South Korea’s Yellow Envelope Act has passed Parliament and is already sparking fierce opposition. The legislation expands labor rights and reshapes corporate liability. Supporters hail it as historic, while employers and foreign firms warn of damaging consequences. Consequently, the debate over labor reform has sharply intensified.
The bill, driven by President Lee Jae Myung’s ruling Democratic Party, cleared Parliament with overwhelming support. Lawmakers broadened the definition of “employer” and widened the scope of labor disputes. Subcontracted workers now gain bargaining rights previously denied. Furthermore, companies lose the ability to claim damages against striking workers, a tool unions have long opposed.
Business groups argue the new rules will paralyze management. Six leading industry associations issued a rare joint statement condemning the reforms. They said the expanded liability will invite endless lawsuits. Moreover, they warned the law could weaken autos, shipbuilding, and steel manufacturing, Korea’s industrial backbone.
Executives from major conglomerates also voiced alarm. They fear nearly all corporate decisions could now face strike action. One senior executive argued that every business decision touches working conditions, creating constant risk. In addition, construction and heavy industries expect more delays and higher costs.
Foreign investors have expressed deep concerns. The American Chamber of Commerce in Korea and the European Chamber of Commerce in Korea both criticized the law. They warned that the South Korea Yellow Envelope Act creates legal uncertainty for multinational businesses. Therefore, some companies may reconsider their Korean operations.
General Motors Korea added to the alarm by raising the possibility of reassessing its local presence. GM Korea CEO Hector Villarreal reportedly urged officials to reconsider the bill before passage. He stressed that Korea already faces high labor risks. With US tariffs hitting imported Korean vehicles, GM’s challenges may deepen further.
Meanwhile, labor unions celebrated the law’s approval. The Korean Confederation of Trade Unions called the bill the fruit of decades of activism. They argued the reform finally protects workers from intimidation tactics. Moreover, they see it as a step toward balanced labor-management relations.
The Democratic Party also moved to advance another sweeping corporate reform through changes to the Commercial Act. This proposal would impose stricter voting rules on large listed firms and expand independent audits. Business lobby groups reacted with alarm, saying it could further weaken competitiveness.
Analysts predict that disputes will intensify as the law takes effect. Employers warn of litigation, while unions prepare for stronger bargaining. The government now faces the challenge of balancing worker rights with Korea’s global competitiveness. The South Korea Yellow Envelope Act has already become one of the country’s most divisive economic reforms.
