Severance Pay in Korea: A Guide for Foreign Workers

What is Severance Pay?

Severance pay (퇴직금, toe-jik-geum) is a payment made by an employer to an employee upon termination of employment. It is a mandatory benefit under Korean labor law for eligible workers.

It is designed to provide financial support to workers after they leave a job, recognizing their long-term service to a company.

Who is Generally Eligible for Severance Pay?

Start with the general statutory checks, but do not treat this short list as an eligibility decision.

Continuous service generally must reach at least one year.

The Act has an exclusion tied to average scheduled weekly hours below 15. Changing schedules can require a more detailed period-by-period review.

The reason employment ends is not the only question. Confirm service, hours, worker status, employer records, and any special facts.

Are Foreign Workers Eligible?

Yes, foreign workers in Korea are generally eligible for severance pay under the same conditions as Korean workers. The 'Employee Retirement Benefit Security Act' applies to most employees, including foreign nationals.

Some foreign-employment programs may involve separate insurance or payment arrangements. Do not assume those labels or amounts are the statutory severance calculation; confirm them through the responsible official channel.

It is important to understand that eligibility depends on your specific employment situation and not solely on your nationality or visa type.

Key Factors Affecting Eligibility

Continuous service: review the full period with the responsible employer, including renewals, breaks, leave, and workplace changes.

Worker status: the label on a contract does not by itself decide whether the statutory worker rules apply.

Scheduled weekly hours: preserve schedules across the whole service period because fluctuating hours can require a more detailed calculation.

What to Check Before You Leave

Before you leave your job or Korea, gather all documents related to your employment. This includes your employment contract, any contract renewal documents, pay stubs, and records of your working hours.

Review these documents to confirm your start and end dates of employment and your average weekly working hours.

If eligibility or the calculation is uncertain, use the Ministry of Employment and Labor's official Labor Portal or counseling channel with your records.

What to do step by step

1. Understand the general eligibility rules for severance pay in Korea.
2. Review your employment contract and any renewal agreements.
3. Confirm your exact start and end dates of employment.
4. Calculate your average weekly working hours throughout your employment.
5. Gather all pay stubs and work records as evidence.
6. If you have questions, seek official guidance from the Ministry of Employment and Labor with your records.

What this guide assumes

• You are a foreign worker in Korea who is ending or has recently ended employment.
• You want to understand the general framework for severance pay.
• You have access to your employment documents.

Example

David, an E-7 visa holder, worked for a Korean company for 2 years and 3 months as a full-time employee. He consistently worked more than 40 hours per week. When his contract ended, he reviewed his employment contract and pay slips to confirm his start and end dates and his work hours, preparing to discuss severance with his employer.

Limits and cautions

• This guide provides general information only and cannot determine your individual eligibility for severance pay.
• It does not provide specific legal advice or guarantee any outcome regarding severance claims.
• It does not determine how a separate foreign-employment insurance or payment arrangement interacts with statutory severance.
• It cannot calculate the exact amount of severance pay you may be owed.

Frequently asked questions