A Practical Guide to Employment Terms — From Working Conditions to Severance Pay
To be protected under Korean labor laws, foreign workers must sign a written employment contract.
This contract is a legal document that clarifies the rights of the employee and the obligations of the employer.
It also serves as key evidence in case of disputes.
Due to language barriers, cultural differences, and varying employment types,
it is essential for foreign workers to ensure that the contract is clearly written and not disadvantageous.
However, many find it difficult to assess whether the contract is fair and properly drafted.
Below, we highlight the five essential elements that must be included in an employment contract for foreign workers,
along with key terminology and conditions you should understand.
1. Job Description and Work Location
The contract must specify what kind of work you will be performing and where you will be working.
Avoid vague terms like “production worker” — the job and work site must be described clearly.
❌ Poor example: “Production worker at ABC Company”
✅ Good example: “Customer service, product display, and inventory management at the clothing store
located in Gangnam Main Branch of ABC Company (Work Location: 00-ro 1, Gangnam-gu, Seoul)”
2. Wage Details
Wage-related disputes are the most common issue among foreign workers. The contract must clearly state:
Wage type (monthly, hourly), Amount (before or after tax), Payment date, Payment method.
✅ Example:
✔Monthly Wage: KRW 2,200,000 (before tax)
✔Payment Date: 10th of every month
✔Payment Method: Bank transfer to worker’s personal account
🔖 Tip: Many foreign workers misunderstand the difference between before-tax (gross) and after-tax (net) salary.
Most contracts list gross salary, from which approximately 10% is typically deducted for taxes and insurance.
3. Working Hours, Break Time, and Days Off
Confirm how many hours per day you’ll work, how many days per week, and whether breaks and rest days are included.
✅ Example:
✔Workdays: Monday to Friday
✔Working Hours: 9:00 AM – 6:00 PM (including 1-hour lunch)
✔Weekly Holiday: Sunday
Under Korean law, a standard workweek is 8 hours/day, 40 hours/week. Anything beyond this is considered overtime and requires extra pay.
🔖 Tip: Why is Saturday not listed as a paid holiday?
By law, a weekly paid holiday (주휴일) applies only if the employee works a full week.
Sunday is typically the designated paid rest day. Saturday is a rest day but unpaid, unless otherwise stated.
4. Contract Duration
The contract must specify the start and end date of employment. This is especially important for visa issuance and extensions.
✅ Example:
✔Contract Period: Feb 1, 2025 – Jan 31, 2026
✔Renewal: Negotiable based on performance
Avoid contracts with no end date, as this can cause visa-related issues. If you’re a permanent (full-time) employee, an end date is not required.
5. Four Major Social Insurances and Welfare
Korea provides four basic types of insurance for all workers, including foreign nationals:
✔National Pension
✔Health Insurance
✔Employment Insurance
✔Industrial Accident Compensation Insurance
Make sure these are clearly mentioned in the contract.
🔖 If any are excluded, the employer must provide a valid reason, and you must agree in writing.
These insurances cover medical bills, job loss, and work-related accidents—especially important in physical labor environments.
🟨 Annual Leave Pay
All employees who work for one year continuously are entitled to at least 15 days of paid vacation.
If unused, the company must pay the unused vacation days in cash upon resignation.
❗Even with less than one year of employment, workers earn 1 paid day per month.
The company must pay unused leave upon termination.
🟨 Overtime Pay
Overtime refers to work beyond 8 hours a day or 40 hours a week.
It must be paid at 1.5x the regular hourly rate.
❗It must be clearly stated as a separate item in the pay slip under “Overtime Pay.”
❗Even for monthly salary workers, overtime pay must be listed separately.
🔖 If your contract uses a comprehensive wage system, you may not be paid separately for overtime.
🟨 Holiday / Night Work Pay
If you work during public holidays, weekends, or at night, you are entitled to extra pay:
✔Holiday or night work: 1.5x pay
✔Holiday + night work: 2x or more
❗ Even if the contract says you must work holidays, you must be compensated separately unless under a comprehensive wage system.
🔖However, if a comprehensive salary contract is signed, additional work allowances may not be paid separately.
🟨 Comprehensive Salary Contract
This is a common method used by smaller companies in Korea, where base salary includes all allowances (overtime, night work, holidays).
❗ Be cautious: You may not receive separate pay for extra hours.
❗If you often work overtime, it’s better to have separate compensation clauses.
Yes. Any employee who has worked more than one year is legally entitled to severance pay upon termination, regardless of nationality.
✅ When: After one year of continuous service
✅ Amount: Equal to one month’s average salary based on the last 3 months of wages
❗️Important Points:
✔Severance pay is separate from your salary
✔Be cautious if your contract says severance is included in your salary
✔Some employers may end the contract before 1 year to avoid paying it
✔ Severance must be paid within 14 days of resignation. If delayed, the employee can claim late payment interest.
HanGuk Visa offers personalized services for
: Personal and corporate visa processing, Translation support, Employment and labor-related solutions.
.jpeg)
We go beyond just visa processing — we support foreign workers with:
✔Employment contracts
✔Wage condition reviews
✔Unpaid wage responses
✔Practical legal guidance on labor issues
We provide customized visa solutions tailored to your specific situation.
If you have any questions or need detailed consultation, please feel free to contact us using the information below :)
📞 Tel: 02-3210-1113
✉ KakaoTalk Channel: 한국비자
📣 Instagram: @hanguk_visa
.jpg)
