La Chambre
[Regulation Update] Korea Clarifies Objectives of the “Yellow Envelope Act”
Following the adoption of the amendment to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act, known as the “Yellow Envelope Act”, the Korean government has outlined the objectives and implementation principles of the reform through a briefing by the Minister of Employment and Labor.
Passed by the National Assembly in August 2025 and expected to take effect in early 2026, the amendment aims to adapt Korea’s labor framework to increasingly complex subcontracting structures. It seeks to better align responsibility with decision-making power by enabling collective bargaining with entities that exercise substantial control over working conditions, even when they are not the direct employer.
The government emphasized that the reform is designed to promote dialogue, stability, and coexistence in labor-management relations, while aligning with international standards on responsible business conduct. To mitigate legal uncertainty, detailed guidelines and practical manuals will be issued following consultations with labor, management, and experts.
Business groups in Korea and abroad have raised concerns regarding potential impacts on corporate decision-making and investment. The government reiterated its commitment to ensuring predictability and a smooth implementation process through continued dialogue and on-site support.
Choi Jae-yoon, head of the Field Support Task Force at the Ministry of Employment and Labor, promised that “before the new regulations take effect on March 10, 2026, we will provide foreign-invested companies with greater clarity by delivering more detailed on-site guidance manuals and guidelines through foreign chambers of commerce in Korea as soon as possible.”
