An employer of record in South Korea employs your hire through a local entity, issues a Labor Standards Act compliant contract, runs payroll and the four social insurance enrolments, and carries the employer obligations of one of the most employee-protective systems in Asia. Korea is not a market where employment ends casually: dismissal requires just cause, notice is statutory, and severance accrues for every employee who passes a year of service, so the exit cost belongs in the plan from the first payslip.
What an EOR does in Korea
The provider's Korean entity signs the employment contract, pays salary in won, withholds income tax, enrols the employee in the social insurance schemes and administers statutory leave and working time rules. The buyer directs the work; the EOR is the legal employer bound by the Labor Standards Act and related statutes. That split matters more in Korea than in permissive jurisdictions, because the Act's protections attach to the employment relationship regardless of what a service agreement says, and an EOR that treats a Korean hire like a US at-will employee is building a dispute, not a workforce. The minimum wage for 2026 is KRW 10,320 per hour, roughly KRW 2,157,000 per month for full-time work.
Dismissal needs just cause, notice and paper
Korean law permits dismissal only for justifiable cause, a standard courts set high: conduct making continued employment untenable, such as serious violations, criminal conviction or resume falsification; employers with fewer than five employees are exempt from the just-cause requirement. Procedure is load-bearing: written notice stating the grounds and effective date is required, and at least 30 days advance notice or 30 days of ordinary wages in lieu. Redundancy is harder still, requiring urgent managerial necessity, attempts at alternatives, fair selection criteria and consultation with employee representatives at least 50 days ahead. An invalid termination can end in reinstatement with back pay, which is why a Korean EOR's offboarding process is worth examining before you ever need it.
Severance, hours and leave are statutory accruals
Every employee with at least one year of continuous service is entitled to statutory severance of 30 days of average wages per year of service, calculated on recent pay and settled within 14 days of the final working day unless another date is agreed. Working time is capped at 40 standard hours plus up to 12 overtime hours per week, the 52-hour system, with overtime, night and holiday work paid at one and a half times the regular rate. Paid annual leave starts at 15 days after a year of service and grows with tenure to a ceiling of 25 days. These are not benefits a contract grants; they are floors a contract cannot undercut, and a monthly EOR price that ignores the severance accrual is understating the cost of every Korean employment by design.
What to check in a Korean EOR quote
Ask whether severance is accrued monthly on the invoice or billed at exit, and on what wage base, since average-wage calculations include more than base salary. Ask how the provider tracks the 52-hour ceiling and approves overtime, because the cap is enforced against the employer. Ask how the four social insurances are enrolled and evidenced, and how the provider would run a termination: grounds documentation, the 30-day notice or payment, and severance settlement within the statutory window. Statute and the employment contract control; this page describes the mechanism and is not legal advice.
Questions people ask about employer of record south korea
Can a Korean employee be dismissed at will?
No. Dismissal requires justifiable cause under the Labor Standards Act, with written notice of grounds, and 30 days advance notice or 30 days of ordinary wages in lieu. Employers with fewer than five employees are exempt from the just-cause standard, but procedure still matters.
How does severance work in South Korea?
Employees with at least one year of continuous service receive 30 days of average wages per year of service, settled within 14 days of leaving unless another date is agreed. It applies on resignation as well as termination, so it accrues as a real liability.
What are the working time limits in Korea?
A 40-hour standard week plus a maximum of 12 overtime hours, the 52-hour system, with overtime, night and holiday hours paid at one and a half times the regular rate.
How much annual leave do Korean employees get?
Fifteen days of paid leave after one full year of service, rising with tenure to a maximum of 25 days. Leave administration is one of the statutory duties the EOR carries as legal employer.