Korean Employment Rules Required for Companies with 10 or More Employees in Korea

Employment law in Korea is highly regulated and features an employee-protective system, characterized by employee-protective jurisprudence. Companies doing business in Korea must carefully navigate this framework, and one of the most important legal obligations is the preparation, filing, and enforcement of employment rules (취업규칙).

For foreign-invested companies doing business in Korea, this process often requires more than a translation of a global handbook. Korean courts and regulators expect rules that reflect local labor law and practice.

This article provides an overview of what employers need to know. We highly recommend reading other articles here on: Korean Employment & Labor Law.

Korean Rules of Employment: A Practical Guide

Why Employment Rules Matter in Korea

Unlike in some jurisdictions where employee handbooks are optional guidelines, in Korea, employment rules are mandatory for companies with 10 or more employees working in Korea. These rules must be prepared and filed with the Korean Ministry of Employment and Labor (MOEL). Even for smaller businesses doing business in Korea, having well-structured rules can provide clarity, prevent disputes, and demonstrate good faith to Korean labor tribunals and Korean courts. Korean Employment rules often determine the outcome of disputes at Korean labor tribunals and Korean courts for issues related to dismissal, working hours, and disciplinary measures.

The Korean Labor Standards Act

The Korean Labor Standards Act (LSA) is the foundation for labor and employment law in Korea. Article 93 of the LSA requires employers with ten or more employees to establish rules covering specific topics, and Article 94 outlines procedures for employee consultation and filing with the labor office. Key statutory requirements include:

• Working hours, rest periods, and holidays
• Wages, calculation methods, and payment schedules
• Retirement age and termination grounds
• Dismissal procedures
• Disciplinary actions and sanctions
• Health and safety measures

Failure to comply can result in administrative fines, orders to correct, and, in some cases, potential criminal liability for company representatives.

Key Issues Korean Employers Should Consider

1. Dismissal Standards Are Strict

Korean law requires “just cause” for dismissal. Poor performance or downsizing alone may not suffice unless very well-documented. If employment rules do not clearly outline dismissal grounds, employers face heightened litigation risks.

2. Working Hours and Overtime

Korea enforces a 52-hour workweek cap (40 hours regular work + 12 hours of overtime) for most employees. Certain exceptions exist; however, companies must carefully track hours and obtain written consent for overtime work. Employment rules should clearly specify the processes for approving overtime and determining compensation.

3. Disciplinary Actions Must Be Proportionate

Rules should list the types of misconduct and the possible sanctions (e.g., warning, suspension, dismissal). Vague or overly broad provisions are often invalidated by courts. Employers, in most cases, must also follow due process, which includes hearings and providing employee notifications.

4. Amendments Require Employee Involvement

Employers may unilaterally change rules when changes are favorable to employees (e.g., increasing benefits). However, if amendments are unfavorable (e.g., reducing allowances), the employer must either obtain consent from a majority of employees or demonstrate a “reasonable necessity” balanced against the disadvantage to employees.

5. Localization vs. Global Policies

Many foreign companies attempt to impose global codes of conduct or HR handbooks without adapting them to Korean realities and procedures. Korean courts disregard provisions that conflict with local law (e.g., “employment at will” clauses are unenforceable).

Best Practices for Companies in Korea

1. Tailor Rules to Korean Law – Avoid direct translation. Work with counsel to localize your handbook.
2. Consult Employees Early – Consultation reduces resistance and strengthens the validity of unfavorable amendments.
3. Regular Updates – Labor laws change frequently. Recent reforms expanded parental leave, adjusted flexible working systems, and imposed stronger anti-harassment rules.
4. File with MOEL and Make the Employment Rules Accessible – Rules must be filed and disclosed to employees. Many companies post them on the intranet or distribute hard copies.
5. Align with Contracts – Individual employment contracts should be consistent with the employment rules. In case of conflict, rules usually prevail.

Enforcement and Employment Law Litigation Trends

Recent Korean court decisions show a clear pattern:

• Dismissals overturned due to vague rules or lack of documented misconduct.
• Overtime claims are upheld when companies fail to track working hours properly.
• Unlawful amendments were struck down when employers failed to provide sufficient justification for the change.

In short, employment rules are not “paper compliance.” They must be carefully drafted, consistently enforced, and regularly reviewed. For companies doing business in Korea, employment rules are both a legal obligation and a strategic tool. Well-drafted rules minimize risk, protect the company, and foster workplace stability. Poorly prepared or outdated rules, on the other hand, can create significant liability.

Employers should treat the process seriously, seek professional guidance, and ensure their rules evolve with Korea’s fast-changing labor environment.

Frequently Asked Questions (Q&A) on Employment Rules in Korea

Q1: When must a company in Korea prepare employment rules?

A1: Companies with 10 or more employees are legally obligated under Article 93 of the Korean Labor Standards Act to prepare and file employment rules with the local Korean Ministry of Employment and Labor office. Smaller companies are not legally required to do so, but they should still adopt employment rules to reduce legal risk.

Q2: What happens if we don’t file employment rules in Korea?

A2: Failure to prepare and file rules when required can result in administrative fines and orders to correct. More importantly, in the event of a dispute, the absence of clear rules makes it difficult for the company to defend its position in court or before labor authorities.

Q3: Can we simply translate our global employee handbook into Korean?

A3: No. A direct translation almost always creates problems. Provisions standard in other jurisdictions (e.g., “employment at will” or broad non-compete restrictions) are unenforceable in Korea. Instead, global policies should be localized to comply with Korean law.

Q4: Do employees in Korea have to agree to the rules?

A4: Not always. If the rules are more favorable to employees, consent is not required. However, if the rules are less favorable, the company must either obtain consent from a majority of employees or demonstrate “reasonable necessity” balanced against employee disadvantage. Without this, the changes may be invalid.

Q5: What topics should be covered in Korean employment rules?

A5: At minimum, rules must cover working hours, rest periods, wages, dismissal, retirement, disciplinary procedures, and safety. Best practice is to also include:

• Harassment and anti-discrimination policies
• Confidentiality and data protection rules
• Leave entitlements (sick leave, maternity/paternity leave, childcare leave)
• Remote work/flexible working arrangements
• Grievance procedures

Q6: How often should we review or update our Korean employment rules?

A6: IPG Legal recommends a review at least once every 2–3 years or whenever there are significant labor law reforms. For example, recent changes in Korea regarding parental leave, flexible work arrangements, and workplace harassment have prompted employers to revise their rules.

Q7: What is the role of the Ministry of Employment and Labor (MOEL)?

A7: The MOEL reviews employment rules upon filing. While they do not pre-approve every detail, they may order revisions if the rules conflict with the Labor Standards Act of Korea or are otherwise unlawful. They also have the authority to conduct workplace inspections and audits.

Q8: How are disciplinary rules enforced?

A8: Korean courts require disciplinary measures to be proportionate, specific, and procedurally fair. Employers must conduct hearings, document the grounds for discipline, and follow the procedures outlined in the rules. Overly vague or broad disciplinary provisions are often struck down.

IPG Legal Law Firm Support for Companies Doing Business in Korea

Our team includes attorneys and retired judges with decades of experience in Korean labor law, and we understand the cultural and legal sensitivities that often complicate employment matters.

At IPG Legal, we routinely assist foreign capital-invested companies with:

• Conducting HR audits and investigations
• Drafting employment rules from scratch
• Reviewing global HR policies for local compliance
• Advising on amendments and employee consultations
• Filing with MOEL and responding to labor office inspections
• Representing employers in labor disputes and wrongful dismissal claims
• Conducting HR Audits and Investigations.

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,  IPG Legal is consistently ranked a Top Dispute Resolution Law Firm for our litigation, arbitration, and mediation services, and IPG Legal is consistently rated a top-tier law firm in corporate law, litigation, arbitration, franchise law, distribution law, estate law, family law, employment & labor law, and criminal defense.

Sean’s profile may be found at: Sean C. Hayes. To schedule a call with Sean Hayes, please click: Schedule a Call with Sean Hayes.