Under the Korean Labor Standards Act (LSA), companies employing ten or more workers in Korea must prepare and file “rules of employment” (근로규칙) with the Korean Ministry of Employment and Labor. These internal regulations set out the basic working conditions, procedures, and policies that govern the employment relationship between the employer and employee. Even smaller employers are encouraged to adopt written rules, as they serve to prevent disputes and promote transparency. For additional articles on Korean Labor & Employment Law, see: IPG Legal’s Labor Law Archive.
When drafting or updating employment rules in Korea, the following core categories and items should be addressed. Some are legally mandatory; others are recommended for clarity, compliance, and sound human-resources management.
If you are revising or implementing employment rules, it is also advisable to update employment agreements, your HR Compliance System, and related forms. We advise retaining a proactive attorney in Korea to assist with this matter. In most cases, the basic form template sold by some Korean law firms is not adequate for most companies.
| Section | Key Considerations |
|---|---|
| Working hours, rest, breaks, and shift work | Define normal working hours, start and end times, rest periods, lunch breaks, and rules on shift work, flexible scheduling, night work, and rest between shifts. |
| Overtime, holiday, and night work | Specify conditions for performing overtime, weekly or holiday work, and night work; include limits, employee consent procedures, and premium-wage rates in accordance with statutory caps (generally a 52-hour weekly ceiling). |
| Holidays and leave | List statutory holidays and the procedure for granting annual paid leave, sick leave, maternity/paternity leave, and special leaves (e.g., bereavement or marriage). Describe specifically how employees apply for and record leave, and supplement the rules with forms and an internal leave reporting system. |
| Wages, calculation of wages and payment terms | Detail how wages are calculated and paid: base salary, allowances, bonuses, overtime premiums, pay periods, paydays, payment methods, deductions, and timing of wage adjustments. |
| Retirement, severance, and benefits | Set any retirement age, severance-pay eligibility, calculation method, and payment procedures. Include participation in statutory pension and social-insurance schemes. |
| Probationary period | State duration and evaluation criteria, clarify rights and obligations during probation, and explain conversion to regular employment. Ensure consistency with the LSA’s restrictions on dismissal. |
| Employment contracts / types of employment | Define categories of workers (permanent, fixed-term, part-time, dispatched, or project-based) and the rules for renewal, transfer, or termination of such contracts. |
| Dismissal, and disciplinary measures | Outline just causes for disciplinary action or termination, procedures for investigation and notice, employee hearings or appeals, and notice or pay-in-lieu requirements. Emphasize compliance with “just cause” and advance-notice provisions. |
| Equal treatment and non-discrimination | Prohibit discrimination based on gender, age, disability, region, nationality, religion, or union activity etc. Reaffirm equal pay for equal work in line with the Korean Equal Employment Opportunity and Work-Family Balance Assistance Act of Korea. |
| Occupational safety and health | Include workplace safety standards, accident-reporting procedures, employee obligations to follow safety rules, and emergency response guidelines. |
| Social-insurance and welfare programs | Insert clauses on confidentiality, handling of business secrets, ownership of intellectual property created in employment, and—where permissible—reasonable post-employment non-compete restrictions. |
| Training, performance evaluation, and promotion | Describe training opportunities, performance-review cycles, promotion and transfer policies, and criteria for career advancement. |
| Confidentiality and intellectual-property protection | Insert clauses on confidentiality, handling of business secrets, and ownership of intellectual property created in employment. |
| Employment Rules Amendment procedures | Explain how the rules can be amended, including consultation with employees or their representatives, required government filings, and the effective date of changes. |
| Miscellaneous policies and benefits | Summarize other internal standards such as travel and meal allowances, company-vehicle use, expense reimbursement, dress code, telework policies, and disciplinary processes for minor infractions. |
Practical Guidance
- The rules must meet or exceed statutory minimums; any provision less favorable to employees than the Korean Labor Standards Act is void.
- Once established, the rules should be filed with the local Labor Office and made accessible to all employees, typically by posting them on a company intranet or bulletin board.
- Any amendment that disadvantages employees requires, in most cases, consultation and a written opinion from the employee representative before filing.
- Employers should review and update the rules periodically, especially when laws change (e.g., recent reforms to working-hour flexibility or union protections).
by Sean Hayes
Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only a few non-Korean lawyers as a Top Attorney by AsiaLaw. Sean is regularly quoted by leading international media sources, including the Wall Street Journal, New York Times, France 24, and Bloomberg.
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