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Forums For Adjudicating Employment Disputes

Employee claims can be brought before the Labour Relations Commission (LRC) or in civil court.

Employees have 90 days to file an LRC petition, which will begin at the Regional LRC level. This stage takes approximately three (3) months. Thereafter, the losing party may appeal to the Central LRC, which may take an additional three (3) months. Should the losing party continue to appeal, they may appeal to the Administrative Court, then to the High Court, and ultimately to the Supreme Court. This entire process may take anywhere up to three (3) years. Notwithstanding, many employees bring their claims to the LRC because the LRC would adjudicate more quickly and are more employee friendly.

Employees and employers may agree to have employment disputes adjudicated through arbitration. However, such arbitration provisions would be considered highly uncommon in Korea, especially due to the efficiency of the LRC venue.

The Main Sources Of Employment Law

The main sources of employment law would be statutes, enforcement decrees, regulations, agency interpretations, and judicial interpretations. Additional restrictions on employment conditions can be created by an agreement between employers and employees, or by collective bargaining agreements between labour unions and employers. Employee handbooks would also constitute binding agreements between employers and employees.

National Law And Employees Working For Foreign Companies

The applicable law, enforcement decrees, regulations etc. would apply to all employers, regardless of whether the employer is a purely Korean company or a foreign company operating in Korea.

National Law And Employees Of National Companies Working In Another Jurisdiction

Korean employment and labour laws apply to all employees in Korea. Under the Act on Private International Law, non-national employees working in Korea would also be subject to Korean employment and labour laws so long as they have habitually worked from and provided their services from within Korea. Korean employment and labour laws typically do not apply to employees working outside of Korea, unless the employer and employee agree that it would.

Data privacy

Data privacy is primarily governed by the Personal Information Protection Act (PIPA). Under PIPA, the collection, use, and/or transfer (to third parties) of “personal information” or “sensitive information” requires the express written consent from the “data-subjects”. Personal information includes details regarding an individual, or details that can be reasonably combined with other information to identify an individual. Sensitive information includes resident registration numbers and/or medical information.

Legal Requirements As To The Form Of Agreement

The Labour Standards Act requires employers to distribute the working terms and conditions to the employees in writing. Most employers fulfil this obligation through a written employment contract. The employment contract does not need to be in Korean, but best practice indicates that a dual language version be prepared.

Mandatory Requirements
  • Trial Period
  • There is no mandatory probationary period. Employers may include a probationary period in the employment contracts; however, probationary periods longer than three (3) months may be subject to challenge.

  • Hours Of Work
  • Working hours shall, in principle, not exceed eight (8) hours per day or 40 hours per week, excluding recess hours. Any waiting hours while under the employer’s supervision are regarded as working hours. However, exceptions to these requirements exist for the protection of minors and female workers, as well as those who enter separate agreements for any extended work. The weekly work hour limit does not apply to companies with fewer than five (5) employees. However, it is recommended as a matter of best practice for all employers to follow the daily/weekly work hour limits.

    In principle, the working hours may be extended up to 12 overtime hours per week pursuant to an agreement between the employer and employee. For employers with fewer than 30 employees, employers may require employees to work an additional eight (8) overtime hours per week pursuant to an agreement with the employee representative until December 31, 2022.

  • Special Rules For Part-time Work
  • N/A

  • Earnings
  • The minimum wage (2021) for Korea is KRW 8,720 per hour. The minimum wage applies to all employees in Korea.

  • Holidays/Rest Periods
  • Employers must provide a minimum of 30 minutes for every four (4) hours of work, resulting in a typical one (1) hour recess for every standard eight (8) hour workday.

    Statutory holidays include:

      1. Labour Day (May 1) of each year shall be recognised as a statutory holiday;
      2. employees shall be entitled to one (1) day of paid holiday per completed contractual work week. As a general proposition, many employers designate Sundays as the weekly paid holiday; and
      3. in addition to statutory holiday and weekly paid holiday, the Labour Standards Act recognises the holidays which are listed under the Ordinance Concerning the Holidays of Government and Public Officers (“Ordinance Holidays”) as mandatory holidays. The Ordinance Holidays are not mandatory for employers with fewer than five (5) employees. The Ordinance Holidays include, but are not limited to, New Year’s Day, Lunar New Year’s (based on the Lunar calendar), Independence Movement Day (March 1), Children’s Day (May 5), Chuseok Holidays (based on the Lunar calendar) etc. The dates of the Ordinance Holidays may vary annually as some are based on the lunar calendar. As such, Ordinance Holidays (or any special holidays for a particular year), must therefore be re-examined in each year.

  • Minimum/Maximum Age
  • Minors who are younger than 15 years old may not be employed. The statutory minimum retirement age is 60. Korean law prohibits discrimination based on age.

  • Illness/Disability
  • Korean law prohibits discrimination against individuals with disabilities. There are no standards applicable to statutory sick leaves under the Labour Standards Act, and thus, the employer may determine how it wishes to handle employee sick leave under the rules of employment or employment contract. In the case of occupational injuries, employers may be required to provide payment for medical costs in accordance with the Labour Standards Act, depending on the nature or extent of the injuries.

  • Location Of Work/Mobility
  • There are no mandatory requirements relating to an employee’s location of work/mobility.

  • Pension Plans
  • Pursuant to the Guarantee of Worker’s Retirement Benefits Act, all employers are required to pay severance (or pension) upon termination of an employment relationship (except for an employee who has worked less than one (1) year or who works less than 15 hours per week) and to establish one of the following three severance related systems for that purpose: (i) a severance payment system, (ii) a defined benefits pension plan, or (iii) a defined contribution pension plan. Under the severance payment system, the employer sets aside a reserve for payment of severance pay to its employees upon termination of the employment relationships. The minimum statutory severance payment amount is: Statutory Severance = (Average-Wage) x (Years of Service). Here, “average-wage” refers to the amount calculated by dividing (1) the total amount of wages paid to the employee during the three calendar months prior to the date on which the event necessitating such calculation occurred, by (2) the total number of calendar days in those three calendar months.

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)
  • Korean law provides various entitlements related to parental rights. These include maternity leave (90 - 120 days, depending on whether the employee has had a single child or multiple births) and paternity leave (10 days).

    When an employee who has worked for six (6) months or longer and has a child (including an adopted child) who is eight (8) years old or younger (or in second grade of elementary school or lower) applies for leave to take care of the child, the employer shall grant the employee unpaid childcare leave of up to one (1) year. Childcare leave is unpaid. In cases where an eligible employee applies for a work hour reduction instead of the full days of childcare leave, the employer shall allow the employee to work shorter workdays to the extent permitted by law.

    Upon the request of the employee concerned, an employer must provide a temporary leave of absence to an employee for purposes of taking care of his/her parents, spouse and children or his/her spouse’s parents due to illness, an accident or aging etc. The employees are entitled to use a total of 90 days of such family care leave per year, of which the employee can use up to 10 days as single days-off. Family care leave is unpaid.

    Employers shall provide fertility treatment leave of three (3) days per year for employees who wish to receive a medical fertility treatment, such as artificial insemination and in vitro fertilisation. The first day of the three (3) days of fertility treatment leave shall be paid leave.

    For female employees with a child younger than one (1) year’s old, the employer (upon the employee’s request) shall grant two (2), 30-minute periods (paid) per day for childcare purposes.

  • Compulsory Terms
  • Employment agreements must include wages, payment date, method of payment, contractual work hours, work location, holidays, other wage items (e.g. allowances and bonuses etc.) annual paid leave, severance pay and insurance etc.

  • Non-Compulsory Terms
  • The parties are free to agree to other non-compulsory provisions in an employment agreement.

Types Of Agreement

Permanent (indefinite-term) employment is the principal form of employment in Korea. However, as termination is highly difficult under Korean law (i.e. strict just-cause is required for termination), employers may consider offering permanent employment to personnel whom they may need/want to keep for a longer period to retain key talent.

Fixed-term employment is more suitable when an employer has a limited need for an employee, wishes to assess an employee’s performance before converting the employee to a permanent position, or if the employer wishes to mitigate employer obligations and liabilities while contemplating further business expansion. The key aspects of fixed-term employment are as follows:

    1. employers with five (5) or more employees may engage a fixed-term employee for up to two (2) years, after which the fixed-term employee would become a permanent employee as a matter of law (the “Two-Year Threshold”);
    2. employers with fewer than five (5) employees are exempt from the Two-Year Threshold.
    3. employers with fewer than five (5) employees are exempt from the Two-Year Threshold.
    4. employees who possess a Ph.D. or a professional license that is relied on within their industry/job (e.g. doctors and lawyers) are exempt from the Two-Year Threshold; and
    5. employees who are engaged in high-level management positions or other positions that fall within Category 2 of the Korean Standard Occupation Categories with an annual salary greater or equal to KRW 66,000,000 are exempt from the Two-Year Threshold.

Employees can also be "dispatched workers" or "interns". "Dispatched workers" may be hired through a third-party dispatching agency to perform ancillary jobs that are within the permitted list of 32 job categories prescribed in the Act on the Protection of Dispatch Workers and the corresponding Presidential Decree.

While the term "intern" is not a legally recognised concept under Korean law, it is used to refer to someone who undertakes a temporary role in an organisation (which may last anything from a few weeks to months, although engagements longer than six (6) months is not recommended for interns due to the risk of employee-status) with an emphasis on on-the-job training and educational purposes, as opposed to being an evaluation period or procedural step for employment with the employer.


Typically, issues relating to confidentiality and trade secret protection are addressed in written employment agreements or employee policies. In the absence of such agreements, employer’s trade secret information may be afforded protection under the Unfair Competition Prevention and Trade Secret Protection Act, Civil Act, and/or the Monopoly Regulation and Fair-Trade Act.

Ownership of Inventions/Other Intellectual Property (IP) Rights

In the absence of a written agreement between the parties, ownership of IP rights is determined by the applicable law.

Pre-Employment Considerations

There are no mandatory pre-employment considerations.

Hiring Non-Nationals

Employers may hire only persons who may legally work in Korea and aliens authorised to work in the Korea.

Hiring Specified Categories Of Individuals

Under the Disability Employment Promotion Act (DEPA), businesses with 50 or more regular employees are required to maintain a ratio of disabled workers in the workforce in accordance with the statutory quota. The DEPA also requires employers with 100 or more regular employees to pay a disability employment surcharge if the statutory quota (i.e. 3.1%) is not satisfied. When an employer who is obligated to pay a disability employment surcharge subcontracts a company that provides a vocational rehabilitation facility for the disabled etc., the employer may be exempt from or subject to a reduced disability employment surcharge because the disabled workers of the subcontracted company may be counted towards the statutory hiring quota for the employer.

Outsourcing And/Or Sub-Contracting/Temporary Agency Work

Korean law strictly regulates the engagement of dispatch workers as the law hopes to promote the engagement of those employees as permanent employees. The key aspects of dispatched worker arrangements are as follows:

    1. the third-party vendor must have a permit to operate as a supplier of dispatched workers by the Ministry of Employment and Labour;
    2. the serviced company can supervise/control the dispatched workers;
    3. a dispatch worker can be engaged for only up to two (2) years;
    4. the use of dispatch workers is possible for only 32 job categories; and
    5. dispatch workers may not be discriminated against regarding working terms/conditions with regular employees of the serviced company who perform the same or similar work.

There is no time limit on the use of subcontracted workers. However, in case the serviced company interferes with the vendor’s supervision and control of its employees, which is deemed to be illegal, the employees of the third-party vendor may make a claim for permanent employment with the serviced company, regardless of the time they have been providing services for the serviced company. Unlike dispatch workers, there are no job category restrictions for the engagement of subcontracted workers. Subcontracted workers may not be directly supervised or controlled by the serviced company. Instead, since subcontracted workers are employees of the independent, third-party vendors, the third-party vendors (i.e. the subcontractors) would supervise and control the subcontracted workers.

Changes To The Contract

The employer cannot unilaterally change the terms of employment. Changes to the employment agreement is permitted via consent from the employee. Changes to the Rules of Employment (work rules) would require consultation with the majority of employees (for neutral or favourable changes) or consent from the majority of the employees (for disadvantages changes). In the case of a majority union, the employer would consult with or obtain consent from the majority union.

Change In Ownership Of The Business

There is no statutory notice period or procedure to implement a change in ownership of the business.

Social Security Contributions

The four (4) national insurances are: National Pension, National Health Insurance, Employment Insurance, and Industrial Accident Compensation Insurance. Among these insurances, the employer and employee each contribute half of the premiums for National Pension, National Health Insurance, and Employment Insurance. The contribution for Industrial Accident Compensation Insurance is borne solely by the employer.

Accidents At Work

Employers must comply with all safety and health obligations and are required to subsidise annual medical check-ups and may be required to compensate for occupational injuries in accordance with the Labour Standards Act. Employers must also report industrial accidents and keep a record of all industrial accidents at the workplace.

Employees may seek benefits under the Industrial Accident Compensation Insurance by filing a claim to the Korea Workers’ Compensation and Welfare Service (COMWEL). If so, employers are required to cooperate with COMWEL’s investigation to determine whether the employee would be entitled to benefits under the national insurance.

To provide greater protection for employees under the newly enacted Major Accident Punishment Act (MAPA) – effective on 27 January 2022 – an applicable accident is recognised as a “major industrial accident” if it involves: (a) the death of at least one (1) person, or (b) causes injury to at least two (2) persons or more requiring at least six (6) months of recovery; or (c) injures at least three (3) persons or more experiencing the same type of work-related illness (to be enumerated in the forthcoming Presidential Decree) attributable to the same cause within a one (1) year period.

Employers are required to: (i) establish safety/health management protocol (e.g. personnel, budget etc.) to prevent accidents and enforce the protocols, (ii) establish accident response plans in cases of an accident and execute the plans to prevent a further accident; (iii) take measures in accordance with orders issued by administrative agencies and municipalities; and (iv) take measures required in accordance with the statutory requirements relating to occupational safety and health. The exact scope of the above requirements is expected to be elaborated in the forthcoming Presidential Decree.

Discipline And Grievance

Any disciplinary measure, including termination, requires the employer to follow the disciplinary procedure, if any, that is stipulated in the applicable rules of employment or employee handbook. If the employment agreement or rules of employment/employee handbook neglects to outline a procedure, the employer is not required to follow any particular procedure provided that, as a matter of practice, the employer follows reasonable due process including providing employees with advance notice (typically at least three (3) days) of a disciplinary action committee hearing and an opportunity to speak at the hearing.

Harassment/Discrimination/Equal pay

Employers shall not discriminate based on gender, religion, social status, nationality, creed, marital status, position within the individual’s family, pregnancy, childbirth, employment status (fixed-term, part-time, permanent, dispatched, subcontracted etc.), colour, age or disability.

Workplace harassment is prohibited. Workplace sexual harassment is prohibited. In the case of any harassment (general or sexual), employers must investigate the matter without delay, take protective measures for the alleged victim(s), take appropriate disciplinary action against the harasser(s), prevent secondary harm, and avoid engaging in any retaliatory action or disadvantageous treatment of the victim(s) or witnesses.

Compulsory Training Obligations

Employers must conduct annual workplace harassment prevention training, workplace sexual harassment prevention training, industrial accident prevention training, and workplace disability awareness training in accordance with the applicable laws.

Offsetting Earnings

Employees must be paid their salary at least monthly but can be paid hourly or weekly subject to the terms of an employment contract. Wages must be paid in full – unilateral deductions from wages are prohibited except for limited circumstances, such as when permitted by the applicable law (e.g. taxes or social insurance contributions etc.) or for oversight in wage calculations (e.g. overpaid annual leave pay).

Payments For Maternity And Disability Leave

Of the total 90 - 120 days of maternity leave, depending on the circumstances, the first 60 days (or 75 days, in the latter case) must be paid leave days, less any amount already paid by the government pursuant to Article 18 of the Equal Employment and Work-Family Reconciliation Act.

There is no statutory sick leave in Korea.

Compulsory Insurance

The four national insurances are: National Pension, National Health Insurance, Employment Insurance, and Industrial Accident Compensation Insurance. Among these insurances, the employer and employee each contribute half of the premiums for National Pension, National Health Insurance, and Employment Insurance. The contribution for Industrial Accident Compensation Insurance is borne solely by the employer.

Absence For Military Or Public Service Duties

If a male employee is called up for army reserve training, his employer shall grant him special leave for the duration of the training period. This special leave shall be paid leave.

Works Councils or Trade Unions

A Labour Management Council (LMC), which is required for all employers with 30+ employees, must meet quarterly and serve as a venue through which select members of the company’s management and elected members from the employees (from the labour union in the case of a majority union) can discuss important issues, including employee grievances or concerns related to employment, as well as share any upcoming company initiatives that might have a material impact in Korea. Per the Act on the Promotion of Workers’ Participation and Cooperation, the LMC shall consist of representatives from the management and the employees. The minimum number of representatives from the management shall be three (3) members, while the minimum number of representatives from the employees shall also be three (3) members. Please note that the number of representatives from the management and the employees, respectively, must be the same.

Employees’ Right To Strike

Korea’s Constitution provides for three (3) constitutional labour rights: The right to organise, the right to negotiate, and the right to industrial action. The primary legislation pertaining to labour union rights (as well as an employer’s obligations and rights) is the Trade Union and Labour Relations Adjustment Act. Unionised employees in Korea may engage in various forms of industrial action including strikes, occupation, picketing, boycotts, slowdowns, and work-to-rule.

Employees On Strike

Employers may not engage in unfair labour practice (which would be a criminal offense) including disadvantageous or unfavourable treatment for joining or engaging in union activities or collective action, refusal to engage in collective bargaining, and/or domination, interference and financial support of the union.

Employers’ Responsibility For Actions Of Their Employees

Generally, employers are vicariously liable for the actions of its employees, so long as the employees’ actions occurred within reasonable scope of the employment.

Procedures For Terminating the Agreement

Korea is not an at-will jurisdiction. Instead, under the Labour Standards Act, an employee may be terminated only for “just cause”. While there is no clear definition of “just cause”, the courts have described it as “a cause that is attributable to the employee which, under the socially accepted principles, makes the continuation of the employment impossible”. In practice, the labour authorities or the courts prefer to also see a progressive disciplinary process leading up to termination. Categories where “just cause” may be found would depend on the totality of the circumstances and may include, but are not limited to (i) serious and repeated violation of an internal employment regulation, (ii) conviction of a serious crime; (iii) falsification of one’s resume and detrimental reliance by the company, (iv) disclosure of trade secrets, and (vi) sexual harassment etc.

An employer must generally give the employee at least 30 days’ prior written notice (including the reasons for the termination and the effective termination date), or in lieu thereof, pay compensation of at least 30 days’ ordinary wages, regardless of the cause of termination. However, if the employee has worked for less than three (3) months, the advance notice (or payment in lieu thereof) is not required; only a written termination letter would be required.

Instant Dismissal

In principle, advance written notice of termination is required. However, advance notice would not be required (1) if the employee has worked for less than three (3) months or (2) the employee engaged in acts that the Presidential Decree of the Labour Standards Act provides as exceptions to the prior notice or pay in lieu thereof requirement, such as when an employee commits a serious intentional act from under generally accepted social norms that results in considerable and irreparable damages to the employer. Although the advance notice would not be required, a written termination letter must still be provided.

Employee's Resignation

An employee can resign at any time for any or no reason with one months’ notice to the employer, unless otherwise agreed by the parties.

Termination On Notice

Please refer to sections “Procedures for terminating the agreement” and “Instant dismissal”.

Termination By Reason Of The Employee's Age

Provided that the employer’s rules or policies stipulate a retirement age, the employer can terminate an employee for reaching the retirement age without prior notice. Absent a retirement age, one could reasonably argue that there are no grounds for termination based on age.

Automatic Termination In Cases Of Force Majeure

In principle, in the case of a force majeure that prevents the employer from continuing its business, force majeure would constitute just-cause for termination.

Collective Dismissals

A layoff is also referred to as a termination for “managerial reasons” (i.e. reasons attributable to the employer) under the Labour Standards Act. The courts review the layoff requirements and the satisfaction thereof with great scrutiny, and as a matter of practice, it is considerably more difficult to satisfy the layoff requirements than the just-cause requirement of individual termination. The layoff requirements are:

    1. an imminent managerial necessity must exist;
    2. the employer must make reasonable efforts to avoid the layoff;
    3. the employer must establish reasonable and fair criteria for selecting those to be laid off;
    4. the employer must consult with the employee representative or labour union (if majority union exists) in good faith on matters related to the layoff (e.g. efforts to avoid layoff, selection criteria etc.);
    5. the employer must provide an advance notice of at least 50 days before the layoff date to the employee representative or labour union (if majority union exists), during which time the employer shall discuss matters stipulated in requirement (4) above; and
    6. the employer must submit a report to the ministry of employment and labour if, in principle, 10% or more of the workforce is being laid off.

Termination By Parties’ Agreement

The mutual separation approach is always available. Hence, an employer may offer an ex-gratia amount to the employees as payment in exchange for their voluntary resignation. Please note that an employer is not legally obligated to offer any ex-gratia amount, although practically, a payment offer would better incentivise the employees to resign. Also, any ex-gratia amount would be separate from and in addition to any statutory severance that is payable to the employees. There is no statutory formula for ex-gratia amounts. Instead, ex-gratia payments are subject to negotiations.

Directors Or Other Senior Officers

Registered directors are not “employees” for purposes of the Labour Standards Act. Therefore, in principle, under the Korean Commercial Code, a registered director may be removed from office at any time by a resolution adopted at a general shareholders' meeting. A removed director could challenge a removal, however, alleging that his/her removal is made without “justifiable grounds” before the expiration of his/her term of office. If recognised, the director could receive damages (i.e. salary for the remaining term in office). The scope of justifiable reason(s) for removal is much broader than the “just cause” requirement for employees and even recognises unsatisfactory or sub-par performance as sufficient justifiable reason for termination.

Senior officers who are not registered directors would be considered as “employees” under the Labour Standards Act and subject to the just-cause termination requirement provided that there are five (5) or more individuals under employ.

Special Rules For Categories Of Employee

No special termination standards for certain employee categories.

Specific Rules For Companies in Financial Difficulties

Employers facing serious financial difficulties may terminate employees as part of a larger layoff because serious financial difficulties could satisfy the “imminent business necessity” requirement (i.e. one of the key requirements for a layoff under Korean law). Please see Section “Collective dismissals” for more information on layoffs.

Restricting Future Activities

Post-termination restrictive covenants are enforceable in Korea. When determining the enforceability of such covenants, the Korean courts will, in principle, decide whether doing so would be reasonable, considering the totality of the circumstances. In this regard, the Korean courts will strike a balance between the disadvantages to the employee (i.e. the ability to make a living) and the former employer's protection.

A non-exhaustive list of the general factors that Korean courts will/may consider includes the following (in no particular order):

    1. existence of a legitimate business interest of the employer (e.g. the existence of information of value to the competitor or trade secret);
    2. employee’s position and scope of responsibilities in his/her previous employment;
    3. reasonableness in durational and geographical scope considering the employee’s roles and responsibilities with the former employer;
    4. existence of any compensation received in consideration for signing the non-compete provision;
    5. circumstances surrounding the employee’s departure (e.g. whether terminated by the company or voluntary resignation by the employee);
    6. whether the employee will be able to utilise any confidential information or trade secret(s) in the new position;
    7. whether the employee’s knowledge is proprietary to the former employer or is a reasonable result of accumulated experience and professional knowledge; and
    8. public policy considerations.

One single factor is not determinative, and all must be considered to access the totality of the circumstances. And while consideration is listed as one of the many factors, recent case law indicates that consideration is becoming established as a near requirement in practice.

Whistleblower Laws

Whistle-blowers are protected from employer retaliation by various statutes, including the Labour Standards Act, Equal Employment Opportunities and Work-Family Balance Reconciliation Act, Trade Union and Labour Relations Adjustment Act and the Industrial Safety and Health Act. These statutes encourage self-reporting of corruption and contain anti-retaliation provisions.

Special Rules For Garden Leave

There are no special rules for garden leave.

Irrespective of the grounds for the termination (e.g. resignation, mutual separation, termination etc.), all employees who worked for one (1) year or longer is entitled to statutory severance – whether it be under the statutory severance scheme or a duly adopted defined benefits or defined contribution pension plan. There is no cap to the severance payment, and it must be paid within 14 days of the effective termination date.

Severance Payments

Irrespective of the grounds for the termination (e.g. resignation, mutual separation, termination etc.), all employees who worked for one (1) year or longer is entitled to statutory severance – whether it be under the statutory severance scheme or a duly adopted defined benefits or defined contribution pension plan. There is no cap to the severance payment, and it must be paid within 14 days of the effective termination date.

Special Tax Provisions And Severance Payments

Employee severance income will be taxed a much lower rate without a limit to the severance amount. However, for executives (director-level), a limit exists to which their severance amount would benefit from an applicable lower rate.

Allowances Payable To Employees After Termination

At the time of termination, the following payments would be required within 14 days of the effective termination date:

    1. remaining, unpaid salary as of the effective termination date;
    2. encashment for unused annual leave as of the effective termination date;
    3. statutory severance; and
    4. payments pursuant to any contractual obligations including cost reimbursements, wages, and allowances.

Time Limits For Claims Following Termination

If the employee files a petition to the LRC for wrongful termination, the employee must do so within 90 days of the effective termination date. But if the employee files a claim to the civil courts, there is no time limit for filing the wrongful termination claim.

For unpaid wages (e.g. salary, allowances, severance etc.), the applicable statute of limitations for such claims would generally be three (3) years, although depending on the claim, the applicable statute of limitations could be longer.

Specific Matters Which Are Important Or Unique To This Jurisdiction

Overtime payments: An employer is, in principle, required to pay an additional compensation of at least 50% of ordinary wage for each hour of overtime work (i.e. any work performed in excess of eight (8) hours per day or 40 hours per week), night-time work (i.e. any work performed between 10 pm to 6 am), and/or holiday work (i.e. Sundays and public holidays). If there is an overlap between overtime, night-time, and/or holiday work, the applicable rates accumulate. In case of holiday work, the employer would be obligated to provide an additional compensation of at least 50% holiday allowance up to the first eight (8) hours of holiday work, after which the employer would be obligated to provide 100% holiday work allowance for every hour beyond the first eight (8) hours. There are no categorical exemptions for overtime payment under Korean law. Exemption from overtime is possible only for limited individuals such as those who (1) manage and supervise or (2) handle confidential information within the company.

Compensation for unused annual leave: Unused annual leave must, in principle, be compensated at the end of each year. However, an employer is exempt from the liability to compensate the employee for the unused annual leave if the employer had actively encouraged the employee to use it.

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Sanghoon Lee
Lee & Ko
Korea, Republic of

William Kim
Lee & Ko
Korea, Republic of


© 2021, Lee & Ko. All rights reserved by Lee & Ko as author and the owner of the copyright in this chapter. Lee & Ko has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: June 2021