South Korea Employer of Record
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Employer of record in South Korea
If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in South Korea, an employer of record may be the best option for achieving your global growth objectives.
An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in South Korea―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.
Learn about the hiring, employment, payroll and benefits requirements for workers in South Korea and how our employer of record service, GEO, and local HR experts can help you manage your international employment needs.
Hiring in South Korea
In South Korea, numerous labor laws govern the relationship between employers and employees. Relevant statutes include the Labor Standards Act, the Framework Act on Employment Policy, the Employment Security Act, the Act on Equal Employment and Support for Work-Family Reconciliation, the Industrial Accident Compensation Insurance Act, and the Trade Unions and Labor Relations Adjustment Act. At least 30 other statutes also apply. The Ministry of Employment and Labor is the principal agency governing employment policies.
Since employment in South Korea is highly regulated, compliant employment contracts are an essential business need. As your employer of record and PEO in South Korea, we can ensure that every contract, for every worker, meets all requirements. We can also provide you with guidance about cultural norms and hiring best practices and keep you up-to-date with employment regulations as they change.
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Employment contracts in South Korea
As you look to hire employees in South Korea, here are some standard regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.
Working hours
The standard workday in South Korea is eight hours, with a 40-hour workweek.
Providing that the average number of weekly hours over two weeks does not exceed 40 and no workweek exceeds 48 hours, employers may require employees to exceed the standard number of work hours in a day or week without paying overtime.
Employees get one day off per week with pay, typically on Sundays.
Employees are entitled to a 30-minute unpaid break for every four work hours or one hour for every eight work hours.
Employers cannot require female employees to work between 10 p.m. and 6 a.m. or on holidays unless they give consent.
Compensation
As you consider the appropriate salary to offer new employees, keep in mind:
- The minimum wage is decided annually by the labor minister in consultation with the Minimum Wage Council. Effective January 2024 to December 31, 2024, the hourly minimum wage will be 9,860 won.
- Employees who perform night work, e.g., between 10 p.m. and 6 a.m., must be paid time and a half of their regular wages unless workers’ representatives agree to compensatory time off instead.
- Workers get paid time and a half for overtime work of less than eight hours, or 200% if eight hours of work are exceeded.
- Collective agreements may regulate the minimum wage or legal salary range.
As your employer of record in South Korea, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.
Bonuses
Bonuses are not addressed in South Korea’s labor laws.
Probationary period
Probationary periods usually last up to three months.
Termination and severance
Terminating employees in South Korea is difficult. According to the law, employers may not fire, lay off, suspend or transfer a worker, cut a worker’s pay, or take other punitive measures without just cause.
Employers must provide either 30 days’ notice or 30 days’ compensation in lieu of notice except in the following cases:
- When employees are hired on a daily basis for less than three months
- When employees are hired for a fixed period of two months or less
- When workers are employed on a monthly basis for less than six months
- When seasonal employees are contracted for six months or less
- When probationary employees are employed for less than three months
- When workers cause considerable harm to the business or intentionally damage workplace property
- When it is impossible to continue the business because of extraordinary circumstances such as natural disasters, armed conflict, or bankruptcy
Employees are entitled to severance pay of one month’s salary for each year of employment paid within two weeks of termination of employment.
As your employer of record in South Korea, we can work with you to quickly handle the unforeseen event of an employee termination, providing legal guidance and a personalized process that ensures you stay out of labor court.
Employee benefits and paid leave in South Korea
When negotiating terms of an employment contract with a candidate in South Korea, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.
Maternity leave
Pregnant employees are entitled to 90 days of maternity leave, at least half of which must be taken after giving birth. Employers pay full wages for the first 60 days, and the rest is covered by the Employment Insurance Fund if the employee has participated for at least 180 days by the end of maternity leave.
Pregnant employees carrying two or more children are entitled to 120 days of maternity leave, with 75 days paid by the employer. These benefits also apply to employees who have experienced miscarriage or stillbirth, with some modifications.
Pregnant workers who are within the first 12 weeks of pregnancy or beyond the 36th week can reduce their working hours by two hours a day with no reduction in pay.
Employees are entitled to paid time off for prenatal doctor visits. Women with children under 1 year may take two paid nursing breaks per day of 30 minutes each.
Employees may not be fired during maternity leave or within 30 days of returning to work.
Vacation
Employees are entitled to vacation days as follows:
- In the first year of employment: 11 days’ paid leave
- Employees who have worked for their employer for at least one year: 15 days
- Employees with at least three years of employment: 15 days plus one additional day for every two years of service
- Employees who work less than 80% of the annual workdays (not counting days off due to occupational injuries, illness, or maternity leave): one day for every full month of attendance
Total days off may not exceed 25 per year.
Paid leave is forfeited if not used within one year of being earned unless the failure to use the leave was caused by the employer, and employers are required to begin reminding employees to use their annual leave on July 1 of each year.
Under a Working Hours Savings System, employees can take leave instead of compensation for hours worked on extended holiday or night work or they can work extended holiday or night work hours to make up for hours they use for leave.
Holidays
The government mandates only one paid holiday: Labor Day (May 1). Employers may offer others but are not required to do so.
If the holiday falls on a weekend it is moved to the next workday. Employees who are required to work on public holidays must receive 150% of the pay for the hours worked.
The government plans to conduct a survey of public holidays and release additional guidance on which public holidays will be a part of this practice later.
Sick leave
Employers are required to pay employees for sick leave only in cases of work-related injury or illness, although in practice, many employers offer paid sick leave for non-work-related illnesses with a doctor’s note.
Employers are required to give female employees one day of menstruation leave per month if requested.
Employees may not be fired during occupational injury leave or within 30 days of returning to work.
Health coverage
The legal retirement age is 61, rising gradually to 65 by 2033. The National Pension Scheme is a social insurance program financed by equal contributions from employers and employees. Maximum contributions are 9%, split equally between the employer and the employee. Workers employed for less than a month or less than 80 hours monthly are exempt from social insurance contributions.
Similarly, health insurance is jointly financed with a 3.26% tax on both employers and employees. As with pension contributions, workers employed for less than a month or less than 80 hours monthly are exempt.
Additional benefits
In addition to healthcare benefits, employees in South Korea are entitled to pension, which is funded by government tax revenues, as well as workers compensation, which is covered through mandated employer insurance.
Employer social costs will cover a large portion of employee benefits in South Korea, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance if needed.
Updated: February 09, 2024
Employee onboarding with an employer of record in South Korea
We write and validate all local employment contracts, streamlining the onboarding process for you and your South Korean employees—all you have to do is provide relevant information and review and approve the employment agreement. As your employer of record in South Korea, we will:
- Schedule a welcome call to discuss HR and employment information for South Korea, as well as answer any questions
- Prepare a customized employment contract in English and Korean (or other local language)
- Share the employment contract and benefits information with the new employee for signature and review
- Gather tax and banking information from the employee to set up payroll
- Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll
The entire onboarding process for the employee is often completed in as little as two weeks.
Partner with Safeguard Global as your employer of record and PEO in South Korea
With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on GEO, our employer of record solution to expand and hire in over 170+ countries around the world, quickly and compliantly.
We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in South Korea. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.
Additionally, as a global payroll provider, we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.
Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.