On Shutdown Allowances and Paid Leave due to COVID-19

On Shutdown Allowances and Paid Leave due to COVID-19

I really hope that Corona Virus will disappear soon and the number of patients will not increase any more. Also, I’d like to express my deepest gratitude to medical staff and public officials who are taking care of this serious situation. Due to COVID-19, many workplaces have shut down and I’d like to explain shutdown allowances and paid leave as follows;

First of all, in case an employee is hospitalized or isolated due to COVID-19, the employer shall give the employee paid leave. The government will aid the cost of paid leave or living expense to the employer and the employer shall give paid leave to the employee. Please refer to the relevant Article of Infectious Disease Control and Prevention Act as below;

Article 41-2 (Employer’s Obligation to Cooperate)

(1)         Where an employee is hospitalized or isolated under this Act, the relevant employer may grant a paid leave during the period of such hospitalization or isolation, in addition to the paid leave provided for in Article 60 of the Labor Standards Act. In such cases, if the cost of granting a paid leave is subsidized by the State, the employer shall provide the leave.

(2)         No employer shall dismiss, or otherwise treat unfavorably, an employee on the reason of a paid leave granted under paragraph (1) and shall dismiss such employee during the period of the paid leave: Provided, That this shall not apply where the employer is unable to continue his/her business.

(3)         The State may subsidize the cost of granting a paid leave under paragraph (1).

(4)         The scope of subsidization granted under paragraph (3), procedures for application therefor, and other necessary matters, shall be prescribed by Presidential Decree.

[This Article Newly Inserted by Act No. 13639, Dec. 29, 2015]   

In case an employee is to be found a patient with COVID-19 or a patient suspected of the virus or has contacted with a patient with it in a workplace and the government orders the employer to shut down the workplace, the employer does not have to grant paid leave to the employees. On the other hand, if an employer decides to shut down the workplace because of business issues, the employer shall pay for the wages during the shutdown period, and the amount of wages shall be not less than 70 percent of the employee’s wages. The relevant Article of Labor Standards Act is as follows and please note that the Article of paid leave shall be only applied to the workplace of which regular workers is not less than 5;

Article 46 (Shutdown Allowances)

(1)         When a business shuts down due to a cause attributable to the employer, he/she shall pay the employees concerned allowances of not less than 70 percent of their average wages during the period of shutdown: Provided, That if the amount equivalent to the 70 percent of their average wages exceeds that of their ordinary wages, their ordinary wages may be paid as their shutdown allowances.

(2)         Notwithstanding the provisions of paragraph (1), the employer who is unable to continue to carry on the business for any unavoidable reason may, with the approval of the Labor Relations Commission concerned, pay the employees shutdown allowances lower than the standards as prescribed in paragraph (1).    

The government tries many support policies to employers and many polices are being carried out to minimize economic impact. Hence, it is necessary to follow up the latest news on the polices and actively apply for the aid for win-win relationship between employers and employees. For further inquiries, please contact me at https://lawyerhwang.com/consultation/ or yhwang618@gmail.com.

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On Shutdown Allowances and Paid Leave due to COVID-19

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