Standard Contract for Software Workers Established... Pilot Implementation Starting This Month

[Asia Economy Reporter Seulgi Na Cho] The Ministry of Science and ICT and the Seoul Regional Employment and Labor Office announced on the 13th that they will prepare a standard contract for non-affiliated software (SW) workers to improve their working conditions and promote fair contracting practices, and will pilot it at 400 SW workplaces in the Seoul area.

This is a follow-up measure to the supplementary plan for reducing working hours in the SW sector reported at the National Policy Issue Inspection Coordination Meeting in February. The Ministry of Science and ICT identified that the basic working environment of approximately 26,000 domestic SW freelancers is vulnerable, and since the second half of last year, they have been promoting the development of a standard contract suited to field conditions.

The SW standard contract was developed in two types: the "SW Standard Employment Contract" and the "SW Standard Subcontract Contract." This reflects that the contract forms of SW freelancers consist of employment contracts (41.4%) and subcontract contracts (42.0%).

The SW Standard Employment Contract can be used when an SW freelancer enters into a short-term or hourly employment contract with a user and is subject to the user's direction and supervision. It specifies the work content, working hours, and break times handled by the SW freelancer, and clearly defines vacation regulations. It also requires specifying the wage amount, payment date, and payment method, and imposes an obligation on the user to prepare and provide the employment contract.

The SW Standard Subcontract Contract can be used when an SW freelancer contracts with a business on a project basis and autonomously handles the entrusted work as a one-person business operator. It requires specifying the scope of subcontracted work handled by the SW freelancer, the remuneration amount, and payment method. Additionally, it stipulates that the subcontracted deliverables are, in principle, jointly owned by the subcontractor and the contractor.

However, if a subcontract contract is concluded between a business with annual sales of 1 billion KRW or more subject to the Act on the Fairness of Subcontract Transactions and an SW freelancer, the ‘SW Subcontract Standard Contract’ distributed by the Fair Trade Commission must be used.

The Seoul Employment Office will pilot the standard contract from this month targeting 400 SW workplaces to promote its field use. The pilot project targets 400 small and medium-sized software businesses with fewer than 50 employees, where working conditions are relatively poor, and for workplaces with 50 or more employees, the distribution of the SW standard contract will be promoted in connection with the Ministry of Employment and Labor’s ‘Working Hours Reduction Field Support Team’ activities.

The Ministry of Science and ICT explained, "This pilot project will not only distribute the standard contract but will also be conducted in a way that labor inspectors and certified labor attorneys provide workplace labor management and working condition consulting together, so it is expected that the working environment of SW freelancers will be substantially improved."

The Ministry of Science and ICT also plans to prepare incentive measures that grant additional points to businesses using the SW standard contract during public SW project technical evaluations to promote the use of the SW standard contract.

Jung Min-o, head of the Seoul Employment Office, said, “We expect that the distribution of the SW Standard Employment Contract will establish a transparent and fair employment relationship between users and workers,” adding, “In particular, we hope that the improvement of the poor working environment of SW freelancers will serve as a foundation for strengthening the competitiveness of the SW industry, a national strategic industry.”

Song Kyung-hee, Software Policy Officer at the Ministry of Science and ICT, said, “With the introduction of the SW standard contract, we expect that SW freelancers who have had difficulties receiving legal protection will be properly treated and protected,” and added, “We will continue to strive to create a better working environment for both software developers and companies.”

The SW standard contract and workplace guidance materials can be downloaded from the websites of the Ministry of Science and ICT and related organizations starting today.

This content was produced with the assistance of AI translation services.