Home > Opinion > Editorials

Concerns rise over 'yellow envelope' law after one month

Published: 14 Apr. 2026, 00:00

Union members hold placards reading “Secure bargaining with primary contractors” and chant slogans at a rally organized by the Korean Confederation of Trade Unions in Sejong-ro, Seoul, on March 10, the first day of the implementation of the revised Trade Union Act, also known as the “yellow envelope" law. [YONHAP]

Park Soo-keun, chair of the National Labor Relations Commission, said at a press briefing on Monday that recognition of employer status under the revised Trade Union Act, known as the “yellow envelope" law, does not automatically lead to wage increases or obligations for direct employment. He also stressed that the commission does not unconditionally side with labor. The remarks are straightforward. Yet concerns are mounting in industrial circles that an uneven playing field is already taking shape.

In the month since the law took effect, subcontracted unions have rapidly increased demands for collective bargaining with primary contractors, while labor authorities have begun issuing a series of rulings on employer status. According to the Ministry of Employment and Labor, as of Friday, 1,012 subcontracted unions representing about 147,000 workers had requested negotiations with 372 primary contractors.

Among these cases, 294 were submitted to regional labor commissions. Of those reviewed, employer status was recognized in 19 cases and rejected in eight. Although the commission maintains that it is not biased toward labor, a majority of rulings so far have favored unions, reinforcing concerns among businesses.

Corporate worries are also growing that companies could be drawn into continuous negotiations. In the case of Posco, where subcontracted unions were allowed to form separate bargaining units, the company must now negotiate with three subcontracted unions, including those affiliated with major labor federations, in addition to its in-house union. This effectively requires bargaining with four unions each year.

Companies can appeal labor commission decisions, but concerns remain about the risks of challenging rulings under a policy environment perceived as favorable to labor. Even when negotiations proceed, uncertainty persists over the scope of issues to be addressed. Labor authorities have recognized employer status largely in relation to workplace safety, but business groups warn that unions may use this as a basis to expand demands to wages, welfare benefits and direct employment.

There are also concerns that demands framed as safety issues — such as safety allowances or the abolition of comprehensive wage systems — could effectively function as wage increases. This raises further questions about how far negotiations may extend once employer status is recognized.

To address concerns about an uneven playing field, authorities must demonstrate balance not only in statements but in actual rulings and decisions. The government should also take proactive steps to minimize confusion and unintended consequences that have emerged since the law’s implementation.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.