1. Meaning of DEI as a Social Aspect of ESG Management
In recent times, governments, global investors, and companies have increasingly emphasized the importance of systems that prioritize basic human welfare and dignity, alongside ESG management that aligns with the interests of all stakeholders. Notably, the social (S) aspect of ESG management, which centers on diversity, equity, and inclusion (DEI) in the workplace, has garnered significant attention.
So, what exactly is DEI? Diversity refers to differences among individuals within a group, encompassing age, religion, gender, and race. The term covers every facet of human beings, including existing or recognized differences that influence human relationships and interactions, as well as demographic diversity.
Equity refers to fairness, acknowledging that not every member of society starts at the same level and that systematic changes within a group are necessary to provide fair opportunities. For example, providing an optical character recognition (OCR) device or other devices for people with disabilities, as well as establishing a fair reward system are measures to reinforce equity.
Inclusion is the practice of ensuring every individual is welcomed, supported, and recognized for their value. It encompasses efforts to create an environment where every member can succeed and feel valued, welcomed, respected, and supported.
2. Importance of DEI Management and Current Practices of DEI in Korean Workplaces
Companies that prioritize DEI management can attract talents from diverse backgrounds. Integrating these individuals into the workforce often fosters creativity and innovation, enhancing the company's capacity to address issues from multiple perspectives and improving the quality of management decisions. Furthermore, in today's media-driven environment, where consumers and public opinion wield significant influence, companies that emphasize DEI can cultivate a positive image by better understanding and effectively responding to the diverse needs of consumers.
Therefore, companies are now paying great attention to DEI management to achieve these benefits. Additionally, with the reinforcement of ESG regulations and disclosure frameworks, more Korean companies are publicly disclosing their DEI policies and performances through sustainable management reports and DEI reports.
Meanwhile, companies' strategies to improve DEI significantly depend on the history, systems, and cultural context of their society. For instance, while DEI discussions in the U.S. mainly focus on racial discrimination, in Korea, issues like gender discrimination and maternity protection are more prominently featured under the DEI framework. Many Korean companies use factors such as the percentage of female employees or female managers as key indicators of their DEI efforts.
3. Labor Laws and Systems Related to DEI in Korea
DEI often garners more attention from the perspective of HR or management rather than from a legal standpoint. DEI in the workplace refers to fostering diversity, providing equal opportunities, and cultivating an inclusive environment in various aspects of HR management, such as recruiting and hiring, performance evaluation and promotion, compensation management, education and training, work-family balance systems, and organizational culture. In other words, DEI is typically viewed as a strategic approach to ensuring the sustainable growth and competitiveness of an organization.
However, DEI management extends beyond managerial aspects. Korean labor laws have various provisions related to DEI in the workplace. Without rigorous management and compliance checks concerning these provisions, companies may face civil, criminal, or administrative liabilities related to DEI issues. Therefore, it is crucial for organizations to strategically implement DEI initiatives and rigorously comply with relevant labor laws and statutes. Korean laws related to DEI in the workplace include the Labor Standards Act, the Equal Employment Opportunity and Work-Family Balance Assistance Act, the Fair Hiring Procedure Act, and the Act on the Prohibition of Discrimination Against Persons with Disabilities and Remedy Against Infringement of Their Rights.
[Major DEI-Related Provisions]
| Relevant System | Major Content | Relevant Legislation |
|---|---|---|
| Childcare Leave | Where a pregnant female employee applies for a leave of absence to enjoy maternity protection or an employee applies to raise his or her children (including adopted children) aged eight years or younger or in the second grade or lower of elementary school, respectively, the employer shall grant it. | Article 19 of the Equal Employment Opportunity and Work-Family Balance Assistance Act |
| Family Care Leave | Where an employee applies for a leave of absence to care for his or her grandparents, parents, spouse, parents of his or her spouse, children, or grandchildren on the grounds of their disease, accident, or senility, the employer shall grant it. | Article 22-2 of the Equal Employment Opportunity and Work-Family Balance Assistance Act |
| Monthly Menstrual Leave | Where a female employee files a claim for menstrual leave, the employer shall grant her one day of menstrual leave per month. | Article 73 of the Labor Standards Act |
| Time for Medical Examination of Unborn Child | Where a pregnant employee claims time necessary for a periodic medical examination of pregnant women, the employer shall grant permission for such time. | Article 74-2 of the Labor Standards Act |
| Maternity Leave Before/After Childbirth | An employer shall grant a pregnant woman a total of 90-day maternity leave (120-day maternity leave, if she is pregnant with at least two children at a time) before and after childbirth. | Article 74 of the Labor Standards Act |
| Miscarriage/Stillbirth Leave | Where a pregnant female employee requests a leave before and after childbirth due to her experience of miscarriage, etc., the employer shall allow her to use the leave. | Article 74 of the Labor Standards Act |
| Leave of Absence for Subfertility Treatment | Where an employee applies for a leave of absence to receive subfertility treatment such as artificial insemination or in vitro fertilization, the employer shall grant a leave of absence to the employee for a period not exceeding three days a year. | Article 18-3 of the Equal Employment Opportunity and Work-Family Balance Assistance Act |
| Paternity Leave | Where an employee requests leave on grounds of his spouse's childbirth, the employer shall grant leave for 10 days. | Article 18-2 of the Equal Employment Opportunity and Work-Family Balance Assistance Act |
| Family Care Leave | Where any employee applies for leave to urgently care for his or her family on the grounds of their disease, accident, or senility or to rear his or her children, the employer shall grant it. | Article 22-2 of the Equal Employment Opportunity and Work-Family Balance Assistance Act |
| Reduction of Working Hours During Pregnancy | Where a female employee who has been pregnant for not more than 12 weeks or not less than 36 weeks requests the reduction of her work hours by two hours a day, the employer shall permit it. | Article 74 of the Labor Standards Act |
| Modification of Start and End Times of Work Hours During Pregnancy | Where a pregnant female employee requests to modify the start and end times of work hours while maintaining the contractual daily work hours, the employer shall permit such modification. | Article 74 of the Labor Standards Act |
| Reduction of Working Hours for Periods of Childcare | Where an employee applies for a reduction of working hours to rear his or her children aged eight years or younger or in the second grade or lower of elementary school, the employer shall grant it. | Article 19-2 of the Equal Employment Opportunity and Work-Family Balance Assistance Act |
| Reduction of Working Hours for Family Care | Where an employee applies for a reduction of working hours to care for his or her family on the grounds of their disease, accident, or senility, or where an employee aged 55 years or older applies for a reduction of working hours to prepare for his or her retirement, or where an employee applies for a reduction of working hours to pursue his or her studies, the employer shall grant it. | Article 22-3 of the Equal Employment Opportunity and Work-Family Balance Assistance Act |
| Flexible or Selective Work Hours System | An employee may change their ordinary working hours or working days, or select and adjust their working hours or workplace, etc. | Articles 51 and 52 of the Labor Standards Act |
| Establishment of Workplace Child Care Centers | Each business owner, who operates a workplace larger than a certain size, shall establish workplace child care centers. | Article 14 of the Child Care Act |
| Prohibition of Demand of Personal Information including Place of Birth | No recruiter shall demand physical attributes (appearance, height, weight, etc.), place of birth, marital status, and property of a job applicant, as well as academic background, occupation, and property of a job applicant's lineal ascendant or descendant and sibling. | Article 4-3 of the Fair Hiring Procedure Act |
| Provision of Reasonable Accommodation to Persons with Disabilities | Each employer shall provide accommodation to persons with disabilities so that they can work on an equal basis with persons without disabilities in performing their respective duties. | Article 11 of the Act on the Prohibition of Discrimination Against Persons with Disabilities and Remedy Against Infringement of Their Rights |
Beyond the provisions mentioned above, issues such as prevalent workplace bullying, sexual harassment, or stalking in the workplace, as well as high risks of industrial accidents due to unsafe working environments, can significantly lower the perceived level of DEI among employees. Therefore, establishing internal investigation or response processes for human rights violations like workplace bullying, sexual harassment, and stalking, as well as establishing and maintaining safety and health management systems to prevent industrial accidents, are also included in the broad terms of DEI management.
4. Importance of Labor and Human Rights Compliance for DEI Management
Compliance refers to company policies or control systems designed to prevent violations of laws and to demonstrate to external government authorities that the company takes measures to uphold legal standards. Even if a company implements systems to enhance DEI for its employees in areas not governed by specific laws and statutes, neglecting labor compliance can significantly undermine the reputation of its DEI management efforts.
Compliance and DEI management complement each other reciprocally. It is important for organizations to establish policies and programs to practice DEI while also implementing a compliance system that rigorously adheres to relevant laws and statutes, thereby managing DEI enhancement and legal risk management simultaneously.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.