What should an employment contract in South Korea include?
An employment contract in South Korea should encompass the following information:
- Names and contact information of the employer and employee.
- Employee’s job title, duties, and responsibilities.
- Specified working hours and work schedule.
- Agreed salary, allowances, overtime pay, bonuses, and payment method.
- Leave entitlements, including annual leave, public holidays, and statutory leave.
- Workplace location and conditions related to travel or relocation.
- Contract duration for fixed-term agreements or confirmation of indefinite employment.
- Probationary period details, if applicable.
- Termination provisions, notice requirements, and severance conditions.
- Mutual agreements on confidentiality, workplace policies, or non-compete obligations where applicable.
Under the Labor Standards Act (LSA), employers must provide employees with written or electronic employment contracts that clearly outline statutory employment terms. This requirement helps ensure legal compliance, transparency, and protection of employee rights. Both the employer and employee should carefully review the agreement before signing.
What types of employment contracts exist in South Korea?
There are various categories into which employment contracts in South Korea can be classified.
1. Regular (permanent) employment contract
Regular employment contracts are the most common form of employment agreement in South Korea. These contracts are indefinite-term agreements with no predetermined end date and provide employees with full statutory protections under the Labor Standards Act.
Employers must clearly outline employment terms such as wages, working hours, leave entitlements, and job responsibilities. Termination of regular employees is strictly regulated and generally requires a justifiable reason, advance notice, and severance pay in accordance with South Korean labour laws.
2. Fixed-term contract
Fixed-term contracts are used for temporary, seasonal, or project-based work. These agreements specify a clear start and end date and can generally last for a maximum of two years unless exemptions apply under the law.
If a fixed-term employee continues working beyond the legal limit, the contract may automatically convert into a regular employment contract. Fixed-term employees are also entitled to equal treatment and statutory protections similar to permanent employees.
3. Part-time contract
Part-time contracts apply to employees who work fewer hours than full-time workers. Employers are required to provide wages, benefits, and protections proportionate to the employee’s working hours.
South Korean labour law prohibits discrimination against part-time employees regarding wages, working conditions, and benefits when compared to full-time employees performing similar work.
4. Dispatched worker contract
A dispatched worker contract involves an employee being hired by a dispatch agency while performing work for a third-party client company. These arrangements are regulated under the Protection of Dispatched Workers Act.
Dispatch assignments are generally limited to two years. If the employment relationship exceeds this period, the client company may be required to hire the worker directly. Dispatched workers must also receive equal treatment in terms of wages and working conditions.
5. Probationary employment arrangement
Probationary arrangements are commonly incorporated into regular or fixed-term employment contracts to assess an employee’s suitability for the role.
Even during probation, employees remain protected under the Labor Standards Act, including safeguards against unfair dismissal. Employers should clearly define the probationary period, evaluation criteria, and applicable employment conditions within the contract.
How to hire employees in South Korea?
Typically, when hiring workers in South Korea, it’s necessary to establish a legal entity within the country. This involves registering your business with the relevant South Korean authorities and complying with local labour, tax, payroll, and social security regulations.
Employers must also ensure that employment contracts comply with the LabourLabor Standards Act and other applicable employment laws, including requirements related to wages, working hours, leave entitlements, and employee protections.
However, with Native Teams’ employer of record services, you can focus on growing your business while we handle compliant hiring, payroll, and employment management in South Korea and many other countries worldwide.
