Labor inspections to shift to local governments for small firms from December

Central government inspects just 54,000 workplaces a year

Local governments to inspect, investigate wage arrears and safety law violations

Complaint cases, union law and serious accidents law excluded

120 inspectors deployed; each to handle 30 sites in first year

Minister of Employment and Labor Kim Young-hoon speaks at an awards ceremony for outstanding labor inspectors held at the Jeon Tae-il Memorial Hall in Jongno-gu, Seoul, on Aug. 29.

The government will delegate labor inspection authority over workplaces with fewer than 30 employees to local governments starting in December. The move aims to close oversight gaps, as central inspections currently cover only 2.6 percent of all businesses.

Local labor inspectors will check for wage arrears and violations of the Occupational Safety and Health Act. They will directly investigate and impose fines on workplaces that fail to comply with corrective orders. The move shifts part of the labor inspection authority long concentrated in the central government to local governments, strengthening on-site oversight of small businesses.

However, cases filed as complaints or accusations, and licensing and approval matters under labor relations laws, are excluded from the delegation. Also excluded are issues related to the Dispatched Workers Act, the Trade Union and Labor Relations Adjustment Act, and the Serious Accidents Punishment Act. Local governments will not inspect all small businesses at their own discretion; only workplaces selected in advance by joint central-local government councils will be subject to inspection.

[Courtesy of the Ministry of Employment and Labor]

The Ministry of Employment and Labor held the first National Labor Inspection Council on Thursday and unveiled the "Plan to Establish and Implement a Local Labor Inspection System." The plan sets out details on the scope of inspections, criteria for selecting subjects, and investigation and follow-up procedures ahead of the Dec. 8 implementation of the Labor Inspectors' Duties Act.

Currently, the ministry inspects about 54,000 workplaces a year, or roughly 2.6 percent of all businesses. The government has determined that central government personnel alone face structural limits in inspecting very small and small businesses. This is the background behind splitting labor inspection duties between the central and local governments, ending 73 years of the central government's sole authority over labor inspections since the enactment of the Labor Standards Act in 1953.

The central government will focus on designing inspection policy and responding to major or high-priority cases, while local governments will use regional data and licensing records to inspect small businesses close to residents' daily lives. Key targets include industries subject to local government licensing, small construction sites, and workplaces employing large numbers of foreign workers.

The duties delegated to local governments cover workplace inspections, follow-up investigations, and the imposition and collection of fines for violations of 13 of the 19 laws currently overseen by central labor inspectors, including the Labor Standards Act. Corrective measures under the Occupational Safety and Health Act are also included. Cases initiated through worker complaints or accusations, however, will continue to be handled by the ministry. The Dispatched Workers Act, the Trade Union and Labor Relations Adjustment Act, collective labor relations laws such as those covering civil servant and teacher unions, and the Serious Accidents Punishment Act are also excluded from the delegation.

Inspection targets will be determined based on the number of local inspectors and annual inspection volume in each city and province. The government is considering gradually increasing the caseload per inspector — from 30 workplaces in the first year to 40 in the second and 50 in the third.

Each regional labor inspection council will select candidate workplaces at around twice the inspection quota, based on records of wage arrears, complaint cases, and licensing data, and the National Labor Inspection Council will then finalize the list. Businesses that have closed or suspended operations, making inspection pointless, will be excluded, while specific industries can be added if an industrial accident or public controversy arises.

Priority sectors will also vary by region. In Seoul, publishing, hospitals and clinics, and hagwons are the leading candidates; in Busan, leather, bag and footwear manufacturing along with construction and food service; and in Gyeonggi Province, textile, furniture, rubber and plastic manufacturing. Sejong's list includes medical and precision equipment and electrical equipment manufacturing, as well as health care services. Gangwon, North Jeolla, South Chungcheong and South Jeolla provinces are considering prioritizing agriculture and fisheries, which employ large numbers of foreign workers, while Jeju is looking at lodging and water transportation businesses.

Inspections will focus on violations directly tied to workers' rights, such as wage arrears and unpaid severance pay and annual leave allowances.

To reduce inconsistencies stemming from individual inspectors' discretion, the ministry will provide checklists, decision-making guides, and wage and severance pay calculation modules. On-site inspections will, in principle, be carried out in pairs.

When violations are found, very small businesses will first be given an opportunity to correct them. If a follow-up inspection shows the violation remains uncorrected, authorities will file a criminal complaint report and launch an investigation. Last year, only 0.8 percent of regular inspections at workplaces with fewer than 30 employees actually resulted in a criminal complaint.

Complex cases that local inspectors find difficult to handle can be referred to the relevant regional labor office. If a local government requests a transfer, attaching inspection results and a list of evidence, the regional labor office will review whether the transfer is warranted. If approved, the delegation for that workplace will be withdrawn and the case handed over.

The ministry will build a three-tier support system — dispatched central inspectors, regional labor offices and prosecutors — to assist local governments with investigations. One to two veteran central inspectors will be dispatched to each city and province as a first step. Regional labor offices will, in principle, respond to local governments' inquiries on legal interpretation within five days.

Local inspectors will be civil servants of grade 4 to 7 in city and provincial governments who have completed training set by the ministry. The Ministry of Interior and Safety has allocated the 120 inspectors needed as the baseline workforce to begin inspections this year, and the government has set aside 3.2 billion won ($2.39 million) this year for local inspection expenses and training. Next year's government budget proposal includes a total of 9.6 billion won for related expenses.

The ministry will run an eight-week training program for new inspectors, centered on mock case exercises, in October and November. It plans to build a simplified system using the ministry's existing computer network by November, and to launch a dedicated labor information system and mobile checklist for local governments in July next year. The ministry is also pursuing the introduction of an "AI assistant for labor inspectors" that would study labor laws, precedents and administrative interpretations to draft statements and investigation reports.

The government will also set up evaluation and control mechanisms to prevent regional disparities in inspections and possible collusion.

Starting next year, the ministry will monitor dedicated organizations and staffing, training completion rates and correction completion rates, and will incorporate the results into the government's joint evaluation starting in 2028. For illegal or improper inspections, the ministry can demand corrective orders or the cancellation or suspension of measures, and can withdraw part or all of the delegated authority if such demands are not met. A reporting center to receive complaints about misconduct by local inspectors will also be established next year.

Ahead of the law's implementation, the government will conduct joint inspections and consulting involving regional labor offices and local governments this year across nine regions, covering a total of 4,500 workplaces. Gyeonggi Province and Jeju plan to begin local inspections as soon as the law takes effect on Dec. 8.

Employment and Labor Minister Kim Young-hoon said, "Local government inspections will focus less on catching and punishing small businesses and more on preventing violations and helping them establish proper labor management systems."

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