The Labour Standards Act (LSA), as well as the other relevant laws, including the Minimum Wage Act, regulates employment-related matters in Korea.
Work hours
Under the relevant labour laws and regulations, statutory working hours are 8 hours per day and 40 hours per week, excluding break times. In this regard, overtime of up to 12 hours per week is permitted at present, provided that an employer pays an overtime premium. That said, this rule does not apply to employees in management or supervisory positions or those who handle confidential information.
Leave entitlement
An employee who has worked for an employer for a full year is entitled to 15 days of paid annual leave at the end of the service year. Before an employee reaches one one-year anniversary (i.e., one year of service), he or she is entitled to one day of paid leave per one-month service.
Subsequently, an employee can get an additional 1 day of paid annual leave every two years up to 25 days.
Pregnant female employees are entitled to 90 days of paid maternity leave, provided that they must use at least 45 days out of the 90 days after giving birth. On the other hand, male spouses are entitled to 10 days of paid paternity leave.
If an employee has a child aged 8 years old or younger (or elementary school 2nd grade or lower ), the employee is entitled to childcare leave up to one year in 2023.
Four national social insurance
There are four national social insurances in Korea, which are national pension, national health insurance, employment insurance and worker's compensation insurance. Except for the industrial accidental compensation insurance, both the employer and employee share the social insurance contributions.
An employer has to bear the administrative burden in dealing with the three insurance authorities – National Health Insurance Service, National Pension Service, and Worker’s Compensation & Welfare Service (which administers both employment insurance and worker’s compensation). As such, an employer is required to report new employees and termination of employment as well as pay increases to each three authorities.
Severance pay
An employer must pay statutory severance to an employee who has serviced the employer for at least one year regardless of the reason for leaving under the Guarantee of Woker's Retirement Benefit Act.
The amount is equivalent to one month's worth of pay each year. In this regard, the payment is determined as average daily salary x 30 (days) x (total days of services/365). In this regard, the severance payment is required only when an employee leaves the employer.
The Korean government has introduced an employer-sponsored retirement pension plan which will supersede the severance pay system. The retirement pension plan could be either a Defined Contribution plan or a Defined Benefit plan. Under the new scheme, an employer is required to make periodic contributions to the plan.
Unfair dismissal
In accordance with Article 23-1 of LSA, an employer can not dismiss or discipline the employees without just cause. Courts in Korea look at the factual circumstances of the dismissal to determine whether the dismissal was considered unfair. In this regard, such just cause includes, but isn’t limited to:
· Due to personal reasons such as illness, the employee is not able to perform his or her work;
· The employee has committed faults such as negligence, dereliction of duties, coarse language, assault, and contravention of rules and regulations etc; and
· There are urgent business needs for such dismissal (e.g. a company dissolution, restructuring etc)
Also, an employer must give a notice of dismissal at least 30 days in advance. Otherwise, an employer is required to make a 30 day-notice pay in lieu of the notice.
Kommentarer