- Overview: South Korea
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Contractor vs. employee: which is better?
Global HR Compliance in South Korea
If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in South Korea Guide below will help you understand the nuances of labor legislation in the country.
When the company is planning to enter a new foreign market of South Korea and has a need to employ a local national there, the first question to answer is how it is going to make local hires.
We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.
This solution helps you employ your global sales force in South Korea as well as in other countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.
Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.
So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in South Korea instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.
Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.
Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in South Korea .
We are experts in global workforce employment in South Korea, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in South Korea.
See Hiring and Firing Workforce in South Korea Guide below for a general overview of labor rules and regulations in the country. Or contact us if you need to employ workers in South Korea or would like to get more details.
Hiring and Firing Workforce in South Korea Guide
Korean long history of continuous economic growth, its political/economic policies that are investment-friendly, highly-evolved infrastructure, well-informed consumers, especially with respect to modern technology and its strategic position in the Asian world make it a very competitive and attractive destination for business – one that cannot be ignored when considering the list of fertile grounds for global expansion.
South Korea has a social, legal and political framework that can be complicated and success-threatening if not properly considered. Consequently, familiarizing yourself with the employment and labor laws, as well as the legal obligations and restrictions is a sine qua non for successful business operation in Korea.
Below are some key facts to note about doing business in South Korea.
# Employment Contracts
Employment contract in Korea can be part-time, fixed-term or indefinite. Notwithstanding the type of contract, employers are obligated to conclude a contract with their new employees in writing. Contracts must contain details about the name of the company, its address, location, job description and necessary working conditions, working hours, wage, benefits and entitlements.
# Minimum employment rights
# Hours of work
The official work time in South Korea is 8 hours per day and 40 hours per week albeit, the employment and labor laws allows for a flexible working hour practices. In most cases, employers are required to get permission of the relevant labor union before they can extend their employees’ normal working hours -this is especially the case when they want to extend hours to some real longer hours. In this case, the daily working hours can be stretched into 12 hours, and the weekly hours – up to 52 hours, provided that the weekly hours do not exceed 40 hours when averaged over a three-month period. During the 8 hours of a work day, employees have the right to an unpaid 60 mins break or 30 mins for every 4 hours worked. It is important to note that female employees who are in their first year of delivery are precluded from working more than 10 hours a day or 46 hours a week (all including overtime). Employers have no right to make their employees to work during the night hours without first seeking their consent or being requested, in case of a pregnant employee. Female workers who are under the age of 18 and those who just put to bed and are still within the first year of their labor cannot be placed on night shift without their permission and the authorization of the Ministry of Employment and Labor. Female employees who are 18 and above age can be allowed to work night shifts with their permission alone.
# Probation period
There is no express prohibition or limitation in Korean Labor Law to this time period. In fact, the Ministry of Labor stated that “probationary period” are not restricted by time period, and can be adjusted based upon the nature of jobs and within reason. Thus, “probationary periods” can be longer or shorter than 3 months, or even extended or shortened, depending upon the needs of the company. However, still the, typical, and most accepted by the Ministry of Labor is a three-month probationary period.
# Annual leave
All employers are required to give their workers a paid day off, usually Sundays for every work week. In addition, employees have the right to a paid day off on May’s Day and any other holidays approved by their employer.
Employees who have worked a minimum of 80 percent of their annual working days are eligible for a 15-day annual paid leave. Employees who have worked for 3+ years in the company are entitled to an extra one paid day calculated for every 2 years of their work for the employer. For those who have not worked up to one year in the company and those who have not worked up to 80% of their annual working days (exclusive of days on leave), the employer is required to give them the number of days leave that correspond to the number of months they have worked without absence (usually one day for every full work month). In all, an employee cannot be given more than 25 days annual vacation a year. Annual leave cannot be accumulated for the subsequent years. If an employee fails to use up his annual leave before the end of the given year, the leave will be cancelled, unless the reason(s) are caused or approved by the employer. Employers are responsible for reminding their employees to use their annual vacation from the first of June and for notifying them in writing about the expiration of any leave day, three months before the expiry date, as failure to do that might require them to give the employee a compensatory leave. Employees have the right to decide on the actual dates to take their annual leave, even though the employer can sometimes influence on their choices, if his reason is to prevent a destructive interference on the normal business operation.
# Parental leave
Expectant mothers are eligible to get 90 days’ maternity leave, of which 60 are fully paid. The other 30 days are paid at a percentage of the mother’s monthly income. 45 days’ leave can be taken before the birth, and the other 45 days after. Also, such employees are entitled to a 60-minute daily time off until the baby is up to one year old. Expectant fathers can take 3 days paid leave during the first thirty days the child is born. Parents with children under 3 years are entitled to one-year parental leave. Employees eligible for parental leave may generally choose to work reduced hours instead of taking parental leave. Reduced working hours should be between 15 hours and 30 hours each week.
# Sick leave
Sick leave benefits are given to employees only if the sickness/injury is work-related. The sick leave entitlement is given upon the submission of a doctor’s note.
Under normal circumstances, an over the time is considered any extra hours worked above the legal daily/weekly limit of 8 hours or 40 hours. Using the method of averaging, overtime is recognized as the number of hours that is above the normal average of 40 hours per week. Overtime is compensated for at a rate corresponding to 1.5 of the employee’s wage. Giving offsetting time off is also permitted provided the employee consents to it. This is also applicable to workers who work between the hours of 10 pm and 6 am.
# Minimum salary
The currency used in South Korea is called won. South Korean employees are usually paid in hour and are entitled to a wage not less than 7,530 won ($7.1) per hour, although the effective comparable minimum wage is higher at 9,036 won ($8.5) per hour due to a mandatory weekly paid holiday for people that work more than 15 hours per week, a law that is absent in other developed countries. The law applies equally to foreign, temporary or contract workers and is increased every year, the latest of which was a 16.4% hike in force since 1 January 2018.
# Employment termination
Under the provisions of the Ministry of Employment and Labor, an employer can terminate an employment contract without prior notice if any of the following is the case:
- if the employee is on probation that should last for less than 3 months
- if the employee is employed on a day-to-day basis for fewer than 3 months
- if the employee is employed on a month-to-month basis to work less than 6 months
- if the employee is employed on a fixed-term basis for up to 2 months’ period
- if the employee is employed for seasonal job for up to 6 months
- if the employee poses a threat to the company
- other reasons such as insolvency, natural disaster, etc.
Any reasons other than the mentioned will require the employer to give the employee at least 30 days’ notice prior to the dismissal date or a compensation payment instead.
The severance amount for each employee who has worked for at least one year is the equivalent of 30 days’ average wages for each year of continuous employment. Average wages are calculated by using wages for the three months preceding termination.
Employment rules provide for a particular process for dismissal such as a disciplinary committee hearing, a dismissal that does not follow that process may be invalid.
The termination notice should be in writing and include the reasons for the termination.