Korean labor law protects anyone who works under an employer's direction for wages, and its core rules apply in full once a workplace ordinarily employs five or more people: a 52-hour weekly cap, 50% overtime premiums, at least 15 days of annual leave after the first year, and justifiable cause for dismissal. Severance of at least 30 days' average wage per year of service and the minimum wage (KRW 10,320 an hour in 2026, KRW 10,700 from 1 January 2027) apply at any size.
Who does Korean labor law protect?
Anyone who, in practice, works under an employer's direction for wages is an employee, whatever the contract says and whatever their nationality. The full Labor Standards Act (근로기준법, Geunro Gijunbeop) applies at workplaces that ordinarily employ five or more people; a shorter list of core rules applies below that.
| Rule | Fewer than 5 employees | 5 or more employees |
|---|---|---|
| Minimum wage, written terms, rest breaks | Applies | Applies |
| Weekly paid holiday (15+ hours a week) | Applies | Applies |
| Severance pay (1+ year, 15+ hours a week) | Applies | Applies |
| 30 days' notice of dismissal | Applies | Applies |
| Maternity leave and parental leave | Applies | Applies |
| Justifiable cause for dismissal, unfair-dismissal claims | Does not apply | Applies |
| 52-hour cap; overtime, night and holiday premiums | Does not apply | Applies |
| Statutory annual leave | Does not apply | Applies |
| Paid public holidays | Does not apply | Applies |
| Serious Accidents Punishment Act | Does not apply | Applies (to all sizes from 5 since 2024) |
Work rules (취업규칙, chwieop gyuchik) must be filed with the Ministry of Employment and Labor (MOEL) from 10 employees. Bills to extend the full Act to these small workplaces were pending in 2026, so check their status before relying on the exemptions. Genuine independent contractors fall outside the Act, but the contract label does not decide status; see our guide to employment types in Korea.
What must a Korean employment contract include?
The contract must state in writing the wage components and how they are calculated and paid, contractual hours, holidays, annual leave, the place of work and the duties, and the employee must receive a copy. Later changes to these terms must also be in writing.
Wages are paid in money, directly, in full, at least once a month on a fixed date, with an itemized pay statement each time. A bilingual Korean–English contract avoids disputes over meaning.
Probation of up to three months is common, and probationers are fully protected: no dismissal without a justifiable reason, so set objective evaluation criteria in writing. Pay may drop to 90% of the minimum wage only during the first three months, only on contracts of one year or more, and never for simple manual work.
What are Korea's working-hour and overtime rules?
The standard is 8 hours a day and 40 hours a week, plus up to 12 hours of agreed overtime, a hard cap of 52 hours in any week at workplaces with five or more employees. Overtime, night (22:00–06:00) and holiday work earn at least a 50% premium on ordinary wages; holiday hours beyond 8 earn 100%.
Breaks must be at least 30 minutes per 4 hours worked, or 1 hour per 8 hours. Staff scheduled for 15 or more hours a week who complete their scheduled workdays also earn a paid weekly day off, paid as the weekly holiday allowance (주휴수당, juhyu sudang). That is why monthly pay is based on 209 hours: (40 + 8 paid hours) × about 4.345 weeks ≈ 209.
Flexible options (averaging hours over periods of up to six months, flextime, deemed hours for off-site work and discretionary hours for designated professional roles) mostly need a written agreement with an employee representative.
What is the minimum wage in Korea in 2026 and 2027?
The minimum wage is KRW 10,320 per hour in 2026 and KRW 10,700 from 1 January 2027. The Minimum Wage Commission set the 2027 rate in July 2026, and MOEL announced it on 5 August 2026.
| Year | Hourly | Monthly (209 paid hours) | Increase |
|---|---|---|---|
| 2025 | KRW 10,030 | KRW 2,096,270 | — |
| 2026 | KRW 10,320 | KRW 2,156,880 | 2.9% |
| 2027 | KRW 10,700 | KRW 2,236,300 | 3.7% |
The minimum wage covers every worker at every workplace size, including temporary and part-time staff, and is tested per hour, so a fixed salary combined with long hours can fall below it.
How much leave do employees in Korea get?
Full-time employees earn 15 days of paid annual leave (연차휴가, yeoncha hyuga) after their first year, plus paid public holidays and statutory family leave. Unused annual leave must be paid out unless the employer followed the written leave-use procedure in Article 61 of the Act.
| Leave | Entitlement | Who pays |
|---|---|---|
| Annual leave | Up to 11 days in year one; 15 days after one year; 1 extra day every two years from year three, up to 25 | Employer |
| Public holidays | Seollal and Chuseok (3 days each) plus other national holidays and substitute holidays | Employer (5+ employee workplaces) |
| Maternity leave | 90 days (100 for a premature birth, 120 for multiple births), at least 45 days of it after the birth (60 for multiple births) | Employer for 60 days (75 for multiple births), then the government, capped |
| Paternity leave | 20 paid days within 120 days of the birth, in up to three parts | Employer; smaller firms can claim a government subsidy |
| Parental leave (육아휴직, yuga hyujik) | Up to 1 year per parent; 1.5 years each if both parents take at least 3 months | Capped benefit from the Employment Insurance fund |
How does severance pay work in Korea?
Employees with one year or more of service who work 15 or more hours a week are owed severance pay (퇴직금, toejikgeum) of at least 30 days' average wage per year of service, whatever the reason for leaving, within 14 days of their last day.
Average wage is total pay for the final three calendar months divided by the calendar days in that period, so late bonuses and overtime raise the payout. Budget about one month's pay per year of service, roughly 8.3% of annual salary; our tax and social insurance guide shows the full employer cost.
Many employers fund severance through a defined benefit (DB) or defined contribution (DC) retirement pension plan. Offers that say severance is "included" (퇴직금 포함) need care: severance cannot legally be prepaid monthly. The government, unions and employer groups have agreed to make externally funded retirement plans mandatory for all employers, phased in by company size, with legislation targeted for the end of 2026.
Can you dismiss an employee in Korea?
Yes, but there is no at-will employment. At workplaces with five or more employees you need justifiable cause (정당한 이유, jeongdanghan iyu), written notice of the reason and date, and 30 days' notice or 30 days' ordinary wage in lieu. The test is whether the relationship can no longer be maintained under accepted social norms, so poor performance needs documented evidence from a fair evaluation.
- Written notice: a dismissal not given in writing with its reason and date is invalid.
- Notice period: 30 days or pay in lieu, except for employees with less than three months of service.
- Protected periods: no dismissal during work-injury leave or maternity leave, or for 30 days afterward.
- Redundancies: require an urgent business need, efforts to avoid dismissals, fair selection and 50 days' notice to the union or employee representatives.
- Remedies: employees can apply to the Labor Relations Commission (노동위원회, Nodong Wiwonhoe) within 3 months; ignoring a remedy order brings charges of up to KRW 30 million.
In practice, many employers negotiate a written mutual separation (권고사직, gwongo sajik) instead. The mandatory retirement age is 60.
What changed in 2026, and which duties apply every year?
The headline 2026 change is the Yellow Envelope Act (노란봉투법, Noran Bongtu Beop), a Trade Union Act amendment in force since 10 March 2026. A lead company with real control over subcontracted workers' conditions can be required to bargain with their unions, and damage claims against strikers are limited.
- Unpaid wages and severance: since 23 October 2025, 20% annual late-payment interest also covers current employees, and courts can award up to 3× the unpaid amount for intentional or long-running (3+ months) arrears. A 2026 amendment then raised the criminal penalty from up to 3 years or KRW 30 million to up to 5 years or KRW 50 million, for severance since 18 September 2026 and for wages from 8 October 2026.
- Workplace harassment: banned since 2019. Employers must investigate promptly, protect the victim and act on findings; fines reach KRW 10 million for an employer who harasses and KRW 5 million for failing to act.
- Annual training: sexual-harassment prevention training at least once a year for the employer and all employees.
- Serious accidents: the Serious Accidents Punishment Act has covered all workplaces with five or more employees since 2024.
- Under discussion: raising the retirement age toward 65 (bills pending), mandatory funded retirement plans and extending the Act to the smallest workplaces.
Our HR compliance guide covers the yearly obligations once your team is in place.
How Hire From Korea helps
Hire From Korea is a recruiter-led hiring partner led by Daniel Ahn and Sandy Kang and operated by DevTeam Co., Ltd. in Incheon. We deliver a shortlist of 3–5 vetted Korean candidates, coordinate interviews in English and Korean, and can add contract review, payroll and tax support or EOR setup on a custom quote. Our success fee is 15–20% of first-year salary, charged only on a successful hire and backed by a 30-day replacement guarantee. Tell us about your role and we will reply within 24 hours.
Frequently asked questions
Does Korean labor law apply if my company has no office in Korea?
If you employ someone through your own Korean entity or an Employer of Record, Korean labor law governs that employment in full. A remote independent contractor is outside the Labor Standards Act on paper, but one who works like an employee, with set hours, close supervision and exclusivity, can be treated as one and claim rights such as severance.
Do foreign employees in Korea have the same rights as Korean employees?
Yes. The Labor Standards Act protects workers regardless of nationality and bans discriminatory working conditions based on it. Minimum wage, working-hour limits, leave and severance apply in the same way.
Do I have to pay out unused annual leave in Korea?
Usually, yes. The right to take leave lapses after a year, but the right to be paid for it does not, unless you followed the Article 61 procedure of written reminders and deadlines. Unused leave is also paid out when someone leaves.
Is the 4.5-day workweek mandatory in Korea?
No. It is voluntary. From 2026, small and mid-sized companies that cut hours without cutting pay can receive government subsidies of KRW 200,000–800,000 per worker per month, but the legal standard remains 40 hours a week.
Sources
- Korean Law Information Center — English statutes — Labor Standards Act and related laws
- KOTRA / InvestKorea — Labor Laws in Korea 2025 — contracts, probation, breaks, public holidays, leave, 2025 minimum wage, dismissal procedure, harassment fines, statutory training
- Seoul Labor Center — Labor laws for workplaces with fewer than 5 employees — rules that do and do not apply below five employees
- Lockton — South Korea expands family leave entitlements (January 2025) — who funds maternity, paternity and parental leave pay
- Korea JoongAng Daily — Hourly minimum wage set at 10,700 won for 2027 — 2027 rate and timeline
- Korea.kr (government policy news) — Wage arrears measures and the October 2025 amendment — 3× damages and late-payment interest for current employees
- Littler — Expanded employer liability and bargaining duties in Korea from March 2026 — Yellow Envelope Act
- HUB International — South Korea severance pay reform and pension changes (June 2026) — planned mandatory funded retirement plans
- Hankook Ilbo — Bills to apply the Labor Standards Act to workplaces under 5 employees (April 2026) — status of the small-workplace bills
This guide is general information, not legal or tax advice. Rules change — confirm specifics with a licensed Korean labor attorney (노무사) or tax accountant.