Many businesses in Korea are now hiring foreign workers.

However, just because someone is a foreigner does not mean the employment relationship can be freely managed.

In fact, wages, employment contracts, and allowances are often the most frequent sources of conflict between employers and foreign employees.

Moreover, foreign workers may not be fluent in Korean or familiar with local regulations.

If employers take advantage of this and draft unfair employment terms, they may later face penalties or even criminal charges.

This article outlines key information you must know about foreign worker compensation,

how to write employment contracts, and the legal obligations for providing allowances.

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How Is Hiring Foreign Workers Different from Hiring Korean Workers?

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1) Wages

Can different wage standards be applied to foreign workers?

No. Absolutely not.

Korea’s Labor Standards Act applies equally to foreign and Korean workers.

This means that minimum wage, holiday pay, and overtime compensation must be the same for both.

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✅ Key Wage Standards (as of 2025):

✔Minimum hourly wage: ₩10,030

✔Workers who work 15+ hours per week are entitled to weekly holiday allowance

✔Overtime, night work, and holiday work must be paid 1.5x the normal wage

❗“Can I pay foreign workers a bit less?”

→ No. That is clearly illegal and may result in fines or criminal charges during inspections.

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2) Employment Contracts

Contracts for foreign workers must be in writing. Verbal agreements or text messages are not legally sufficient.

✅ Essential Contract Items:

✔Wage

✔Working hours

✔Work location and job duties

✔Contract duration

✔Holidays and leave

✔Severance pay terms

❗It is strongly recommended to include English or native-language translations for foreign workers.

This reduces misunderstandings and helps prevent legal disputes.

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3) Allowances

Foreign workers must be given the same allowances as Korean workers. The following are often overlooked but legally required:

✅ Mandatory Allowances:

✔Weekly holiday allowance: For those who work 15+ hours/week and attend all scheduled workdays

✔Overtime pay: When working more than 8 hours a day or 40 hours a week

✔Night work allowance: For work between 10 PM and 6 AM

✔Holiday work allowance: For work on Sundays or designated holidays

❗Pay stubs must be issued monthly. This is a legal obligation.

Visa Status & Employment Eligibility

Foreigners must have a visa type that allows employment in Korea.

Employers must confirm the foreign employee’s visa status and eligibility before hiring.

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4) Severance Pay

All employees—including foreigners—who work for more than one year and average 15+ hours per week are entitled to severance pay.

✅ Applies to workers with visas such as:

✔F-4 (Overseas Korean)

✔E-9 (Non-professional employment)

✔H-2 (Visiting employment)

✔D-2 (Student, if working part-time legally)

❗Avoid paying severance in cash without documentation.

Always issue proper tax forms like Severance Income Withholding Receipts to protect your business during disputes.

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5) 4 Major Social Insurances for Foreign Workers

✅ National Pension

Most foreign workers must enroll.

Some countries (e.g., U.S., China, Indonesia, Philippines, Vietnam) have social security agreements with Korea that exempt participation.

→ Employers must submit exemption documents to the National Pension Service.

Lump-sum Refund: Foreign workers can apply for a refund upon leaving Korea.

→ This must be done by the worker directly; employers are not responsible.

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✅ Health Insurance

All legally employed foreign workers must be enrolled as workplace subscribers.

Employers must report to the National Health Insurance Service.

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✅ Employment Insurance

Mandatory for all legally employed foreigners.

Foreign workers may be eligible for unemployment benefits if:

They lose their job for unavoidable reasons

Their visa allows job changes

They are not self-terminated or visa-expired

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✅ Industrial Accident Compensation Insurance

All foreign workers must be mandatorily enrolled.

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Employment of Foreigners Requires Administrative & Immigration Compliance

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While most working conditions for foreigners are similar to Korean workers,

the differences lie in immigration and administrative requirements.

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✅ What Employers Must Check When Hiring Foreigners

1) Legal Stay Status

Before signing a contract, confirm that the applicant holds a visa that permits employment.

Employers must manage records like alien registration copies and visa expiry dates.

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Hiring undocumented workers may result in legal consequences for the employer.
See: [“How to verify eligible visa types”]

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2) If the Worker Has an E-9 Visa (Employment Permit System)

Must meet industry and headcount restrictions

Employment period is limited (usually 3 years, max 4 years 10 months)

See: [“Checklist for Businesses Hiring Foreign Workers”]

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3) Use Dual-Language Contracts

While Korean-only contracts are legally valid, providing a contract in the worker’s language or English is strongly recommended.

Claims of “I didn’t understand the contract” often disadvantage the employer in disputes.

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Need a Custom Visa or Labor Support Service?

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HanGuk Visa offers personalized services for

: Personal and corporate visa processing, Translation support, Employment and labor-related solutions.

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

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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 :)

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📞 Tel: 02-3210-1113

✉ KakaoTalk Channel: 한국비자

📣 Instagram: @hanguk_visa