases where an overseas Korean with an F-4 visa has worked as a fixed-term employee beyond 2 years, whether or not this overseas Korean can be regarded as a non-fixed employee is a frequently-asked question. Labor Ministry Guidelines state the following:
“According to Article 4 of the Act on the Protection, etc. of Fixed-Term and Part-Time Employees, if an employer employs a fixed-term employee for more than two years (in cases where a fixed-term labor contract is repeatedly renewed, if the total consecutive employment period exceeds two years), the fixed-term employee shall be considered a worker who has entered into a non-fixed term labor contract. However, if there is an exceptional regulation, an employer may employ a fixed-term employee for more than two years. Since a foreigner must qualify for the status of stay and can stay for the permitted period according to Article 17 of the Immigration Control Act, this is considered an exceptional case for the period of employment protected by the Act on the Protection, etc. of Fixed-Term and Part-Time Employees.”
Accordingly, overseas Koreans employed under the overseas Korean (F-4) visa are not protected from the restrictions on fixed-term employment under the Act on the Protection, etc. of Fixed-Term and Part-Time Employees. However, for a permanent resident (F-5) visa, there are no restrictions on the period of stay according to Article 18 of the Immigration Control Act. Therefore it cannot be considered as a “case where the period of employment is differently stipulated by other laws”.
(3) Permanent resident (F-5) for Korean foreign nationals
Overseas Koreans with a permanent resident (F-5) visa have the most secure status under the Immigration Control Act and can stay with no limitations. Accordingly, there is no need to apply for an extension of stay with this visa; it is also possible to invite family members from abroad.

IV. Conclusion
As Korea needs to attract foreign workers to compensate for a shortage of manpower in vulnerable industries due to its low birthrate and its aging society, it is desirable to induce overseas Koreans who can more easily adapt to Korean culture and thereby minimize social conflict. I would like to mention two items in need of improvement. First, Article 3 of the Presidential Decree to the Overseas Koreans Act restricts its definition of overseas Koreans to within the 3rd generation by stipulating, “those who obtained foreign nationality as one whose parent or grandparent used to hold Korean nationality.” As many overseas Koreans from China and the former Soviet Union emigrated abroad before the Korean government was established in 1948, it is necessary to extend the scope of overseas Koreans to the 4th generation, which will meet the requirements foreign worker manpower policy. Second, as overseas Koreans cannot be properly protected by Korean labor laws due to the restrictions of their visa status under the Immigration Control Act, the related legal system should be improved.


[List]

138 (1/7)
No Subject
138 June 2017 - Checklist of Standard Working Conditions  
137 May 2017 - Certified Public Labor Attorneys and their Power of Attorney at Appeals Commissions  
136 April 2017 - A System for Employment of Foreign Worker: Domestic Workers  
March 2017 - Employment Systems and Employment Relations for Overseas Koreans  
134 February 2017 - Foreign Workers & the Social Insurances  
133 January 2017 - Equal Treatment: Criteria for Judgment & Related Cases  
132 December 2016 - Human Rights of Foreign Workers and Labor Law Applications  
131 November 2016 - The Kim Young-Ran Act and Joint Penal Provisions Related to the Employer’s Legal Liabilities  
130 October 2016 - Employment Relations by VISA Type  
129 September 2016 - Application of Korean Labor Laws at Foreign Embassies & Limits on their Korean Employees  
128 August 2016 - The Principle of Complete Payment of Wages & Exceptions  
127 July 2016 - Changes of the Employment Permit System for Migrant Workers  
126 June 2016 - Comparison between the Labor Relations Commission and the Teachers’ Appeals Commission  
125 May 2016 - Business Transfers & Employment Relations  
124 April 2016 - Can an accident on the way to the office before a business trip be considered work-related?  
123 March 2016 - Requirements for Unfavorable Changes to Employee Working Conditions to be Considered Reasonable according to Social Acceptability  
122 February 2016 - Government Guidelines for Ordinary Dismissal Due to Poor Performance  
121 January 2016 - Settlement Following an Occupational Fatality  
120 December 2015 - Restrictions on Replacing Workers on Strike  
119 November 2015 - Criteria for Determining “Employee” Status  

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