This step-by-step guide shows you how to get severance pay (퇴직금) in South Korea as an expat.
You’ll learn how to speed up the process as well as:
- What to do if your employer doesn’t want to pay
- Where to file a claim
- What information you need to present
Let’s dive right it in!
Employees are entitled to one month’s salary for every year worked at a company.
- Foreigners should receive severance pay 14 days after completing employment.
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*** Disclaimer ***
This post is not intended as legal advice. Korean Labor Laws change frequently. Consult a lawyer who specializes in Korean Labor Law when in doubt.
In order to qualify for severance pay, you need to:
- have worked one year continuously, personal leaves of absence are subtracted from the total
- be a full-time employee, meaning work an average of over 15 hours in a 4 week period (this can be demonstrated even if your contract says you were an independent contractor)
You don’t need to:
- be Korean, every nationality qualifies for severance pay
- work at the same department, you qualify even if you transfer within a company
- work at a Korean company or one that is governed by Korean labor laws, as long as you’re in Korea, you’re entitled to severance pay
- have a contract, even illegal workers are entitled to severance pay
If you satisfy these requirements, your former employer is legally obligated to pay your severance within 14 days of your resignation. (Failing this can result in imprisonment of up to 3 years or a penalty of up to 20,000,000 KRW)
Unfortunately, more than half of foreign workers don’t know about severance pay.
There are a few hurdles that might confuse you.
I spent two months getting mine, but I could have sped up the process.
This article will simplify the steps to receive severance pay.
How to Calculate Severance Pay in South Korea
An estimate can be calculated as follows:
Daily average wage x 30 (days) x (total days of work/365) for the period you were employed full time.
Make sure to consult a Labor Board representative for the actual number.
Quick Tips for Resigning in South Korea
All good things must come to an end, and you might have to resign from a position in South Korea. Here are a few things to keep in mind to make the process smoother.
- There’s no legal requirement to give your employer a minimum notice (for example, two weeks) before resigning. That being said, your employment contract or company manual might provide a time period. It’s a good idea to give a month notice to avoid any liability and maintain goodwill.
- You need to submit a resignation letter in Korean and English to formally quit.
- Helping your department find, train and onboard your replacement is also advisable.
- Document everything including your tasks and meetings with management.
My Experience Getting Severance Pay in Korea
I worked at a Korean company for five years both part-time and full time. The office environment was demanding, but I gained many skills. My coworkers were fun and professional too.
When it came time to move on, my boss told me that foreigners weren’t entitled to severance pay. This was proven to be false after a conversation with some Korean friends and a quick online search.
I wanted to do things right, so I:
- gave a one month notice
- provided a resignation letter in Korean and English
- helped train my replacement
I didn’t provide a deadline to receive my severance pay, and waited a few weeks to hear back from them. I wanted to be nice and keep bridges unburnt.
Unfortunately, they had more experience not paying severance than I had collecting it.
They were able to drag things out by telling me they’d call me next week and that I should come to the office, etc. I followed along in good faith and deadline after deadline passed.
This was a big mistake once it became clear that they intended to avoid paying me.
Once I figured this out, I got organized.
I jumped through many hoops, including a few trips to the Labor Board (고용노동부 or MOEL), and had the aid of passionate local friends. I finally received my severance after they called my former employer and faxed them an official document.
The total process took a little over two months.
In hindsight, it was worth the effort, but I could have sped things up by at least a month.
Read on to find out how to get your severance with less hassle.
Step 1. Ask Nicely
This is the first step to getting anything done in Korea. Relationships are more important than contracts, and mutual understanding is the key to moving forward.
Avoid getting angry or making accusations.
It might be worth your while to negotiate a lower payment than what you’re owed, if time and energy are limited. For example, you have to leave the country in a few days or have a big expenditure coming up.
Agree on a payment date and amount.
If matters aren’t resolved by an agreed upon deadline, which legally should be 14 days, you’ll need to take the next step.
Step 2. Get your ducks in a row
Fortunately, the law is clearly on your side.
You just need to gather proof.
You’ll need documentation on:
- how many years you worked
- how many hours a week you worked
- how much you were paid each month
- what your duties were and what you accomplished
A simple Excel Spreadsheet will suffice for most of these, but try to get official documents from the company if possible, like your contract.
I highly recommend consulting a lawyer or a local, unless your Korean is perfect and your patience is abundant. There’s no guarantee that your case worker at the Labor Board will speak English.
You can also get help from organizations like the Seoul Foreign Resource Center.
Step 3. File at the Labor Board (고용노동부 or MOEL)
Go to the Labor Board, preferably with some knowledge of Korean or a local friend.
Present your info to a case worker. They will contact the company on your behalf.
Avoid direct contact with your former employer at this point unless instructed by the case worker.
Step 4. Be patient
Don’t expect results overnight. The Labor Board does their best to expedite matters, but getting severance can take a few weeks.
Also, be prepared to hear some counter complaints from your former employer such as:
- you didn’t work hard
- you took extra-long lunches
It helps to avoid getting emotional and just wait things out.
They’ll ask you to sign a letter saying you received severance payment and perhaps a confidentiality clause. I refused to sign anything until they removed this clause, because I wanted to speak freely and help others in the future.
Did we miss anything?
Getting severance pay in South Korea as an expat can be complicated.
Let us know your severance pay tips in the comments below!
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