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Labor law
in South Korea.

SALARY PAYMENT IN South Korean won (KRW, ₩)

CONTRACT LANGUAGES Korean / English

PAYROLL TAX 16.43% – 34.94%

PAYROLL CYCLE Monthly

TIME TO HIRE 24 hours

Labor law in South Korea – Overview

The key piece of legislation relating to labor law in South Korea is the The Labor Standards Act (1997).

The Labor Standards Act sets out the minimum standards for employment relationships in South Korea, covering employee entitlements around wages, working hours, and leave. The LSA applies to all businesses ordinarily employing five or more workers, but can also apply to ‘microbusinesses’ with fewer than 5 employees depending on the financial situation of the microbusiness.

Notice period laws in South Korea

Dismissals in South Korea

South Korean employers are required to give a notice period of at least 30 days before terminating an employment agreement. Alternatively, employers can offer payment in lieu of notice. 

In some cases, notice is not required: 

  • Where an employee has been employed for under 3 months;
  • Where an employee is found to have committed a wrongful act intentionally or some other action that has a serious adverse effect on the employer’s operations;
  • In order to maintain the business due to a natural disaster or some other ‘unavoidable reason’. 

Resignations in South Korea

There is no requirement in South Korea for employees to give a minimum notice period when resigning, unless such a stipulation exists in the employment contract. Still, one month’s notice is standard when an employee resigns.

Severance laws in South Korea

Under the Employee Retirement Benefit Security Act (2005), employers are required to set up a corporate pension scheme or pay a ‘retirement benefit’ when an employment relationship comes to an end. Retirement benefits apply to voluntary retirement as well as termination of employment for cause. 

Note that all businesses established after July 2012 must set up a corporate pension scheme within the first year of operations. 

All employees who have worked for the same employer for at least 12 months are entitled to retirement benefit/severance payment. The benefit is equivalent to at least 30 days’ average wages for each year of continuous employment. 

Hiring in South Korea, Made Easy

Your business can easily hire employees in South Korea without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.

FAQs

The Labor Standards Act (1997), the Employment Insurance Act (1993), the Minimum Wage Act (1986), and the Equal Employment Opportunity and Work-Family Balance Assistance Act (2016).

Yes. There are no laws that prohibit employers from terminating the contract of an employee who is on probation. Notice is not required to be given when an employee has been employed for under 3 months.

There is no legal requirement for employees in South Korea to provide notice even after the probationary period. In South Korea, it is standard for employees to offer 1 month’s notice when resigning, but this expectation is not reasonable during the probationary period.

At a minimum, employers should submit the termination notice in writing, acknowledging the 30-day notice period. Termination notices must also include the reasons for the termination (cause) and the proposed date of termination. Keep in mind that it is the employer who has the burden of proof when establishing just cause for termination.

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