(News Focus) Pro-labor 'yellow envelope act' takes effect amid continued resistance

▲ In this file photo, the pro-labor yellow envelope act is passed by the National Assembly in Seoul on Aug. 24, 2025. (Yonhap)

(News Focus) labor law-enactment

(News Focus) Pro-labor 'yellow envelope act' takes effect amid continued resistance

By Lee Haye-ah

SEOUL, March 10 (Yonhap) -- A revised labor law aimed at broadening workers' bargaining rights took effect Tuesday following a six-month preparation period amid continued resistance from both labor unions and businesses.

The so-called yellow envelope act was passed by the National Assembly in August, making prime contractors more accountable for subcontracted workers while restricting businesses from claiming damages from striking workers.

Labor groups have welcomed the new law but taken issue with a requirement that subcontractors' unions must form a single bargaining channel in principle.

The Korean Confederation of Trade Unions has warned it would call a large-scale strike in July against prime contractors that refuse to bargain with subcontractors' unions.

Business circles, meanwhile, have voiced concerns about widening disputes between labor and management.

The Korea Enterprises Federation said in a statement that some unions have threatened to demand negotiations with employers even though they lack bargaining rights, while some subcontractors' unions have launched sit-ins demanding negotiations with prime contractors ahead of the law's enactment.

During the six-month preparation period, the labor ministry issued guidelines on how to interpret the new law and published manuals on advisable negotiation steps for prime contractors and subcontractors.

As confusion continues, the ministry said it will keep providing various types of assistance after the law's implementation, such as by operating a government advisory panel to lay out the criteria for key contentious issues.

"I ask the business community to engage in dialogue with a responsible attitude, rather than avoiding negotiations, and the labor circles to engage in dialogue with restraint and an attitude toward compromise so that problems can actually be solved," Labor Minister Kim Young-hoon said.

"If the government's efforts combine with the dialogue and compromise of labor and management, a path will open for coexistence between prime contractors, subcontractors and our economy."

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