Employers must create a labor contract and provide a copy to the employee. Since 2021, it is possible to issue a labor contract in electronic form. A labor contract must be provided to all workers who provide labor, regardless of their employment status, including full-time, part-time, and temporary workers. If you do not create a labor contract, you may be fined up to 5 million won.
The labor contract must include the following information:
- Composition of wages: basic salary, allowances, and meal allowances.
- Calculation of wages: how wages are calculated for each period.
- Payment method: when and how wages are paid.
- Working hours: the agreed-upon hours for the employee to work.
- Holidays: Sunday is the usual holiday for workers who work from Monday to Friday. If you work on other days, you can choose an appropriate day as your holiday.
- Annual leave: 15 days of paid leave can be granted each year, increasing by one day every year to a total of 25 days. The annual leave system applies to workplaces with five or more employees.
- Workplace and job description: not mandatory but recommended. The location and duties of the worker can be specified.
- Rules set by employment regulations: including personnel regulations, company regulations, internal rules, and collective agreements.
- Rules set by dormitory regulations (if applicable): regulations regarding the use of dormitories.
Before signing a labor contract, employees should check whether the contract reflects the legal requirements. If the requirements are not met, the employee may request modifications or additions to the contract. Employers who refuse to comply may be fined up to 5 million won. If the employment rules change after the labor contract is signed, the employee may request an updated contract.
The most important aspect of the labor contract is the comprehensive wage, which includes legal allowances in the annual salary. The Ministry of Employment and Labor has launched a crackdown on comprehensive wages and fixed overtime abuse since the end of 2022 to eliminate free overtime work, violation of extended working hours, and non-payment of overtime pay.
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