Resolving the Domestic Labor Shortage Issue by Improving the “Employment Permit System for Foreigners”

- Providing recommendations to the Ministry of Employment and Labor on improvement measures for the Employment Permit System for Foreigners (E-9) –

(19^th January 2024, ACRC)

□ The Employment Permit System for foreigners (E-9) is anticipated to be improved, which was enforced in 2004 with the aim to address the continuous decline in the domestic working age population and labor shortages in disadvantageous workplaces in the era of low birth rates and aging population.

The Anti-Corruption and Civil Rights Commission (ACRC, Chairperson Ryu Chul Whan) developed “improvement measures for the Employment Permit System for Foreigners (E-9),” including the deregulation of the change of workplace and special cases of employment permission concerning re-employment and re-entry, and recommended institutional improvements to the Ministry of Employment and Labor, aiming to protect the rights and interests of foreign workers while facilitating the utilization of foreign labor.

The Employment Permit System for foreigners is designed to enable domestic business, failed to hire nationals, to obtain the employment permission from the government to employ non-expert foreign workers. Foreign workers are given 4 years and 10 months [3 years + re-employment (1 year and 10 months)] of job-seeking activities after their first entry and eligible for another 4 years and 10 months of job-seeking activities after their re-entry when special cases of employment permission after re-entry is granted (maximum of 9 years and 8 months).

□ 2023 policies regarding the introduction of a new quota for the Employment Permit System and the expansion of foreign labor in shipbuilding resulted in a sharp increase in the number of foreign workers, from 50,000-70,000 to 120,000 per year, demonstrating a growing role and presence of foreign workers.

However, the operational rigidity and strict regulation and management of the Employment Permit System have led to a continuous increase in grievance complaints, such as ▴change of workplace, ▴re-employment (extension), and ▴special cases of re-entry.

* (2020) 122 cases → (2021) 125 cases → (2022) 236 cases → (2023.8.) 273 cases

□ (Change of workplace) In cases where the change of workplace is not applied by the deadline due to employer negligence and unavoidable circumstances, the extension of the application period was not permitted as strictly considering accidents on duty, illness, pregnancy, and childbirth as the grounds for the extension.

Even in cases of failing to obtain employment permission from local employment and labor offices and the change of workplace permission from the Ministry of Justice within the deadline due to reasons attributable to business, foreign workers were forced to leave the country.

* Foreign workers should obtain an employment contract, employment permission, and permission for the change of workplace in accordance with Article 21 of the “Immigration Act” within 3 months after applying for the change of workplace.

ACRC recommended the development of standards to ensure wide applicability of reasons for the extension of the application period for permission of the change of workplace and the change of workplace to encompass socially accepted reasons beyond accidents on duty, illness, pregnancy, and childbirth.

Furthermore, the Commission recommended allowing local employment and labor offices to change reasons and permit the change of employer by authority in cases where necessity of revising reasons for the change of workplace, such as the closure of business, is evident, even if employers have already reported the change of employment following foreign workers changing their jobs.

In addition, ACRC recommended providing foreign workers with information about the date and reasons of resignation when offering guidance on the application and handling of reporting on the change of employment.

□ (Re-employment (extension)) According to the Act on the Employment of Foreign Workers, if employment contracts with foreign workers whose are maintained at least 1 month until the expiry date of the period of job-seeking activities (3 years), employers are permitted to re-employ them for less than 2 years (1 year and 10 months) for one time only by applying for re-employment permission.

However, even in cases where the workplace is changed due to other reasons, such as closure of business, rather than the responsibilities of foreign workers, re-employment is not permitted if the employment contract maintenance period (1 month) is not fulfilled, leading to disputes, including civil complaints and litigations.

Moreover, re-employment permission period for construction business is limited to the “duration of the construction contract” rather than the “period of job-seeking activities (1 year and 10 months),” depriving foreign workers of the opportunities for job-seeking activities when there are delays in the construction.

In this regard, ACRC recommended providing opportunities for obtaining re-employment permission if the workplace is changed due to other reasons rather than responsibilities of foreign workers, even when the employment contract maintenance period (1 month) is not fulfilled.

In addition, the Commission recommended applying the “period of job-seeking activities” as the re-employment permission period for construction business, resolving the labor shortage on construction sites.

□ (Special cases of re-entry) Disadvantages occurred as foreign workers become ineligible for special cases of employment permission after re-entry due to the imposition of employment restrictions following the violation of the business’s obligation to maintain the employment of nationals.

There was a case of a missing application due to insufficient guidance about special cases of employment permission after re-entry when sending a reminder message to the employer about the expiration of the job-seeking period for workers.

In this regard, ACRC recommended developing relief measures, including the change of workplace, in cases where disadvantages occur since foreign workers become ineligible for special cases of employment permission after re-entry following the imposition of employment restriction and informing employers of the application for special cases of employment permission after re-entry before the expiration of the period of job-seeking activities.

The Ministry of Employment and Labor will overhaul the system by December 2025, developing effective measures in consultation with relevant agencies and organizations in accordance with the recommendation.

□ ACRC Vice Chairperson Kim Tae-Gyu said, “In response to resolving the labor shortage in the country, we need pan-governmental participation and collaboration for the utilization of foreign labor. ACRC will remain committed to resolving related grievance complaints and improving circumstances by gradually identifying unreasonable systems.”