conducted by the NHRCK in 2015, domestic workers in informal sector experience
significant unfair treatments, such as low hourly wages, assault, sexual harassment, and
personal disregard by employers, revealing that they need protection by the law
While the industry welcomed the implementation of the Domestic Workers Act, they also
raised concerns that if labor costs rise due to the enforcement of the law, the service fees will
increase, and platform companies with large capital will dominate the market. The originally
proposed bill included the cultivating public service providers and social enterprises in order
to prevent excessive profits in the market and improve the working conditions of workers,
but was not discussed at the time of legislation.279)
B) Implementation and Limitations of the Domestic Workers Act
The limitation of the Domestic Workers Act is that the workers protected by the law is
limited to domestic workers who have employment contracts with certified domestic service
providers. In order to expand the number of people subjected to the law, it is necessary to
first secure a service market centering on domestic service providers, but it is also pointed
out that there is a lack of incentives. Details are as following:280)
First assertion is that the obligations of domestic service providers are excessive compared
to the government support. The housework has been mainly done through employment
agencies, but as a housework service provider, additional costs of around 30%, such as VAT
on sales, severance pay, social insurance premiums, and annual allowances, will incur.
Furthermore, according to the law, the service providers must guarantee at least 15 hours of
work, and must consider costs for compensation for damages, grievance handling, and
conflict management. The government has decided to subsidize VAT exemption, national
pension, and some of the employment insurance premiums, but the current employment
agency, which are mostly small private businesses, seems to lack incentives to bear these
additional costs and apply to be certified. In this case, concerns are also raised that problems
279) Hankyoreh, Domestic Workers Act implemented, but there are concerns for the platform operators dominating the
market, Jun. 13, 2022.
280) Choi, Young-mi, Implementation and Prospects of the Domestic Workers Act, Monthly Labor Laws, Jun. 30, 2022;
Oh, Eun-jin, Discussion on the Significance of Establishing the Domestic Workers Act and Practical Application to
the Domestic Workers, Jun. 2021.
116
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