Globalization Partners

South Korea: Get the Specifics Before You Hire Across the Pacific

by Globalization Partners
August 2015
Reading Time: 2 minutes

South Korea Employment LawOver the past 40 years, South Korea has experienced incredible economic growth and global integration, making it a highly sought after high-tech industrialized economy. No wonder many US companies want to hire sales teams or set up a legal entity in the country that is just slightly larger than the state of Indiana. You’ll find a summary of Korea’s most important statutory and market norm benefits below.

Vacation time, annual leave or PTO in South Korea

According to South Korean labor law, employers must give employees one paid day off per week – Sunday is usually that designated day. Many professional employees work a half-day on Saturdays.

The statutory vacation days earned per year are capped at 25 days. While companies with full-time employees are required to provide them with 15 days of paid annual leave after one year of service, each employee gains an additional paid vacation day for each two years of service thereafter. This differs greatly from what we are used to in the US and companies need to keep this in mind when hiring full-time employees in Korea.

Even though Korean employees are entitled to a greater number of paid vacation days, there is no legal requirement for employers to provide paid sick leave for non-work related illnesses or injuries.  However, it is not uncommon that an employer will provide paid sick leave to an employee, whether it is a work related injury or illness or not.

Termination in South Korea

In South Korea, an employer must provide an employee with the minimum statutory notice, which is calculated as follows:

* Less than one year’s service: one week’s notice.
* Between one year and three years’ service: two weeks’ notice.
* Between three years and five years’ service: three weeks’ notice.
* More than five years’ service: four weeks’ notice.

If an employee is over 45 years old and has been with a company for more than two years, the notice period is increased by two weeks. Furthermore, some employment contracts often provide for a longer notice. In some instances, an employee may be entitled to a 12 months notice of employment termination.

Severance Payments in South Korea

If an employer fails to follow the notice periods mentioned above, s/he has to pay the employee an amount equal to what would have been paid to (or on behalf of) them, had they worked during the notice period.

An employee who has worked for a company for more than six months is eligible to make unfair dismissal claims if either:

* S/he is covered by a modern award or enterprise agreement (regardless of how much s/he earns and even if the employee has signed a high income guarantee).
* S/he is award or agreement free and earns less than the relevant income threshold (A $129,300 base salary for 2013/2014).

The primary unfair dismissal remedy is reinstatement. If that is not appropriate, compensation of up to six months’ pay may be awarded.

Please do not hesitate to contact us if you need more information about statutory or market norm benefits in South Korea or if would like to learn more about our Global Employer of Record Platform.

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