Korea mulls lifting foreign worker limit

Published April 22, 2015, in The Korea Herald

The South Korean government is considering the need to remove the limit on the number of foreign workers a company can hire, a move that would ease hiring, especially for small businesses, according to a foreign business representative in Korea.

French-Korean Chamber of Commerce and Industry chairman David-Pierre Jalicon said Trade, Industry and Energy Minister Yoon Sang-jick wants to remove the foreign worker quota by the end of the year. The quota requires companies to hire five Koreans full-time and have a yearly fiscal revenue greater than 60 million won to hire a foreign employee.

“He has been very reactive on that subject, and he has really promised us (foreign business representatives) that he will tackle the issue this year. He told us that this year the quota system will be erased,” Jalicon told The Korea Herald in an interview Friday.

Yoon made the comment during a breakfast meeting in February with ministers and foreign business leaders, said Jalicon, adding that he had been pushing the issue for at least five years before the minister addressed it.

According to Jalicon, Yoon stressed that the quota was in place to protect Korean jobs, but acknowledged that Korea’s laws were not keeping up with its fast economic development. Jalicon said a Ministry of Justice official, also present at the meeting, agreed on the need to change the policy.

“They all know their system is not good. There is discrimination, clearly. It’s discriminant and inconsistent,” Jalicon said, adding that the treatment of foreign workers in Korea was also an issue of reciprocity with how other countries treat Korean employees.

A Trade Ministry spokesperson confirmed that Yoon and Jalicon had never met one-on-one but the question may have been raised at an informal meeting. He added that Yoon may have pledged to address the visa issue, but did not promise concrete steps to deal with it.

The Ministry of Justice did not respond to a request for comment.

The foreign worker quota and related restrictions in issuing the E-7 special occupation visa are cited by businesses as a stumbling block for expansion. Foreign employees who do not have permanent resident status, Korean ethnicity, a Korean spouse or a corporate investment in Korea generally require an E-type visa. More than 18,000 E-7 visas were issued last year.

The Ministry of Justice imposed the quota in 2011 after immigration officials discovered lax labor laws were being “abused” by brokers overseas, according to an official at the Seoul Global Center, a foreign resident assistance agency run by Seoul City. The brokers were allegedly issuing work visas for people to come to Korea to search for factory jobs, with the government “losing control” of the situation, he said.

The law requires companies to employ five Korean workers for every E-7 visa holder, with exceptions for specialized professions or those with a specific recommendation by certain government agencies.

Meanwhile, the minimum investment requirement for a foreigner to start a company was doubled in 2011 from 50 million won to 100 million won. The requirement was again raised in 2013 to 300 million won for sole proprietor companies, while remaining at 100 million won for corporate investments.

Jalicon said it was important to support businesses with foreign investment, which would hire more Korean workers as they expanded, and that the foreign worker quota was hindering direct foreign investment.

“I told (Yoon), ‘You can ask us every day to bring more foreign direct investment into Korea.’ People follow the money,” he said. “As a practical man, he said, ‘OK, you’re right on this. We cannot have a double attitude. We should all go in the same direction.’ So I really hope it will change.”

 

Bae Ji-sook contributed to this article. ― Ed.

 

By Elaine Ramirez (elaine@heraldcorp.com)

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