Outsourcing
The use of contract labour, in circumstances where such labour is supervised/managed directly by the receiving company, is heavily regulated and limited in Korea, under the Dispatched Workers Protection Act.
Pursuant to the Act, contract labour may only be legitimately dispatched from licensed agencies. Agencies may only supply employees for certain types of work as listed in the Act, which are generally menial and support tasks.
In a dispatch relationship, wages remain the principal responsibility of the dispatch agency, while the receiving company is principally liable for workplace health and safety.
Discriminatory treatment against dispatch workers is prohibited by the Act. That is, dispatched workers must not be discriminated against as compared with the regular workers engaging in the same or similar work in the receiving company.
If an individual dispatched worker is placed to work in the same workplace for a period exceeding 2 years, then the receiving company will be obliged to employ the worker directly.
Contracting
Companies may engage persons (eg consultants) as independent contractors. However, Korean courts will examine the substance of the relationship and will consider a person to be an employee if the relationship appears to be one of employment.