Korea Business Review · Section
K KNOWLEDGE
Free
K지식
Employment Contracts, Annual Salary Contracts, and the Labor Standards Act: Which Prevails?
Employment and annual salary contracts are agreements between parties, but they cannot fall below the minimum standards set by the Labor Standards Act (Articles 3, 4, and 15 of the Labor Standards Act). The minimum wage for 2026 is set at 10,320 won per hour (2,156,880 won per month), and contract provisions falling short of this are automatically voided, with statutory standards applying instead (Ministry of Employment and Labor Notice No. 2025-47). The hierarchy of documents runs from the Constitution to the Labor Standards Act, collective agreements, rules of employment, and employment contracts, but if a lower-level document contains more favorable conditions, that part prevails (Principle of Priority for Favorable Conditions, contrary interpretation of Article 97 of the Labor Standards Act). An annual salary contract is a separate agreement specifying or modifying wage conditions, but provisions violating mandatory regulations, such as an annual salary scheme including severance pay, are generally void (Supreme Court Full Bench Decision 2007Da90760 delivered on May 20, 2010). The Supreme Court Full Bench decision in December 2024 abolished the 'fixity' requirement in calculating ordinary wages, opening the way so that ordinary wage status cannot be excluded solely by a tenure-condition phrase in a contract.
박찬호 선임기자 · 08/12/2026
Read more →
K지식
Blistering Korean Peninsula: How Much Hotter Has South Korea Become Over the Past Decade?
강지혜 선임기자 · 08/02/2026
K지식
Same AI, Different Results: Core Principles of Prompt Writing According to Experts
이우리 선임기자 · 06/30/2026
K지식
How Strategy and Tactics Differ: The Crucial Distinction Between Designing Victory and Executing It
박찬호 선임기자 · 06/27/2026
K지식
What is AX? A Transformation That Changes Not Just Tools, But 'How We Work'
이태민 책임기자 · 06/23/2026
경제용어
Inflation and Interest Rates: The Two Invisible Hands Shaping Corporate Fate
Inflation and interest rates are core variables underlying all corporate decision-making, including production costs, pricing, financing, and investment. Rising inflation increases the burden of raw materials and labor costs, with the ability to pass costs onto prices determining financial performance. Interest rates represent both the cost of capital and a traffic light for investments, with corporate borrowing thresholds rising as corporate bond and loan rates settled in the 4% range in 2026. Both variables move in tandem through monetary policy, and inflation trends serve as a signal for upcoming interest rate changes. With the base rate frozen at 2.50% and inflation in the high 2% range as of 2026, fortunes diverge by industry and size, requiring businesses to prepare by managing costs and capital simultaneously.
이태민 책임기자 · 06/22/2026
K지식
What is PEST Analysis? 4 Lenses to Read the 'Outside World' Surrounding Your Business
PEST analysis is a strategic management tool that thoroughly examines the uncontrollable macro-environment facing a company through four lenses: Political (P), Economic (E), Social (S), and Technological (T). Political factors act as a force changing the 'rules of the game' through policies, regulations, and taxes, exemplified by the electric vehicle subsidy case where 'policy is the market.' Economic factors (interest rates, exchange rates, inflation) directly affect consumption and investment decisions and must be viewed as interconnected flows rather than isolated indicators. Social factors (changes in values and perceptions) and technological factors (new technologies and battery competition) alter the market size and competitive landscape itself, with all four factors working in an interconnected manner. PEST is used to paint a big picture during the new business and market entry stages, which then leads to SWOT, and there is also an expanded PESTEL version that adds environmental and legal factors.
이우리 선임기자 · 06/18/2026
K지식
The Probationary Period Is 'Employment,' Not Just a 'Test' — Myths and Truths
Probationary workers are also official employees under the Labor Standards Act. The probationary period is a time for new hires to adapt to their tasks and organization, and for employers to evaluate their job skills and organizational fit. However, since probation is a stage following official hiring, probationary workers are still employees under the Labor Standards Act. If the employment contract is signed for one year or longer, 90 percent of the minimum wage can be paid for the first three months. With the minimum wage rising to 10,320 won per hour for 2026, the reduced hourly wage during probation is 9,288 won, which corresponds to 90 percent of 10,320 won. However, minimum wage reductions cannot be applied to all probationary workers. Reductions are not permitted if the employment contract period is less than one year. In addition, minimum wage reductions cannot be applied to workers engaged in simple physical labor corresponding to major group 9 of the Korean Standard Classification of Occupations, and the full minimum wage must be paid in such cases. The reduction application period is limited to a maximum of three months. While it is possible to set the probation period itself to three months or longer, 100 percent of the minimum wage must be paid for the period exceeding three months. The probationary period must be clearly stated in the employment contract to be recognized as a valid probationary agreement. The probationary period is included in the length of service, and the employment relationship does not start anew simply because the probation has ended. Furthermore, dismissal notice regulations may not apply to workers with a continuous service period of less than three months, but valid reasons are still required for the dismissal itself.
이우리 선임기자 · 06/15/2026
K지식
What is a Digital Twin? The Technology Replicating Real-World Factories and Cities in Virtual Space
Virtual twins break down before physical factories do—the operating principle of digital twins. What if you could know an airplane engine will fail before it actually happens? A digital twin creates a 'digital twin' by replicating real-world factories, facilities, cities, and even human organs in a virtual space, streaming data collected from reality in real time so the virtual twin moves identically to the real world. Later, in 2002, Professor Michael Grieves of the University of Michigan presented a conceptual model consisting of physical products, virtual products, and the data flow connecting them during a Product Lifecycle Management (PLM) lecture, establishing the academic framework. The name 'digital twin' itself is known to have been formalized by NASA's John Vickers in the early 2010s.
이우리 선임기자 · 06/11/2026
K지식
How Is Election Management Conducted? And Why Is It Important?
The National Election Commission (NEC) is an independent constitutional body that does not belong to the executive or legislative branches, having been established through separation from the executive branch following the March 15 fraudulent election and the April 19 Revolution. The NEC consists of nine members appointed equally by the President, the National Assembly, and the Chief Justice of the Supreme Court, and manages elections and referendums through a four-tiered nationwide organizational network spanning central, city/provincial, district/city/county, and town/ship/neighborhood levels. The entire process—including candidate registration, campaigning, early voting, Election Day voting, and vote counting—is operated with a focus on ensuring transparency and trust, combining machine sorting with human visual review and allowing observation by political parties and voters. However, during the 9th simultaneous local elections on June 3, 2026, a shortage of ballot papers occurred at 50 polling stations, including the Jamsil area in Songpa-gu, Seoul, leading to temporary suspension of voting at 22 locations and some voters giving up their right to vote. This incident, attributed to lowered minimum limits for ballot printing and miscalculated distribution predictions, resulted in the substantial infringement of citizens' right to vote and even triggered protests claiming re-elections and fraudulent voting, strongly raising the need for a thorough and transparent investigation of the causes and recurrence prevention measures.
이지영 기자 · 06/10/2026
