What Do You Need To Know About Severance Pay in South Korea?

Korean Severance pay (retirement pay) is the compensation that an employee in Korea is entitled to receive from his employer doing business in Korea once the employment has ended. Under the Korean Employee Retirement Benefit Security Act, a regular full-time employee in South Korea shall receive severance pay within 14 days from termination of employment. The amount of severance pay is equal to the employee’s one month salary for every year of consecutive service. For similar articles, you may read:

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Statutory Severance Obligations in Korea after Acquisition of Company in Korea

Korean employers have attempted, in many cases unsuccessfully, through mergers, to reduce the statutory severance obligations of a company through a company acquiring another company with a workforce with large outstanding severance obligations. The acquired company, in most cases, is strapped with debt and an inefficient workforce. Prior to a merger, please check the statutory severance obligations and other liabilities even if the merger is a mere “asset” merger, since Korea is proactive on obligations it feels are owed to

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