COUNTRY

Written Agreements

Under South Korea's Labor Standards Act, all employers in Korea must conclude a written agreement with their employees, which must at a minimum provide information on the following:

• Wages
• Contractual working hours
• Holidays
• Weekly paid days off
• Paid annual leave

The employer must also provide a written statement to the employee if any of the above terms of the employment contract are changed.

• An employer must issue a written statement to an employee specifying the components of the wage, the calculation method, and the payment modality. Any agreement that does not satisfy the standards prescribed by the Labor Standards Act and other binding laws on working conditions will be void to the extent that it fails to meet those legal requirements.

The Supreme Court of South Korea maintains that non-compete and non-solicitation clauses in employment contracts are enforceable if they are reasonable. Even if a non-competition agreement exists between an employer and an employee, if such agreement excessively restricts the employee's freedom of job choice and right to work or excessively restricts free competition, it must be considered invalid.

Oral Agreements

South Korea's Labor Standards Act states that oral contracts cannot be used for part-time employees. Oral contracts are not prohibited for use with full-time employees. However, certain terms related to wages, contractual work hours, weekly time off, and paid annual leave must be provided to the employee in writing when the employment contract is concluded.

Implied Agreements

South Korea's Labor Standards Act does not contain provisions on the use of implied employment contracts.

Per the amended Labor Standards Act of South Korea, standard work hours are 40 hours per week or 8 hours per day. An employer can extend work hours in a particular week or day according to the employee's contract. However, the average work hours per week during a specific period (of not more than 2 weeks) must not exceed 40 hours, and work hours in any particular week shall not exceed 52 hours or 12 hours a day.

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Under South Korea's labor law, full-time salaried employees are entitled to 15 days of paid annual leave after 1 year of service with an organization. During their first year of service, employees earn 1 day of leave for every fully worked month (for a total of 11 days of leave). Employees must have at least 80% attendance during any year of service to qualify for paid leave.

Employees are entitled to an additional day of leave for every 2 years of consecutive service, not including their first year. However, the statutory leave days earned annually are capped at 25 days.

Employee leave continues to accrue when the employee is away on childcare leave. Paid annual leave shall be forfeited if not used within one year. However, this shall not apply in cases where the employee has been prevented from using the employer's leave.

An employer may conclude an agreement with the employee requiring the employee to take paid leave on particular days.

The labor law of South Korea does not require employers to provide leave to employees for non-work-related illnesses or injuries.

Under the Labor Standards Act, employers are required to provide paid leave for work-related illnesses or injuries. An employer shall provide necessary medical treatment at their expense or bear corresponding expenses for an employee who suffers from an occupational injury or disease. An employer shall pay an employee under medical treatment for occupational injury or disease compensation for suspension of work equivalent to 60% of his or her average wages during the period of his or her medical treatment.

If an employee suffers from an occupational injury or disease due to their own gross negligence and the employer obtains admission for said negligence from the Labor Relations Commission concerned, the employer shall not be required to provide compensation for suspension of work or disability.

An employer shall not dismiss an employee during a period of suspension of work for medical treatment of an occupational injury or disease and within 30 days immediately thereafter.

Per South Korea's Labor Standards Act, employers must grant pregnant female employees a total of 90 days of paid maternity leave (120 days in case of a pregnancy with more than one child), which can be used before or after childbirth. Compensation is funded by the employer for 60 days, while the remaining 30 (or 45 days in case of a pregnancy with more than one child) days are paid from the Employment Insurance Fund, a state-run fund established by the Ministry of Employment and Labor.

The 90 days of statutory leave include holidays and Sundays. In addition, at least 45 days must be used after childbirth (but where more than 45 days were spent before birth, an employer must allow 45 days of maternity leave after childbirth). Any period over the statutorily prescribed 90 days need not be considered paid leave. Although certain limitations exist, maternity leave must be allowed for premature births, miscarriages, and stillbirths.

Under the Equal Employment Opportunity and Work-Family Balance Assistance Act, up to 1 year of unpaid leave is provided a parent with a child up to age 8.

Beginning February 23, 2025, fathers are entitled to 20 days of paid paternity leave, which must be requested within 120 days of their child's birth. Employees may split paternity leave into 3 different segments.

Employees are entitled to 1 year of childcare leave to raise their biological or adopted children who are 8 years old or younger or in second grade or lower. Employees may also request reduced working hours for a period of childcare to raise their children who are 12 and under or in the sixth grade and under. The period of reduced working hours can last for up to 1 year.

Employers are prohibited from taking any adverse action against employees on paternity leave.

Minimum Wage

Effective January 1, 2025, the minimum wage is KRW 10,030 won per hour.

Apprentices who have been in apprenticeship for less than 3 months are excluded from the minimum wage.

The Labor Standards Act of South Korea requires employers to pay wages to their employees at least once a month on a fixed day. This does not apply to extraordinary wages, allowances, or other similar payments.

Overtime, Holiday & Vacation Pay

South Korea's labor law defines regular working hours as 40 hours per week and 8 hours per day. Overtime is work beyond 8 hours a day or 40 hours a week.

Overtime is paid at 150% of normal hourly wages, as is work completed on a holiday (up to 8 hours). Employees performing overtime work (more than 8 hours) on a holiday are entitled to 200% of their normal hourly wages.

Employees are paid their regular wages while on annual leave.

Notice Period

According to South Korea's labor law, when an employer intends to dismiss an employee (including dismissal for business reasons unrelated to the employee's conduct), the employer must give the employee a notice of dismissal of at least 30 days. If the employer fails to give such advance notice, the employer must pay that employee their ordinary wages for no less than 30 days. The notice requirement does not apply where a natural disaster, calamity, or other unavoidable circumstance prevents the continuance of the business, where the employee has caused a considerable hindrance to the business, or where the employee has intentionally inflicted damage to the employer's property.

Employers are not required to provide notice to the following employees:

• An employee employed daily, who has been employed for less than 3 consecutive months
• An employee who has been employed for a fixed period not exceeding 2 months
• An employee who has been employed for less than 6 months as a monthly paid employee
• An employee who has been employed for any seasonal work for a fixed period not exceeding 6 months
• An employee on a probationary period

Severance Benefits

Per South Korea's labor law, a full-time employee is entitled to receive severance pay equal to at least 1 month's average wages for each year of continuous employment if they have worked for at least 1 year. During the qualifying year, the employee must have worked for more than 15 hours per week or more than 60 hours per month.

Severance pay is to be paid within 2 weeks of termination unless otherwise agreed. Additionally, it must be paid regardless of the reason for termination. The employee's "average wages" includes all wages paid by the employer to the employee for the 3 months before the date of departure divided by the total number of days during the same period.

Pension

All employers must enroll employees (including a company's representative director) in the National Pension Scheme. Foreigners aged between 18 and 60 residing in Korea are also subject to the compulsory coverage of the National Pension Scheme. The retirement age is 62, gradually increasing to 65 by 2033. However, employees aged 60 years or older and casual or temporary employees, as defined under the relevant laws, are exempt from mandatory enrollment.

Employees are eligible to receive a full retirement pension if they have paid contributions for at least 20 years. The old-age pension comprises a Basic Pension Amount (BPA) and an Additional Pension Amount (APA) or Dependent Supplement. Employees who have reached retirement age but have paid less than 10 years of contributions are eligible to receive a lump sum old-age grant in their total contributions.

Employees and employers are liable to pay contributions to the National Pension Scheme. Employers and employees equally share the cost burden of pension contributions, which total 9% of monthly employment income. This means employers and employees must contribute 4.5% of monthly employment income.

For the application period of July 2024 to June 2025, the income ceiling for insurance contributions is KRW 6,170,000 (South Korean won), and the minimum monthly income used to calculate contributions is KRW 390,000.

Dependents/Survivors Benefits

Per South Korea's labor law, the survivor pension is available to an insured's widow, a widower if the widower is aged 60 or older (or a widower of any age with a first-or second-degree disability), parents and grandparents (including the spouse's parents or grandparents) aged 60 or older (or of any age with a first-or-second-degree disability), and children and grandchildren younger than age 25 (or of any age with a first-or second-degree disability).

The survivor's pension is paid upon the death of an insured person (the deceased must have paid 66.7% of scheduled contributions on time, except when the unpaid coverage period is less than six months), an old-age pensioner, or a disability pensioner with a first-or second-degree disability.

If the deceased had contributed for at least 20 years, the pension is 60% of the deceased's basic monthly pension amount (BPA); if they had ten to 19 years of contributions, the pension is 50%; if they have less than ten years of contributions, the pension is 40%.

The BPA is 1.29 (decreasing by 0.015 a year until reaching 1.2 in 2028) multiplied by the sum of the average indexed national monthly wage in the three years immediately preceding the year in which the pension is first paid and the insured's average monthly wage over the insured's total contribution period. An increment is paid for years of coverage exceeding 20 years.

Invalidity Benefits

Per South Korea's labor law, a disability pension is paid (according to the degree of disability) to individuals with a disability occurring after the treatment of diseases or injuries incurred during the insured period. Annuities are paid to those with first, second, and third-degree disabilities, and lump-sum benefits are paid to those with fourth-degree disabilities.

Disability pension is calculated according to the degree of disability and the insured's monthly Basic Pension Amount (BPA). For a first-degree disability, 100% of the insured's BPA is paid, whereas 80% is paid for a second-degree disability, and 60% is paid for a third-degree disability.

The current BPA is 1.29 (though this is decreasing by 0.015 a year until it will reach 1.2 in 2028) times the sum of the average indexed national monthly wage during the three years immediately prior to the year of the first pension payment and the insured's average monthly wage over the entirety of the contribution period. An increment is paid for coverage years exceeding 20 years.