January 29, 2026, will be remembered as a pivotal turning point in the history of corporate legal practice in Korea. Alongside the Supreme Court’s definitive ruling on performance-based compensation, innovative judicial mechanisms such as ‘K-Discovery’ and ‘ACP’ are poised to fundamentally reshape how companies exercise their rights of defense and manage legal risk.
INSIGHT 01. HR & Employment
Performance-Based Bonuses Not Deemed “Wages” for Private-Sector Employees: Supreme Court Ruling
On January 29, 2026, the Supreme Court held, in cases involving Samsung Electronics and LG Display, that performance-based bonuses do not constitute “wages” included in the calculation of average wages. The Court reasoned that where such bonuses are linked to external indicators beyond employees’ control—such as net income—they are difficult to characterize as consideration for labor.
Practical Takeaway: Even where bonuses have been paid for 14 consecutive years pursuant to annual labor-management agreements, the Court made clear that if the payment criteria remain variable, any obligation arising from an established “payment practice” may also be denied.
Action Guide
- Recalibrate Payment Metrics: It is advisable to clearly align bonus calculation criteria with financial indicators (e.g., operating profit, net income).
- Codify in Work Rules: Employers should expressly reserve discretion by stipulating that “payment may be withheld depending on management conditions,” thereby preventing the formation of a fixed payment obligation.
INSIGHT 02. Intellectual Property & Disputes
Introduction of “K-Discovery” and the Imperative of Robust Evidence Management
The introduction of “K-Discovery” under the amended Act on the Promotion of Mutually Beneficial Cooperation represents a powerful procedural shift in trade secret and technology misappropriation litigation, effectively placing the burden of proof on defendants in practice. Court-appointed experts may conduct on-site inspections of factories and offices and directly collect relevant technical materials.
Enforcement with Real Consequences: Where a party refuses such inspection without justifiable grounds, courts are empowered to deem the plaintiff’s allegations as true. In addition, destruction of evidence may result in criminal sanctions of up to three years’ imprisonment.
Action Guide
- Maintain comprehensive, digitized records of the receipt, use, and disposal of technical data.
- Develop and implement an internal “on-site inspection response manual” to ensure immediate and coordinated response to expert investigations.
INSIGHT 03. White-Collar Crime & Antitrust
Codification of Attorney–Client Privilege (ACP) and Compliance Considerations
With the introduction of Article 26-2 to the Attorney-at-Law Act, communications exchanged with legal counsel are now afforded protection from search and seizure under a formalized attorney–client privilege (ACP) framework. However, such protection does not extend to communications used in furtherance of unlawful conduct (the crime–fraud exception).
Action Guide
Document Labeling: Clearly mark all legal advisory materials with “Attorney–Client Privilege” or “ACP–Confidential” at the outset.
Segregated Storage: Maintain privileged materials separately from general business records in secure folders to preserve confidentiality and ensure enforceability of the privilege.
INSIGHT 04. Finance & Digital Assets
Strengthened AML Framework: Expansion of the Travel Rule and Stablecoin Oversight
The Financial Intelligence Unit (FIU) is set to expand the application of the Travel Rule to cover low-value transactions below KRW 1 million. In parallel, stablecoin issuers will be required to embed technical capabilities enabling “freezing” and “incineration” (burning) of assets.
Notably, the FIU is expected to be granted authority to impose immediate suspension measures on suspicious accounts even prior to a court order, underscoring the need for real-time monitoring and rapid response systems within organizations.
INSIGHT 05. Tax & Trade
Global Minimum Tax and U.S. Tariff Risk Management
With the further development of the Qualified Domestic Minimum Top-up Tax (QDMTT) regime, multinational groups will require increasingly granular tax adjustments and modeling. At the same time, renewed tariff pressures from the United States are accelerating the need for supply chain realignment and the reinforcement of contractual protections, including tariff-related indemnities and force majeure provisions.
INSIGHT 06. Sector-Specific Developments
Occupational Safety Governance and Emerging Digital Regulation
Serious Industrial Accidents: Recent case law suggests that a CEO may avoid criminal liability where a Chief Safety Officer (CSO) with substantive authority has been duly appointed. The decisive factor is not a nominal designation, but the delegation of real authority, including control over personnel and budget.
Digital Regulation: Enforcement is set to intensify with respect to disclosure obligations for probability-based (loot box) items, alongside the introduction of labeling requirements for AI-generated content.
