Hello, I am Attorney Kim Kwang-sik from Cheongchul Law Firm.

Starting March 10, 2026, the amended 'Yellow Envelope Law,' which refers to Articles 2 and 3 of the 'Labor Union and Labor Relations Adjustment Act,' came into effect. This amendment is significant not only because it addresses issues related to damage compensation in connection with disputes but also because it expanded the scope of employers who are counterparties for collective bargaining and the subject of labor disputes.

In particular, the IT industry typically features a parent-subsidiary structure, unit-based service organizations, and various indirect employment structures, including QA, CS, and outsourcing, making service terminations and organizational restructuring relatively frequent. Due to these characteristics, many believe the impact of the amended law may manifest sooner in this industry than in others. In fact, on the very first day of the law's enforcement, hundreds of subcontractor unions reported demanding negotiations with primary contractors, drawing considerable interest within corporate practices.

In this article, I will briefly summarize the major changes in the revised labor law and the legal issues and practical considerations that may particularly arise in the IT industry.

[Question]

What are the major issues that may particularly arise in the IT industry following the implementation of the amended 'Yellow Envelope Law,' and what should companies pay attention to?

[Answer]

1. The Expansion of the Scope of Employers and the Conflict with the Structure of the IT Industry

One of the most significant changes in this amendment is the expansion of the definition of employers. The amended law clearly stipulates that even if one is not a direct party to an employment contract, they can be regarded as an employer if they can substantively and concretely control or decide working conditions.

This criterion could pose problems not only in traditional primary-subcontractor structures but also in parent-subsidiary relationships frequently seen in IT companies. For instance, if a platform operator or parent company exercises actual decision-making power over service direction, workforce management, work schedules, or wage levels, even if they are formally separate entities, there is a possibility they may be seen as counterparties for collective bargaining to a certain extent.

Of course, mere management under a contract or simple supervisory control will not immediately confer employer status. However, if a primary contractor or parent company substantively controls core working conditions such as working hours, work schedules, or workforce size during actual operations, that may be a basis for disputes, prompting companies to reassess their organizational structure.

2.  The Boundary Between “Business Judgment” and Subjects of Collective Bargaining

One aspect that may cause confusion related to the amended law is the boundary between business judgment and subjects of collective bargaining.

According to interpretations by the Ministry of Employment and Labor, changes in corporate organization such as mergers, demergers, business sales, or service terminations themselves are not subjects of collective bargaining. However, if decisions made in such changes actually result in measures affecting workers' working conditions, the situation may differ.

For example, if work disappears or positions are eliminated following service terminations or business restructuring, and as a result, issues arise regarding reassignment or workforce adjustments, then those points may become subjects for collective bargaining. Especially when workforce adjustments are objectively anticipated, demands regarding job security or reassignment methods may become subjects of labor disputes.

In the IT industry, organizations are often structured around service units, and service terminations or organizational restructuring occur relatively frequently. Therefore, it is conceivable that business judgments may now more frequently become the starting points for labor disputes than before.

3. Considerations Following the Implementation of the 'Yellow Envelope Law'

A particularly important point for companies following this amendment is that it has become more difficult to deny collective bargaining obligations based solely on a formal corporate structure than it was before.

For example, if a parent company or primary contractor makes actual decisions regarding service direction or workforce management yet responds to labor disputes simply by asserting that “there is no responsibility because it is a separate entity,” this reasoning may not provide sufficient legal defense. Though this amendment does not mandate direct employment, it more clearly indicates that whoever substantively influences and determines working conditions may be recognized as an employer, thereby incurring collective bargaining obligations.

Additionally, if a reassignment made after service termination or organizational restructuring results in only formal measures without actual work, this may not merely be viewed as personnel management, but rather as a long-term status of effectively being on standby or pressure to resign. Therefore, companies need to prepare for labor relations responses, including workforce redeployment plans and employment stability measures, from the very stages of examining organizational restructuring or business termination.

Ultimately, the core of labor-management disputes following this amendment is likely to focus more on the actual operational structure regarding who directed work and determined working conditions than on the corporate structure or contract wording itself. In IT companies, since service operations and workforce management are closely linked, it is essential to preemptively examine organizational operations and decision-making structures and establish a corresponding labor-management relations response system.

The amendment to the Yellow Envelope Law is not a law that mandates direct employment for companies, as commonly discussed. However, it is evident that through this amendment, the structure for holding accountable those who effectively determine working conditions has become clearer.

In particular, in the IT industry, where the parent-subsidiary structure and outsourcing operations are common, this change is likely to affect not just legal amendments but also the actual organizational operation methods and labor-management relations. Therefore, rather than responding merely with the formal logic of