Your Korean Employment Contract: What to Check

The contract matters twice for a foreign employee. It sets your pay, and it sits underneath your status of stay — which is why a clause a Korean colleague would shrug at is not one you can shrug at.

Three things in it are misread more than everything else combined: probation, the two-year rule, and the difference between signing a contract and receiving one.

Read it as a status document that happens to state a salary.

Nationality is not one of the terms

Article 6 of the Labor Standards Act prohibits discriminatory treatment of working conditions on grounds of nationality, religion or social status.

So the Act’s protections do not arrive in a reduced form because the employee is foreign, and a contract cannot be worse because of who signed it. Everything below applies to an E-7 holder on the same footing as the person at the next desk.

Signing is not receiving

Article 17 requires the employer to specify the key terms and to deliver them to the employee in writing — wages and how they are composed and paid, contractual working hours, holidays, and annual paid leave.

An electronic document satisfies it. A signed contract sitting in the company’s filing cabinet does not.

The obligation is backed by a criminal fine of up to ₩5,000,000 — the written-delivery penalty. That figure is the reason to ask rather than let it go.

A clause below the statute simply fails

Article 15 is the most useful thing in the Act for someone reading a contract they have already signed: terms that fall below the standards the Act sets are void as to that part, and the statutory standard applies in their place.

Two consequences people miss:

Which reframes the whole exercise. You are not reading the contract to catch everything before signing — you are reading it to know which clauses are real.

Probation: the correction that is worth money

Almost every English-language explanation of Korean probation says it is limited to three months. That sentence is a collapsed version of something else.

What the three months limits is the special rule under Article 5 of the Minimum Wage Act: the probation reduction period.

At the 2026 minimum wage of ₩10,320 an hour, the reduction floor is:

minimum wage             ₩10,320 / hour
× 90%                     ₩9,288 / hour
applies for at most       3 months of probation

Probation dismissal is easier, not free

There is a real difference during probation, and it is narrower than it sounds: the advance-notice requirement in Article 26 does not apply to an employee who has been continuously employed for less than three months.

Everything else stays:

• dismissal still requires a justifiable reason
• for probation, that reason is normally the evaluation — which means there has to have been one, against criteria you were told about
• Article 27 still requires the grounds and the date in writing

A dismissal delivered verbally or by message, with no evaluation behind it, is not made lawful by the word “probation” appearing in your contract.

Fixed term: two years, and the exception that catches E-7

The rule is that a fixed-term employee may not be used beyond two years, and that continuing past it is treated as a contract without a fixed term — the fixed-term two-year rule.

The exceptions are where the general article stops being true for this audience. Longer engagement is allowed for, among others:

So “two years and I convert” is not a plan. If your renewal matters to your status, the question to ask is which basis the company thinks it is hiring you on.

The money clauses, in the order they cause trouble

Gross or net. A salary figure means nothing until the contract says which. Deductions on a Korean payslip are substantial and split across several bases — reading your Korean payslip is the line-by-line version. A “net salary” arrangement also has tax consequences of its own, so it should be stated explicitly rather than assumed from the number sounding low.

Fixed overtime built into the salary. Where a contract folds a set number of overtime hours into the monthly figure, the hours it covers should be identifiable. If they are not written down, nobody can tell whether the hours you actually worked exceeded them — and the difference is payable.

Bonuses. Fixed and paid on set dates, or discretionary. The distinction decides whether it is part of your pay or a gift, and it should be on the page, not in a conversation.

Severance. Statutory severance requires one year or more of continuous service and an average of 15 hours or more a week over four weeks. A clause dividing severance into your monthly salary is not a way of paying it early — the entitlement arises on the terms the statute sets.

Clauses that do not survive contact with the Act

Penalty and predetermined damages. Article 20 prohibits an agreement fixing a penalty or a predetermined amount of damages for breach. A round number attached to leaving early is the thing the article exists to stop. An agreement to reimburse identifiable costs the employer actually paid — a named training course, with real invoices — is a different construction and can hold, depending on how it is framed and how long it binds you.

Non-compete. Not automatically void and not automatically enforceable. Validity is judged on the whole picture: whether there is a genuine interest to protect, your position and access, the duration, the geographic and sector scope, and whether anything was paid for the restriction. A clause barring you from the entire industry nationwide, indefinitely, with no compensation, is the weak end of that range.

Language. Where both a Korean and an English version exist, one of them governs — and it is often the Korean one. If the contract does not say, that is itself a question to ask, because the version you negotiated may not be the version that decides a dispute.

Termination, from the other side

A dismissal that fails the written-notice requirement is not merely impolite. It is the point at which the process itself is defective, which is worth knowing before you agree that leaving was your idea.

The order to read it in

who the parties are, and the contract period
  → is it fixed-term, and on what basis
  → gross or net, and what the figure includes
  → fixed overtime hours, if any, and whether they are stated
  → probation: length, and what exactly is reduced
  → bonus: fixed or discretionary
  → severance and annual leave
  → penalty, training-cost and non-compete clauses
  → which language version governs
  → and last: did they actually hand you a copy

The employer-side view of the same relationship — what the four insurances cost and when they must be filed — is in registering an employee for the four insurances, and what the pay ends up taxed at is in income tax for foreigners: resident or not.

For anything specific to your own contract, the Ministry of Employment and Labor’s counselling line is 1350, and it operates in several languages. A clause you are unsure about is cheaper to ask about now than to litigate after you have relied on it.