After the so-called Yellow Envelope Law — an amendment that strengthens prime contractors' liability for subcontracted workers — took effect, small-business groups have raised concerns.
Under the law, subcontracted workers can demand collective bargaining from prime contractors, and companies face limits on suing striking workers for damages.
Small-business representatives warn the law could expand the scope of labor disputes, increasing the risk of halted transactions and cost-shifting.
A small-business official said prime contractors may reduce or suspend orders to avoid bargaining with subcontractor unions, and they might pass higher labor costs down to subcontractors.
They also warned the law leaves unclear who qualifies as an employer and which management decisions count as subjects of labor disputes, which could create confusion in practice.
The Korea Federation of SMEs and five other business groups warned immediately after the bill passed last year that it could trigger legal conflicts between labor and management and called for policy adjustments.
Small-business organizations urged close monitoring of conditions on the ground and asked lawmakers to enact follow-up measures to minimize unintended consequences.
Meanwhile, the Ministry of SMEs and Startups said it will offer labor and legal consulting and continue soliciting industry feedback to reduce confusion.
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