Key Country Facts
Currency: Korean Won (KRW)
Time zone: UTC +9
Capital city: Seoul
Official language: Official language is Korean. Hangul is Korea’s official alphabet.
The Labor Standards Act is the main legislation on regulating the employment relationship and providing minimum employment standards. The Korean labor environment is employee-friendly with stringent employment protection laws.
Employers must provide employees with certain terms relating to wages, working hours, annual paid leave and weekly holiday in writing. The employer must provide these written terms to the employee at the time the employee enters the employment contract. A copy must be retained for at least three years after the employment contract ends. A verbal or implied agreement is enforceable if proven. Contracts do not have to be in Korean.
Employees can be employed on a permanent basis or on a fixed-term basis which is generally limited to two years.
There are 12 public holidays in Korea:
- New Year’s Day – Jan 1
- Lunar New Year – Feb 11 to 13
- Anniversary of the Independence March 1st Movement – Mar 1
- Labor Day – May 1
- Buddha’s Birthday – May 19
- Children’s Day – May 5
- Memorial Day – Jun 6
- Liberation Day – Aug 15 (Alternative holiday: Aug 16)
- Chuseok (Harvest Moon Festival) – Sep 20 to 22; a three-day consecutive holiday
- National Foundation Day – Oct 3 (Alternative holiday: Oct 4)
- Hangeul (Korean characters) Day – Oct 9 (Alternative holiday: Oct 11)
- Christmas Day – Dec 25
Companies need to provide paid leaves, at least 15 days per year.
Employee who has worked for 80% of total working days of the first year is entitled to use 11 days’ annual leave within the first year. For employee with less than 80% attendance, next year’s leave days are based on one leave day for a full working month in the previous year. The days of leave increase every two other years from 4th year up to the ceiling of 25 days.
If an employee does not use up his/her annual leave for one year, the remaining days of unused annual leave cannot roll over to the next year and will expire. However, the employer should pay wages to the employee for the unused leave.
If the employer gives a written notice to the employee requesting him/her to use up all the remaining days of leave until the end of the year, and the employee does not use the leave in spite of such request, the employer is exempted from the obligation to compensate for the unused annual leave.
Some foreign companies in Korea allow such rolling over of annual leave, which is perfectly fine because the Labor Standards Act, as the minimum standards, do not prohibit employers from applying working conditions that better than those of the law to employees.
Employees are not legally entitled to sick leave in relation to non-work related illnesses or injuries. However, quite a few companies grant sick leave to their employees as a special benefit generally up to several months of unpaid leave and/or up to several weeks of paid leave if illness or injury requires it.
Regarding work related illnesses or injuries, worker’s compensation insurance covers to provide partially paid leave and to pay for treatment as well as additional compensation for any lasting disability.
Employers must allow 90 days of maternity leave (or 120 days in the case of twins). At least 60 days (or 75 days in the case of twins) of the leave must be paid. The government pays for the remaining 30 days (or 45 days in the case of twins). At least 45 days of leave (or 60 days in the case of twins) must be taken after the birth.
Maternity paid leave is also payable for miscarriage and premature birth:
- 5 days for pregnancies lasting up to the 11th week,
- 10 days for those entering the 12th week to the 15th week of pregnancy,
- 30 days for those entering the 16th week to the 21st week of pregnancy,
- 60 days for those entering the 22nd week to the 27th week of pregnancy, and
- The full 90 days of leave for those pregnancies lasted at least 28 weeks.
Employers must grant at least ten days of paid paternity leave at the employee’s request. Paternity leave requests must be made within 90 days of childbirth.
Women with infants under the age of one are entitled to at least 30 minutes of nursing time, twice a day.
Termination is reasonably difficult and must be with just cause. Employer should give the worker a written notice of dismissal.
Generally, an employee is entitled to severance benefits described in the law for all kinds of termination.
There is no restriction or guidelines on awards of bonuses. In Korea, bonus pay (additional pay for things like overtime, and professional achievements) is not added to regular monthly pay, but rather, it is included in the severance pay an employee receives at the end of the contract.
Bonus pay is calculated by dividing the total bonus pay amount due for one year by 12 (for months in a year). That amount (one month of bonus pay) is then added to the amount of severance pay owed for one year. The total (severance pay and bonus pay) is then multiplied by the number of years the employee has worked at the company.
Korea Social Security
There are four compulsory social insurances set out in the law as detailed below:
|Social Security System||Monthly Salary Cap
|Employer Contribution||Employee Contribution|
|National Health Insurance||99,615,293||3.43%||3.43%|
|Long Term Care||99,615,293||0.39%||0.39%|
|National Pension Insurance||4,860,000||4.50%||4.50%|
|Employment Insurance||–||1.05 – 1.65%||0.8%|
|Worker’s Compensation Insurance||–||0.70 – 3.10%||0.00%|
Korea Health Insurance Law
This information does not constitute legal advice.