South Korea Employment Contracts

South Korea Contracts

Internationally minded companies hiring employees in South Korea must operate within a strict framework of legislation.

Most aspects of employment law are covered by the South Korea Constitution and the Labor Standards Act (LSA), supplemented by Collective Bargaining Agreements (CBAs) and Rules of Employment (ROEs).

These considerations come into play during the first stages of hiring, onboarding, and drawing up contracts with your new employees. Once Bradford Jacobs’ Professional Employer Organization (PEO) recruitment networks have located the best talent for your company, we step in to steer you through this crucial element of recruitment.

General requirements applying to all contracts include:

• The LSA stipulates employers should have a written agreement with employees detailing such as working conditions and hours, wages and payment schedule, paid days off and paid vacations, benefits including sick leave entitlement, location of job and working conditions. Any agreements that do not comply with LSA minimums are invalid
• The usual contract is indefinite or open-ended, known as ‘regular’ contracts
• Fixed-term contracts cannot exceed two years, or they become indefinite
• Part-time and fixed-term employees are entitled to the same rights as full-time employees
• The contract does not have to be in Korean, although this is recommended for local employees
• There are no statutory requirements regarding probation periods, which generally are for three to six months

In addition to individual contracts, employees must also apply workplace polices in the form of Rules of Employment.

• ROEs are mandatory in companies employing more than 10, and publish details of working conditions, health and safety, disciplinary procedures, processes for dealing with harassment or discrimination and retirement arrangements
• Most workplaces must comply with requirements of the Occupational Health and Safety Act (OHSA)
• ROEs must be filed with the Ministry of Employment and Labor

Employment Contracts in South Korea

The Labor Standards Act stipulates employers should provide written agreements for workers detailing the essential elements of employment, such as working conditions and hours, wages and payment schedule, paid days off and paid vacations, benefits including sick leave entitlement, location of job and working conditions. Any agreements that do not comply with LSA regulations are invalid.

Main contract types include:

Open-ended, Indefinite, ‘Regular’ Employment Contracts:  The most common type of contract or agreement, which generally end by termination according to employment law or by retirement.

Fixed-term Employment Contracts: Allowed for a maximum of two years, including renewals. If employment continues after this, they become open-ended. Exceptions include where a specific task is the reason for the fixed-term contract, or where a full-time member of staff is substituted for a specific time by the fixed-term employee. Employers cannot discriminate against fixed-term employees in terms of pay or working conditions in comparison with those on regular, open-ended contracts.

Part-time and Temporary Employment Contracts: Under the Labor Standards Act, employers cannot discriminate against part-time employees in terms of pay or working conditions in comparison with those on regular, open-ended contracts.

Collective Bargaining Agreements (CBAs): These generally cover only union members in a company, which means employment conditions can vary between union and non-union members. However, under the Trade Union and Labor Relations Adjustment Act, all workers in each company come under the CBA if the majority of workers are union members. All workers will also be covered by the CBA if general working conditions are worse than those covered by the CBA.

Companies with 10 or more employees must display Rules of Employment (ROEs), detailing such as scales of pay and payment schedule, health and safety and measures against harassment and discrimination in the workplace. ROEs must be filed with the Ministry of Employment and Labor.