Reading a Korean employment contract

The most important thing to know first

The Labor Standards Act sets minimums that a contract cannot go below. A clause purporting to waive them is void — the clause fails, the contract survives, and the statutory minimum applies.

This matters because contracts offered to foreign employees sometimes contain clauses that are simply not enforceable: no severance, no overtime pay, forfeiture of pay on early resignation. Encountering one is not a reason to sign nervously. It is information about the employer.

It is also worth knowing that a written contract is mandatory. An employer who wants to proceed on a handshake is already in breach.

What the contract must contain

For a foreign employee, add: the occupation code the role corresponds to, and whether the employer will support the visa application. See E-7 requirements.

The statutory floor

Minimum wage

Set nationally each year and applies to everyone regardless of nationality or visa status. It is an hourly figure; for a monthly salary the test is the salary divided by contractual hours, including the weekly holiday allowance.

Working hours and overtime

The standard is 40 hours a week and 8 a day, with extended hours capped by statute. Overtime, night work (22:00–06:00) and holiday work all attract premium pay at statutory multiples.

Watch for the fixed-overtime clause (포괄임금제) — a salary stated as including a set number of overtime hours. It is lawful in limited circumstances but is widely abused to disguise unpaid overtime. If your contract has one, check what number of hours it assumes and whether that is realistic for the role.

Severance pay

After one year of continuous service you are entitled to severance (퇴직금) of approximately one month's average wage per year worked. It is statutory, it applies to foreign employees identically, and it is payable whether you resign or are dismissed.

A contract saying "no severance" is void as to that clause. A contract saying severance is "included in your monthly salary" is generally not permitted either.

Annual leave

Fifteen paid days after one year of service, increasing with tenure. In the first year, one day accrues per completed month.

Watch for employers who count public holidays against your annual leave, or who require you to take leave only during fixed shutdown periods. The latter needs a written agreement.

Notice of dismissal

Thirty days' notice or thirty days' pay in lieu. Dismissal also requires just cause at businesses above a size threshold — "we've decided to go a different direction" is not automatically sufficient.

Clauses to look at carefully

Probation

Normal, usually three months, and pay may lawfully be reduced during it within limits. But if you are applying for an E-7, a probation salary below the visa income floor can sink the application. Ask for the full salary from day one with a probation clause that does not reduce pay.

Fixed-term contracts

Common for foreign employees because the term is often matched to the visa. Note that continuous fixed-term employment beyond two years generally converts to indefinite employment by operation of law — which is a protection, not a trap.

Non-compete clauses

Enforceable in Korea but only within limits: reasonable scope, reasonable duration, a legitimate interest to protect, and usually compensation for the restricted period. A broad non-compete with no compensation is unlikely to hold, but litigating it is expensive. Negotiate the scope down before signing.

Training cost repayment

A clause requiring you to repay training costs if you leave early. Enforceable only for genuine, identifiable costs — not as a penalty for resigning, and not for ordinary on-the-job training.

Housing

Common in teaching contracts. Check who pays the deposit (key money), who pays utilities, what happens to the housing if you resign, and whether it is provided or reimbursed. Employer-provided housing that is withdrawn on the day you resign is a real risk if the contract does not address it.

Reading the salary line

Korean salaries are quoted several different ways. Establish which one you are being offered.

A ₩50 million 연봉 is not ₩50 million in your bank account. Income tax, national pension, health insurance, long-term care and employment insurance all come off. Our tax calculator shows the actual take-home for any gross figure, under both tax methods.

Language

Contracts are commonly in Korean, sometimes with an English translation. Two things:

• Ask which version governs. If the Korean version governs and you cannot read it, you are signing something you have not read.
• Get it checked. The Ministry of Employment and Labor helpline on 1350 operates in English. Foreign workers' support centres and metropolitan global centres review contracts free of charge. Both are used routinely and neither is an imposition.

Take the time. An hour spent before signing is worth considerably more than a dispute afterwards.

Before you sign, verify these six things

1. Salary — gross or net, and whether severance is stated as separate.
2. Hours — including any fixed-overtime assumption.
3. Term and probation — and whether probation pay affects your visa eligibility.
4. Severance — confirmed as statutory and separate.
5. Social insurance — confirmed enrolment in all four.
6. Visa support — that the employer will sponsor, and that they meet the staffing ratio.

If something goes wrong

Unpaid wages, unpaid severance, unlawful dismissal, unpaid overtime — all of these have a free, effective route:

• Ministry of Employment and Labor, 1350. English support. You can file a complaint at your regional labour office, free, without a lawyer.
• Foreign workers' support centres. Free advice and help preparing a complaint.
• The Labor Relations Commission for unfair dismissal claims — a formal process, and free.
• Korea Legal Aid Corporation for those below an income threshold.

Foreign workers use these systems constantly and they work. Your visa is not at risk for filing a labour complaint, and employers who suggest otherwise are wrong.

Keep records from day one: the contract, payslips, your own hours log, and any messages about work arrangements. Cases are won on records.