South Korea Sees Surge in Collective Bargaining Requests as ‘Yellow Envelope’ Law Takes Effect

Seoul, South Korea – A significant shift in labor relations is underway in South Korea following the implementation of the revised Trade Union and Labor Relations Adjustment Act, often referred to as the “Yellow Envelope Act.” On its first day in effect, March 10, 2026, a total of 407 unions representing subcontracted companies filed requests for collective bargaining with 221 primary contractors, impacting approximately 81,600 workers.

What is the ‘Yellow Envelope’ Law?

The “Yellow Envelope” law aims to strengthen the rights of subcontracted workers by making it easier for them to engage in collective bargaining with primary contractors. Prior to the law, it was difficult to establish a direct employer-employee relationship between subcontracted workers and the companies they ultimately worked for, hindering their ability to negotiate terms of employment. The law seeks to address this imbalance.

Initial Response from Primary Contractors

As of Tuesday, March 11, 2026, only five primary contractors – Hanwha Ocean, Posco, Coupang Logistics Service, Busan Transportation Corporation, and Hwaseong City – had officially acknowledged the bargaining requests . This represents just 2.3 percent of the total number of requests received.

Union Affiliation and Industry Breakdown

The majority of the 407 subcontractor unions, 357 in total representing around 67,200 members, are affiliated with the Korean Confederation of Trade Unions (KCTU) . Demands for negotiations are spanning various sectors, including manufacturing, construction, and public services.

• Metal Workers’ Union: 36 subcontractor unions (9,700 members) have requested negotiations with 16 main contractors, including Hyundai Motor, Hyundai Mobis, Hyundai Glovis, HD Hyundai Heavy Industries, Hanwha Ocean, and GM Korea.
• Construction Industry Federation: Negotiations have been requested with 90 main contractors, including Hyundai Engineering & Construction and Hyundai Engineering.
• Other Sectors: Requests also came from unions representing workers in bank call centers, university cleaning staff, and local government waste management.

Next Steps and Potential Challenges

The remaining primary contractors are now internally reviewing whether they meet the criteria for bargaining requests. Those that do not may seek a review from the National Labor Relations Commission, a process that can take up to 20 days .

Potential issues going forward include differing interpretations of employer status and the scope of bargaining subjects . The Ministry of Employment and Labor has indicated that wage negotiations will only be considered in exceptional cases.

Recent Developments

On March 12, 2026, reports indicated that 407 subcontractor bargaining requests had flooded in following the law’s implementation .

The implementation of the Yellow Envelope Act marks a pivotal moment in South Korea’s labor landscape, with the potential to reshape the relationship between primary contractors and their subcontracted workforce. The coming weeks and months will be crucial in determining the extent to which this modern legislation will lead to meaningful collective bargaining and improved working conditions for subcontracted workers.