Hiring in South Korea

South Korea's employment framework centers on the Labor Standards Act (LSA), which applies to all businesses with 5 or more employees. The LSA sets baseline protections for wages, working hours, leave, and dismissal. For workplaces with fewer than 5 employees, only some provisions apply, including rules on wage payment and minimum wage but not the full suite of termination protections. Separate laws govern specific areas: the National Pension Act, National Health Insurance Act, Employment Insurance Act, and Industrial Accident Compensation Insurance Act each create mandatory contribution requirements that employers must follow.

Termination in South Korea requires both advance notice and substantive justification. Employers must provide at least 30 days of advance notice or pay 30 days of ordinary wages in lieu of notice. For companies with 5 or more employees, the LSA requires just cause (justifiable reason) for any dismissal, and the burden of proof falls on the employer. If a fired employee challenges the termination through the Labor Relations Commission and wins, the employer must reinstate them with back pay. Mass layoffs involving 10 or more workers at companies with 99 or fewer employees (or 10%% or more of the workforce at companies with 100+ employees) trigger additional procedural requirements, including 50 days of advance notice to the Ministry of Employment and Labor and consultation with employee representatives.

Severance pay is mandatory for all employees who have worked 1 year or more at any company, regardless of size. The statutory minimum is 30 days of average wages per year of continuous service. Employers can set up a retirement pension system (defined benefit or defined contribution) as an alternative, but the payout must equal or exceed the statutory severance amount. Employees receive severance as a lump sum upon separation, and it applies to all types of separation, including voluntary resignation, not only dismissal.

Annual paid leave starts at 15 days for employees with 1 year of service and at least 80%% attendance. After the first year, employees earn 1 additional day for every 2 years of service, up to a maximum of 25 days. Workers in their first year earn 1 day of leave per month worked, up to 11 days. South Korea observes 15 or more public holidays per year, including Lunar New Year (3 days), Chuseok (3 days), Liberation Day, and National Foundation Day. Since 2022, companies with 5 or more employees must provide paid time off for all public holidays, a requirement that previously applied only to larger firms.

Payroll contributions in South Korea are split between employer and employee. National Pension runs at 9%% of monthly wages, split evenly (4.5%% each). National Health Insurance is approximately 7.09%% of monthly wages, also split 50/50 (about 3.545%% each), with an additional Long-Term Care Insurance surcharge of 12.81%% applied on top of the health insurance premium. Employment Insurance contributions total between 1.8%% and 2.55%% of wages depending on company size, with employees paying 0.9%% and employers covering the rest. Industrial Accident Compensation Insurance is fully employer-funded, with rates ranging from 0.7%% to 18.6%% depending on industry risk classification, averaging around 1.5%% across all industries.

The standard workweek in South Korea is 40 hours, and total weekly hours including overtime are capped at 52 (40 regular plus 12 overtime). Overtime pay is 150%% of the ordinary hourly wage. Night work (10 PM to 6 AM) and holiday work also carry a 50%% premium, and these premiums stack. Maternity leave is 90 days (120 days for multiple births), with the first 60 days at full employer-paid wages and the remaining 30 days covered by employment insurance up to a monthly cap. Both mothers and fathers can take up to 1 year of childcare leave per child under age 8, paid through employment insurance at a percentage of ordinary wages up to a monthly ceiling.