In South Korea, the lifecycle of an employee—from hiring to resignation—is strictly monitored by various government agencies. Each change in employment status triggers a series of mandatory reporting and financial settlement duties. Managing these "entry and exit" procedures accurately is essential to avoid legal disputes and administrative fines.
01.Onboarding: Social Insurance Enrollment
When a new employee joins your company, their "acquisition of qualification" for the four major social insurances must be reported promptly.
Strict Deadlines: These reports must generally be filed within the first 14 days or by the 15th of the following month, depending on the type of insurance.
Accuracy of Information: Reporting the correct starting salary and employee details is vital, as this forms the basis for their future premiums and tax withholdings.
02.Offboarding: Settlement and Loss of Qualification
When an employee leaves the company, the "exit" process is even more complex than the hiring process.
Final Settlement: You must perform a final settlement of health insurance and unemployment insurance premiums to account for the difference between the estimated premiums paid and the actual income earned up to the last day of work.
Reporting Termination: The "loss of qualification" must be reported to all four insurance agencies to stop the company's billing obligations.
03.Statutory Severance Pay (Toejik-geum)
Perhaps the most critical aspect of offboarding in South Korea is the Statutory Severance Pay.
The One-Year Rule: Employees who have worked for more than one year (with an average of 15+ hours per week) are legally entitled to severance pay upon leaving, regardless of the reason for resignation.
Complex Calculation: The amount is calculated based on "Average Wage" (the average of the last three months of salary plus a portion of annual bonuses). Errors in this calculation are a primary cause of labor office complaints.
Payment Deadline: By law, all payments, including the final salary and severance pay, must be settled within 14 days of the termination date unless a prior agreement is made.
04.Our Comprehensive Support
The paperwork that follows each arrival and departure is a steady administrative load for a foreign manager. We take the filing side of it — not the employment decisions themselves, which sit with you and, where they get contentious, with a certified labour attorney:
Entry/Exit Filing: We handle all the "acquisition" and "loss of qualification" reports for social insurance agencies on your behalf.
Severance Calculation: We provide precise calculations for statutory severance pay, ensuring compliance with the Labor Standards Act and preventing future disputes.
Settlement Ledger: We prepare a final settlement ledger for resigning employees, detailing the final salary, tax adjustments, and severance amounts.
Summary
The administrative burden around each arrival and departure in South Korea is high, and the legal stakes are higher still. Handing the filing side to us keeps those "entry and exit" procedures accurate and on time, which is where most avoidable exposure to labour disputes comes from.
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