[Op-Ed] Fears Grow That the “Framework Act on Working People” Will Shrink the Labor Market; Leave It to Firms and Individuals

On January 20, the government announced that it would move in earnest to enact the “Basic Act for Working People.” The bill aims to become the highest-level labor norm guaranteeing eight basic rights, including the right to form associations, to about 8.7 million specially employed workers such as platform workers and freelancers, regardless of contract type. It is a national declaration aimed at addressing blind spots in labor protection created by the digital transition and strengthening universal labor rights.

In particular, the bill introduces a “presumption of worker status” system, shifting the burden of proof from the worker to the employer. If a labor provider presents only the required conditions, he or she will be regarded as a worker unless the employer rebuts the claim, allowing demands for powerful rights such as severance pay. With labor inspectors also expected to gain the authority to require the submission of materials, those previously in contractual relationships under civil law would effectively come under the direct reach of labor law.

The problem is that a law created for protection could instead bring about the “employment paradox” of reducing jobs. If companies must bear severance pay and the four major social insurance contributions for every freelancer, they are more likely to forgo hiring altogether or replace workers with automation because of the added cost. A law intended to help vulnerable workers may, in fact, restrict their opportunities to work and shrink the labor market as a whole.

If platform operating costs rise, this could ultimately lead to higher prices for market services. A platform industry official expressed concern, saying, “These costs will ultimately be borne by the self-employed and consumers.” This shows that stronger labor protections can be passed on as an economic burden to both businesses and users.

In addition, by protecting platform workers as a separate status, the bill risks entrenching an “intermediate class” with fewer rights than existing employees. As the legal safety net expands, the vested interests of existing entrants may be strengthened, while newly entering young people may face higher barriers, weakening the market’s flexibility and dynamism. For this reason, opposition to the bill exists even within labor circles that are ostensibly meant to benefit from it, and the likelihood of negative effects on the labor market as a whole is high.

Another issue is the freedom of choice of professional freelancers who work autonomously. Many IT developers, designers, video editors, translators, and marketers contract with multiple companies at the same time and work on a performance basis. What they need is not employment stability but freedom of contract and mobility. If the Basic Act for Working People effectively binds them into a dependent relationship with a specific user of their labor, their income structure and way of working itself could be undermined.

To solve this, “negative regulation,” which allows the market to move flexibly, should take priority over uniform legislation. All forms of contracts and work arrangements should be permitted except those explicitly prohibited, so that a variety of job experiments can take place autonomously. Rather than the state prescribing everything, there needs to be policy patience that allows companies and individuals to find mutually beneficial models on their own.

Instead of forcibly changing forms of employment, policies that reduce the “actual risks” arising in the labor process are far more efficient. Problems such as nonpayment and unfair contract termination can be sufficiently improved through fair trade rules, standard contracts, and dispute mediation systems. Simply binding platform workers under labor law without exception is nothing more than bureaucratic convenience and, in reality, may only intensify market distortions and conflict.

We must not forget that true labor welfare comes not from protection imposed by the state, but from quality jobs created by businesses breathing freely. The government should step back from the role of manager and focus on pulling out the spikes of outdated regulation so that entrepreneurship can flourish to the fullest. Creating a “field of opportunity” where anyone can freely contract and take on challenges is the true role the state should play.

Jihyun Seo, Intern Researcher, Center for Free Enterprise (CFE)

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Original title: [칼럼] '일하는 사람 기본법' 노동 시장 위축 우려 커, 기업과 개인에 맡겨야

Author: Ji-hyun Seo

Date: 2026-02-10

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&idx=28599