With the deepening of globalization, when enterprises expand their business in multiple countries, cross-border labor compliance has become one of the most complex and severe challenges. To help enterprises systematically address this issue, we have collaborated with top labor lawyers from over 50 major jurisdictions worldwide (all recommended by Chambers, The Legal 500, or equivalent institutions) to jointly compile a Chinese-English labor & employment compliance guide exceeding 1 million words, and we will continuously update relevant key points.

This article publishes the key points of labor & employment compliance by September 2025 in South Korea. 

01 Overview of the Labor Law System

1.Legal System

South Korea operates under a civil law system, in which statutes enacted by the National Assembly are the primary source of law. Judicial precedents, while not formally binding, are highly persuasive and consistently followed by lower courts.

2.Resources and Agencies

South Korea’s labor and employment framework is governed by a comprehensive body of statutes enacted by the National Assembly and administered primarily by the Ministry of Employment and Labor (“MOEL”). The key statute is the Labor Standards Act (“LSA”), which establishes minimum conditions of employment including wages, working hours, and termination procedures. The Trade Union and Labor Relations Adjustment Act (“TULRAA”) regulates the formation and activities of trade unions, collective bargaining, and the resolution of industrial disputes.

02 Employment Qualifications and Classification

1.Employment Age

Under the LSA, the minimum age for employment is fifteen (15) years. Individuals below this age may not be employed unless they obtain an employment permit from the MOEL.

As for retirement, South Korea maintains a statutory minimum retirement age of sixty (60).  Therefore, employers may not set a lower mandatory retirement age in employment contracts. Any internal retirement age set below 60 would automatically be deemed to be 60 by operation of law.

2.Qualifications for Foreign Employers

Employment opportunities must be provided without unlawful discrimination. However, certain professions are subject to additional qualification or licensing requirements (e.g., medical, legal, or financial fields).

3.Classification of Employment

Employment in Korea is typically categorized based on the duration of the employment contract.

4.Foreign Workers

The employment of foreign nationals in Korea is primarily regulated under the Immigration Act and the Act on the Employment of Foreign Workers. Employers hiring foreign nationals must ensure that the individual possesses the appropriate visa and work authorization, and foreign workers admitted under the Employment Permit System (EPS) may be employed only in MOEL-designated sectors and require prior employment permission from the MOEL.

03 Recruitment and Employment Contracts

1.Background Examination

Under Korean law, employers’ abilities to conduct background checks on job applicants are heavily restricted due to the stringent privacy protection under the Personal Information Protection Act (PIPA). 

2.Contract Types

For direct hires, there are three (3) types of employment:

• Permanent employment;

• Fixed-term employment;

• Part-time employment.

3.Probationary Period

There are no statutory restrictions on the length of a probationary period, and the customary duration is 3 months to 6 months. Employee terminations during probationary periods still require just-cause, but the standards are slightly relaxed in the case of probationary employees.

04 Working Standards

1.Remuneration

Remuneration in Korea typically consists of a base salary and may also include additional payments regulated by statute or payments in accordance with the employment contract or internal regulations. Such additional payments commonly include compensation for extended work as well as statutory allowances and other variable compensation.

2.Statutory Benefits and Social Security

Regardless of nationality or contract type, employers in Korea are required to enroll all employees in the four mandatory social insurance programs, collectively known as the “Four Major Insurances”. These are:

• National Pension;

• National Health Insurance (NHI);

• Employment Insurance;

• Workers’ Compensation Insurance.

3.Working Hours

Under the LSA, working hours (excluding rest periods) must not exceed eight (8) hours per day or forty (40) hours per week. Any waiting time or preparatory time spent by an employee under the employer’s direction or supervision is generally considered part of working hours, subject to limited exceptions. Through mutual agreement between the employer and the employee, working hours may be extended by up to twelve (12) hours per week, resulting in a maximum of fifty-two (52) total working hours per week.

4.Rest and Leave

Under Korean law, employees who have worked all of their scheduled working days in a given week are entitled to at least one paid weekly holiday. This weekly holiday must be granted regardless of whether the employee is full-time, part-time, or paid hourly, and is separate from statutory public holidays.

In addition to annual leave, the LSA and related statutes provide for various statutory special leaves, including:

• Maternity leave;

• Paternity leave;

• Menstrual leave;

• Childcare leave;

• Family-care leave.

05 Occupational Health and Special Protection

1.Occupational Health and Security

Under Korean law, employers are statutorily responsible to ensure a safe and healthy working environment for their employees. The Occupational Safety and Health Act (the “OSHA”) and its Enforcement Decree establish comprehensive obligations to prevent workplace accidents, occupational diseases, and other health hazards. Employers are required to take all necessary safety measures – appropriate to the nature and risk profile of their business – such as conducting regular risk assessments, providing safety training, establishing and executing occupational health and safety policies, and ensuring proper maintenance of work facilities.

2.Special Protection

Under Korean law, certain categories of employees who may be particularly vulnerable in the workplace are subject to enhanced, specialized protection. Under the LSA and the GEEA, employers must provide special considerations to female employees, minors, and employees engaged in hazardous work.

06 Personal Information and Privacy

In Korea, the Personal Information Protection Act (“PIPA”) primarily governs the protection of employees’ personal information. Employers that collect, use, or retain employee data must do so lawfully, fairly, and for legitimate business purpose. In labor and employment context, personal information may only be collected to the minimum extent necessary for employment management.

07 Anti-Discrimination and Anti-Harassment

1.General Rules

Korean labor law provides enhanced protection to certain categories of employees who are considered vulnerable in the workplace. These include female employees, minors, elderly workers, and persons with disabilities.

2.Protective Characteristics

Female employees are entitled to maternity leave, reduced working hours during pregnancy, and protection from termination during pregnancy and childcare leave. The Act on Prohibition of Age Discrimination in Employment and Promotion of Employment for Older Persons prohibits discrimination based on age in recruitment and promotion. Persons with Disabilities: Under the Act on the Employment Promotion and Vocational Rehabilitation of Persons with Disabilities, employers with fifty (50) or more full-time employees must employ a prescribed ratio of people with disabilities.

08 Internal Policies

1.Applicability

In Korea, it is customary for companies to regulate employment terms through internal policies. Under Korean law, employers with 10 or more employees are required to create a rule of employment and register the ROE with the Ministry of Employment and Labor. The terms of the ROE are legally binding and are generally applicable to all employees working for a company unless otherwise specified in the ROE.

2.Validity

When creating or making changes to the ROE, the company must “hear opinion” from the majority of employees. Failure to satisfy this procedural requirement can render the ROE (or the changes thereto) legally invalid.

3.Whistleblowing

Under Korean law, a company’s internal whistleblowing policy may be set up at the discretion of the company’s management. However, there are specific procedures and rules an employer must comply with in case a report is made by an employee alleging an incident of workplace harassment or workplace sexual harassment.

09 Transactions

1.Employment Relationship

Employment relationship after a business transaction depends on the nature of the transaction in question. If the transaction is recognized as a “business transfer”, all employment relationships of the transferor’s business unit would be transferred to the transferee in whole unless the employee opts out of the employment transfer. In an “asset transfer” scenario, the “Automatic Transfer Rule” does not apply.

2.Compensation

There is no statutory entitlement that arises as a result of an M&A transaction.

10 Termination of Employment

1.Termination Grounds

Under Korean law, an employer is prohibited from terminating an employee without “just cause”. “Just cause” generally refers to a serious, objective reason that makes the continuation of an employment relationship unreasonable. Such grounds may include intentional misconduct, repeated poor performance, violation of company policy, or a legitimate and urgent business necessity.

2.Termination Procedure

An employer is required to provide an employee with at least thirty (30) days’ prior written notice of termination. Where advance notice is not provided, the employer must pay the employee ordinary wages equivalent to at least thirty (30) days in lieu of such notice.

3.Termination Protection

Korean law affords employees robust protection against wrongful termination. An employer may not terminate an employee without “just cause,” and any termination carried out on discriminatory or retaliatory grounds is strictly prohibited. Terminations that contravene substantive or procedural requirements may be challenged as wrongful terminations before the LRC within three (3) months from the effective date of termination.

4.Severance and Compensation

Under the Guarantee of Employees’ Retirement Benefits Act, all employees in Korea who have completed at least one year of continuous service are entitled to statutory severance pay upon retirement, resignation, or termination, regardless of the reason for separation. The minimum severance entitlement is 30 days of average wages for each full year of service.

5.Wrongful Termination

A termination is deemed wrongful if it lacks just cause or fails to comply with the procedural requirements set out in the LSA. An employee who wishes to challenge a termination or other disciplinary action may file a complaint to the LRC within three months from the date of termination.

6.Mass termination and Layoffs

Mass terminations are strictly regulated in Korea. Under Korean law, an employer may implement a collective termination only where there exists an urgent managerial necessity, such as serious financial distress, unavoidable business restructuring, or other compelling economic reasons.

11 Confidentiality, Non-Compete, and Non-Solicitation

1.Confidentiality

There is no statutory obligation requiring employment contracts to include a confidentiality clause, however, it is customary and strongly recommended for employers to include such a clause, especially for employees handling sensitive business information.

2.Non-Compete and Non-Solicitation

Under Korean law, non-compete clauses are enforceable to the extent they are fair and reasonable. Courts evaluate reasonableness on a case-by-case basis, taking into account several factors such as whether the employer has a legitimate business necessity requiring protection, the duration and geographic or industry scope of the restriction, the employee’s responsibilities, and whether the employee receives compensation in return.

12 Work Representation and Trade Unions

1.Work Representation

Employee representatives are not legally required, but some of the statutory schemes require a written agreement with an employee representative (in which case an employee representative must be elected to lawfully implement such measures).

2.Trade Unions

Under the TULRAA, a lawfully-formed unions may negotiate collective agreements covering wages, working hours, and other terms and conditions of employment. Also, unions have the right to engage in industrial, collective actions (including the right to strike), provided legal procedures are followed.

13 Dispute Resolution

1.Procedures & Enforcement

Employment related disputes in Korea are primarily resolved through administrative or judicial mechanisms, depending on the nature of the claim. Under the LSA, an employee who alleges wrongful termination, unpaid wages, or other statutory violations may file a complaint with the LRC of the MOEL.

2.Waiver & Enforcement

Under Korean law, employees cannot legally waive statutory rights, including rights to minimum wage, severance, annual leave, or protection against wrongful termination.

14 Others

1.Latest Development & Trends

The recent enactment of the so-called Yellow Envelope Act (YEA) has quickly become one of the most closely watched developments in Korea’s labor and employment regulatory landscape. It potentially reshapes the basic framework of labor–management relations by redefining the scope of an “employer,” expanding the range of lawful union activity, and limiting employers’ ability to pursue damages against unions.

2.Cultural and Religious Considerations

Korean workplaces tend to place a strong emphasis on hierarchical respect, consensus-building, and seniority-based communication, which can differ from more transactional or efficiency-driven management styles. Decisions are often expected to be made through consultation and gradual consensus.

* To avoid ambiguity, this article should not be regarded as legal advice.

Authors

Shawn Han is a Senior Foreign Attorney and a partner of the Labor & Employment Practice Group at Lee & Ko. His practice focuses on employment-related regulatory compliance, internal investigations, occupational safety and health matters, and other general employment and labor law matters. He has particular experience assisting employers in navigating occupational safety and serious accident–related matters, supporting clients through government investigations and compliance reviews, and advising on preventive compliance frameworks and internal controls.

William Kim is a Senior Foreign Attorney and a partner of the Labor & Employment Practice Group at Lee & Ko. He advises multinational and foreign-invested companies on a broad range of Korean employment and labor law matters, including employment contracts and workplace policies, amendments to work rules, sexual harassment and discrimination investigations, employee discipline and terminations, layoffs and restructurings, wage and hour compliance, statutory leaves, severance, pensions and benefits, non-competition arrangements, employee privacy, and the engagement of temporary or dispatched workers. He also regularly assists clients in navigating complex employment-related disputes and litigation in Korea.

Translator

Jin Dongjie, Master of Laws, associate at Anli Partners. Area of expertise: Labor Law, ESG Compliance, Dispute Resolution.