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Compliance
Employment in South Korea is governed by the Labor Standards Act (LSA), along with several supplementary laws including the Minimum Wage Act, Equal Employment Opportunity Act, and Occupational Safety and Health Act. The Ministry of Employment and Labor (MOEL) is the primary regulator and enforcer of labor standards. Companies operating in South Korea must comply with these statutes to avoid administrative penalties, litigation, and reputational risks.
Employers are required to provide a written employment contract 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. If not provided, the employer may face fines. Probation periods are permitted but must still follow full labor law protections. Contracts must distinguish between fixed-term and indefinite employment to ensure compliance with Korea’s security-of-tenure laws.
Standard working hours are 40 hours per week (8 hours per day). Employees may work up to 12 additional hours per week as overtime, for a total of 52 hours, unless special exemptions apply. Overtime pay is required at 150% of the normal hourly wage. Work performed on public holidays or weekends must be compensated at 150–200%. Employers must record and store work hour logs and are subject to inspection.
South Korea enforces strict wage protection laws. The minimum wage for 2025 is KRW 9,860 per hour. Employers must pay wages at least once per month and must provide an itemized payslip showing basic pay, bonuses, and deductions. Deductions are only lawful if provided by law or agreed to in writing by the employee. Wage withholding, underpayment, or delay may result in fines up to KRW 30 million or imprisonment.
Employers must enroll all employees in the four major insurance systems: National Pension, National Health Insurance, Employment Insurance, and Industrial Accident Compensation Insurance. Employer contributions vary, typically around 10–15% of gross wages combined. Failing to register or remit payments is a prosecutable offense. Audits by the National Health Insurance Service (NHIS) and National Pension Service (NPS) are common.
Foreign employees must obtain an E-7 or D-8 visa for professional roles. Employers must confirm that the position is eligible for foreign employment and meet wage thresholds defined by MOEL. The hiring entity must also report job offers, contract terms, and departures to immigration authorities. Employers hiring without the proper sponsorship risk fines and potential bans on hiring foreign workers.
South Korea has strong job security laws. Dismissal is only permitted for 'just cause,' which must be objectively verifiable. Employers must provide at least 30 days' written notice or 30 days’ pay in lieu. Redundancy (collective dismissal) requires consultation with labor representatives, government reporting, and adherence to procedural guidelines. Wrongful termination can result in reinstatement orders and back pay under labor tribunal rulings.
The MOEL has authority to inspect businesses for violations of labor standards, wages, and safety. Employees may file complaints anonymously. Disputes are resolved via mediation, labor tribunals, or courts. Employers must cooperate with investigators and provide documentation when requested. Violations may lead to criminal charges, suspension of business licenses, or compensation awards.
AYP ensures your employment practices in South Korea comply with LSA and other relevant regulations. Our EOR service helps you draft compliant contracts, manage payroll and tax obligations, and navigate visa processes for foreign employees. We mitigate your legal exposure through structured onboarding, documentation, and compliance audits.
Thinking of hiring in South Korea? Partner with AYP to ensure local employment law compliance.
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