[Editorial] The “Basic Act on Working People” Would Take Away the Right to Work Freely

It Will Lead to Fewer Contracts and Less Employment for Freelancers, Special Employment Workers, and Platform Workers

An Expansion of Informal Contracts and Transactions Is Expected to Create a Vicious Cycle in Rights Protection

The government is pushing the “Framework Act on Working Persons” (also known as the presumption of employee status system). Its stated purpose is to protect so-called “workers outside the scope of rights,” such as freelancers, special employment workers, and platform workers, who fall outside the existing framework of the Labor Standards Act. The Center for Free Enterprise (CFE) expresses concern that, contrary to the law’s stated intent, it will not protect the rights of working people but rather deprive them of the right to work freely.

It is understandable to recognize that, as forms of work change rapidly, the legal system has failed to keep pace, creating gaps in protection. However, although the Framework Act on Working Persons is called a “framework act,” in practice it moves toward strongly regulating the entire range of labor service contracts in a manner akin to employment relationships.

It bundles together a wide range of obligations at once, including mandatory delivery of written contracts, restrictions on termination and modification of contracts, efforts to guarantee days off and leave, rules on harassment, and the application of occupational safety and health measures. The problem is that the more such regulations expand, the more the market responds not by protecting people more, but by using fewer people. A law intended to grant rights may instead reduce contracts and employment.

First, this law carries a high risk of effectively turning the “freedom of contract,” which is at the core of freelance and platform work, into something resembling an employment relationship. In this market, multiple contracts and short-term or intermittent work are common, and the freedom to choose assignments is one of its advantages. But if restrictions are placed on terminating or changing contracts and the risk of disputes increases, businesses will find entering into contracts burdensome in itself. In the end, they will reduce the volume of contracts or raise their standards, hiring fewer people. This creates the paradox that the vulnerable workers meant to be protected may instead lose work opportunities first.

Second, the stronger the regulation becomes, the greater the likelihood that transactions will become informal. Contrary to expectations that mandatory written contracts or the wider use of standard contracts will improve transparency, the market will avoid compliance if the cost of meeting regulatory requirements becomes excessive. If ordinary contracts shrink and gray areas expand, protecting rights will become even more difficult.

Third, it could become a pathway for expanded follow-up legislation. Once this framework act is enacted, more regulations may continue to be added under the justification that they are “consistent with its purpose.” Regulations accumulate, and accumulated regulations standardize transaction forms. As a result, diverse job experiments and flexible forms of employment will inevitably lose their place.

Fourth, this is a framework act that everyone will oppose. Not only small business owners, startups, platform companies, and other related firms and self-employed people as the entities providing employment, but even the freelancers, special employment workers, and platform workers directly concerned will ultimately oppose it.

If the government truly wants to protect vulnerable workers, it needs a different approach. Rather than expanding regulation across the board, priority should be given to lowering the cost of disputes and making the contractual order more transparent. More realistic measures would include predictable standards, swift dispute mediation, reducing information asymmetry, and expanding the voluntary use of standard contracts.

The rights of working people are protected more firmly when their right to work freely in the market is guaranteed. That is precisely the path that can protect both the labor rights and the jobs of freelancers, special employment workers, and platform workers as new forms of labor.

2026. 1. 22.

Center for Free Enterprise (CFE)

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Original title: [논평] 일하는사람기본법’, 자유롭게 일할 권리 빼앗을 것

Author: Center for Free Enterprise (CFE)

Date: 2026-01-23

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=comment&pn=1&idx=28536