TITLE : FAQ on FDI in Korea 2023 (Q166~Q169)
페이지 정보
본문
■ FAQ on FDI in Korea 2023 (Q166~Q169)
Labor
Q166 | Is payment of retirement allowance mandatory for an employee that is leaving the company? |
In accordance with Article 34 of the Labor StandardsAct and Article 4 of the Act on Guarantee of RetirementAllowance to Employees, when an employee retiresafter working for at least a period of one year, retirementallowance pertaining to the average wage of at least 30days must be paid for one year of continuous service. Thereare no restrictions to the reason for retirement, and theretirement allowance must be paid in all cases in which thelabor contract is terminated, such as when the employeeresigns, dies, reaches the retirement age, is dismissedupon disciplinary action, or the company ceases to exist.However, when an employee's continuous service period isless than one year, or when an employee’s weekly averagework hours for four weeks is less than 15 hours, retirementallowance need not be paid.
- The retirement allowance system was adopted on Dec. 1, 2005. Allemployers must adopt the retirement allowance or retirement pensionsystem. When an employee has retired, the employer shall pay aretirement allowance within 14 days from the day that the cause ofthe payment has occurred. Under special circumstances, the paymentdeadline can be extended upon discussion among the parties concerned.
Q167 | Are newly established foreign-invested companies obligated to hire Korean employees? |
There are no provisions under labor laws that stipulate that itis mandatory for foreign-invested companies to hire Koreanemployees. However, when it comes to visa issuance for hiringforeign professionals, the number of Korean employees couldbe an important benchmark. When issuing an E-7 (SpecificActivity) visa, the number of recipients can be restricted towithin 20% of the number of Korean employees. In order tohire foreign professionals, it is advised to check the specificvisa-related matters in advance with the immigration office.
Q168 | When due to poor sales and financial difficulty, a business shuts down temporarily, does shutdown allowance still have to be paid? |
A temporary shutdown means that even though an employeewishes to provide labor as per the labor contract, such aprovision of labor is not possible or the employer refusesto receive service. According to Article 46 of the LaborStandards Act, when a business shuts down due to a causeattributable to the employer, he/she shall pay the employeesconcerned allowances of not less than 70% of their averagewages during the period of shutdown. If that amountexceeds the amount of ordinary wage, ordinary wage can bepaid as shutdown allowance.
- A cause attributable to the employer can be considered as a businessdisruption that is caused within the scope of the authority of theemployer. Therefore, although each matter requires careful individualjudgment, 1) poor sales and financial difficulty; 2) lack of raw materials; 3)transfer of factory; 4) market recession and production volume reduction,etc. have been recognized as causes attributable to the employer.
Q169 | Are there data on the wage levels and other measures of comparison regarding the executives or employees of foreign-invested companies? |
Data on wages are considered sensitive and confidential,so it is hard to access data on the wages the employees offoreign-invested companies. However, some consultingcompanies or head-hunting companies might have theirown comparative data on such wages. Also, the Ministryof Employment provides statistical data on labor andemployment through its website (laborstat.moel.go.kr)where users can access information on the wages of Koreaclassified by industry, size of business, type of employment,business type, etc.