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Compliance
Published:
January 13, 2026
Last updated:
January 13, 2026
South Korea represents a significant APAC market with advanced economy, highly educated workforce, strong technology and manufacturing sectors, and sophisticated consumer markets. However, employment regulations provide substantial employee protections through job security provisions, mandatory benefits, strict working hour limits, and procedural requirements that differ significantly from more employer-flexible markets.
Organizations managing employees across multiple APAC markets face particular complexity when adding South Korea to their regional footprint. Unlike markets with simpler termination procedures (Singapore, Hong Kong), South Korea requires demonstrating "just cause" for dismissals with objective verification, making workforce management and restructuring operationally challenging.
This guide provides mid-market perspective on South Korea's employment laws and how organizations without dedicated in-country HR specialists can maintain compliance while scaling operations.
Employment in South Korea is governed by the Labor Standards Act (LSA), comprehensive legislation establishing minimum labor standards and employee protections.
Key legislation:
Labor Standards Act: Core legislation governing employment relationships including contracts, wages, working hours, leave entitlements, termination procedures, and dismissal protections.
Minimum Wage Act: Establishes national minimum wage adjusted annually.
Equal Employment Opportunity and Work-Family Balance Assistance Act: Prohibits employment discrimination, addresses sexual harassment, and provides work-family balance support including parental leave.
Occupational Safety and Health Act: Establishes workplace safety standards and employer duties.
Act on the Protection of Temporary Agency Workers: Regulates dispatched worker arrangements limiting duration and requiring equal treatment.
Act on the Promotion of Worker Participation and Cooperation: Requires labor-management councils in workplaces with 30+ employees.
Ministry of Employment and Labor (MOEL): Primary enforcement authority conducting workplace inspections, investigating complaints, mediating disputes, and prosecuting violations.
National Labor Relations Commission (NLRC): Quasi-judicial body adjudicating unfair labor practice complaints and unfair dismissal cases.
Regional labor offices: Local MOEL offices conducting day-to-day enforcement, handling complaints, and issuing compliance orders.
For organizations expanding into South Korea, understanding that employment law violations carry significant penalties—including fines, imprisonment, and reinstatement orders—creates strong compliance imperative.
Employers must provide written employment contracts specifying wages, job duties, working hours, rest periods, holidays, and other working conditions. Contracts must be issued on or before the first day of employment.
Mandatory contract provisions:
Penalties: Employers failing to provide written contracts may face fines up to KRW 5 million.
Indefinite-term employment: Standard employment relationship without specified end date. Provides strongest employee protections including job security requiring "just cause" for dismissal.
Fixed-term employment: Contracts with specified end dates. Maximum duration 2 years (renewable once). After 2 years, automatically converts to indefinite-term employment. Used for temporary projects, seasonal work, or specific task completion.
Probation periods: Permitted (typically 3 months) but employees retain full labor law protections including minimum wage, working hour limits, and dismissal protections. Employers cannot arbitrarily terminate during probation—must have valid reasons.
For organizations hiring in South Korea, using compliant contract templates, ensuring distribution before/on first work day, and understanding fixed-term conversion rules prevents common violations.
Legal limits: Maximum 40 hours per week (8 hours per day over 5-day work week).
Overtime cap: Maximum 12 additional hours per week as overtime, totaling 52 hours per week maximum (including standard + overtime).
Rest periods: Minimum 30-minute break for 4 hours continuous work; 1-hour break for 8 hours continuous work.
Weekly rest day: Minimum 1 rest day per week (paid rest day for employees working full week).
Overtime defined: Work beyond 40 hours weekly or 8 hours daily.
Overtime compensation: 150% of regular hourly wage (50% premium).
Holiday/weekend work: 150-200% depending on circumstances (150% for work on paid rest day; additional premium if overtime on rest day).
Night work premium: Work between 10:00 PM and 6:00 AM receives additional 50% premium (stacks with other premiums).
Example: Employee earning KRW 3,000,000/month (approximately KRW 17,241/hour based on 174 working hours) works 10 hours overtime, 8 hours on rest day:
Work hour documentation: Employers must maintain accurate time records showing daily working hours, overtime hours, rest periods. Records subject to MOEL inspection.
Penalties: Violations including exceeding 52-hour weekly cap, failing to pay overtime premiums, or inadequate time records result in fines up to KRW 20 million and/or imprisonment up to 2 years.
For organizations managing South Korea operations, implementing time tracking systems ensuring 52-hour weekly cap compliance, accurately calculating multiple premium rates, and maintaining detailed records becomes operationally critical.
2025 minimum wage: KRW 9,860 per hour (approximately KRW 2,060,740 per month for 209 working hours).
Minimum wage adjusts annually through Minimum Wage Commission recommendations approved by MOEL.
Payment frequency: Wages must be paid at least once per month on designated pay day.
Payment timing: Prompt payment required—delays violate Labor Standards Act.
Payment method: Cash or bank transfer. Direct deposit increasingly common with employee consent.
Payslip requirements: Employers must provide itemized payslips showing:
Permitted deductions:
Prohibited deductions: Arbitrary deductions, excessive deductions, deductions as punishment without proper procedure.
Wage payment violations: Underpayment, withholding, or delays may result in fines up to KRW 30 million or imprisonment up to 3 years.
For organizations managing South Korea payroll, ensuring timely monthly payment, issuing compliant itemized payslips, making only lawful deductions, and maintaining wage records for inspection prevents serious violations.
Explore payroll compliance across APAC markets.
South Korea requires employer and employee enrollment in four mandatory insurance schemes.
National Pension (국민연금):
National Health Insurance (건강보험):
Employment Insurance (고용보험):
Industrial Accident Compensation Insurance (산재보험):
Combined employer social insurance contributions: Approximately 10-15% of employee's monthly salary depending on industry classification for industrial accident insurance and company size for employment insurance.
Example - Office worker earning KRW 3,000,000/month:
Registration deadlines: Employers must register employees with respective insurance agencies within 14 days of employment commencement.
Contribution remittance: Monthly contributions typically due by 10th of following month.
Audits: National Health Insurance Service (NHIS) and National Pension Service (NPS) conduct periodic audits verifying enrollment and contribution accuracy. Non-compliance results in penalties, back payments plus interest, and potential prosecution.
For organizations managing South Korea payroll, ensuring timely registration with all four insurance schemes, accurate monthly contribution calculations, and remittance by deadlines prevents penalties and employee complaints.
Foreign nationals require valid work visas before commencing employment in South Korea.
E-7 (Specially Designated Activities): For foreign professionals in specific occupations requiring specialized knowledge or skills (IT, engineering, research, marketing, design, interpretation, etc.).
Eligibility:
D-8 (Corporate Investment): For foreign nationals investing in or operating businesses in South Korea.
E-9, H-2 (Employment Permits): For lower-skilled foreign workers in manufacturing, construction, agriculture, fishing, service sectors under Employment Permit System (EPS). Subject to quotas and specific nationality restrictions.
Visa sponsorship: Employers sponsor foreign employees providing:
Salary thresholds: Foreign professional salaries must meet MOEL-defined minimums (typically higher than minimum wage) and be comparable to Korean employees in similar positions.
Reporting requirements: Employers must report job offers, contract terms, employment changes, and departures to immigration authorities within specified timeframes.
Equal treatment: Foreign workers must receive wages and benefits equal to or better than Korean employees in comparable positions.
Illegal employment: Hiring foreign nationals without proper work visas:
For organizations establishing South Korea operations with expatriate management or technical staff, budgeting adequate time (2-4 months) for visa processing, ensuring salary packages meet thresholds, and maintaining meticulous documentation prevents compliance exposure.
South Korea provides strong job security protections making dismissals operationally challenging compared to more employer-flexible markets.
"Just cause" requirement: Dismissals must be based on objectively verifiable reasons that are socially acceptable. This creates high bar similar to Japan's dismissal standards.
Just cause examples:
Procedural requirements:
Minimum notice: Employers must provide at least 30 days advance written notice or 30 days' average wages in lieu of notice for dismissals.
Immediate dismissal: Permitted only with MOEL approval for extreme misconduct. Even with approval, many employers avoid immediate dismissal due to wrongful termination risk.
Eligibility: Employees who worked one year or more are entitled to severance pay upon termination (regardless of reason, except dismissal for serious misconduct).
Calculation: One month's average wage per year of service (minimum).
Average wage: Based on wages earned during 3 months before termination divided by total days in that period.
Example: Employee with 5 years service earning average KRW 3,000,000/month:
Strict requirements for dismissing multiple employees due to business reasons:
If dismissal found unlawful during NLRC proceedings or court litigation:
For organizations managing terminations in South Korea, understanding dismissals are operationally difficult, documenting performance issues thoroughly, exhausting improvement opportunities, consulting local labor counsel before proceeding, and often negotiating voluntary resignation with severance packages prevents costly wrongful dismissal liability.
Learn more about employee termination challenges across APAC.
Regional labor offices conduct routine and complaint-driven inspections verifying:
Employee complaints: Employees may file complaints anonymously. MOEL investigates and may issue compliance orders, fines, or refer for prosecution.
Mediation: MOEL labor offices provide mediation services attempting resolution before formal proceedings.
National Labor Relations Commission (NLRC): Adjudicates unfair dismissal cases and unfair labor practice complaints. Decisions subject to appeal to courts.
Courts: Employment disputes may proceed through civil courts for monetary claims or injunctions.
Cooperation obligations: Employers must cooperate with investigators, provide documentation when requested, respond to orders within specified timeframes.
Penalties: Violations may result in criminal charges (fines, imprisonment), suspension of business licenses, compensation awards, reinstatement orders.
For organizations operating in South Korea, maintaining meticulous employment records, conducting internal compliance audits, responding promptly to MOEL inquiries, and seeking legal counsel for complex cases reduces inspection and dispute risks.
Strong job security protections: South Korea provides among strongest employee protections in APAC alongside Japan. Dismissal difficulty significantly higher than Singapore/Hong Kong/Malaysia, comparable to Japan and Philippines.
Strict working hour limits: 52-hour weekly maximum (40 standard + 12 overtime) stricter than Hong Kong (no statutory limit), comparable to Japan (similar limits), more flexible than mainland China (44-48 weekly in practice).
Mandatory severance for 1+ year service: One month per year of service required for all employees with 1+ years (regardless of termination reason except serious misconduct). Similar to Taiwan, exceeds most APAC markets with no statutory severance.
Comprehensive social insurance: Four mandatory schemes (combined ~10-15% employer cost) comparable to Japan (15-20%), lower than mainland China (30-37%), higher than Hong Kong MPF (5% capped), Singapore CPF for younger workers (17%).
Foreign worker salary thresholds: E-7 visa minimum salaries (KRW 2-3 million/month) create floor higher than minimum wage, comparable to Singapore EP minimums.
Labor-management councils: Workplaces with 30+ employees must establish councils for consultation—more formal requirement than most APAC markets except where strong unionization.
Explore AYP's EOR services across APAC markets, or learn about compliance challenges when hiring across Asia.
