We Resolve Legal Matters
How can we assist you?
Blogs
More-
How Foreign Workers Can Receive Severance Pay and Strategic response
Can Foreign Workers Receive Severance Pay? Retirement benefits are governed by Article 8(1) of the Act on the Guarantee of Employees’ Retirement Benefits. The Supreme Court has held that foreign workers are equally subject to the provisions of the Labor Standards Act regarding severance pay and the Minimum Wage Act regarding wage guarantees (Supreme Court Decision 2006Da53627, Dec. 7, 2006). Therefore, foreign workers are entitled to severance pay under the same standards as Korean nationals if the following conditions are met: Continuous employment of at least one year Average weekly prescribed working hours of at least 15 hours over a four-week period Qualification as a “worker” under the Labor Standards Act Regardless of visa type—such as E-9 (non-professional employment), E-7 (specific activities), or F-series visas—if the individual worked under the direction and supervision of an employer, severance pay entitlement applies. Despite this, some employers argue that “foreigners are excluded” or “fixed-term contract workers are not entitled.” In most cases, such claims lack legal basis. Severance pay for foreign workers is not optional; it is a mandatory statutory right that cannot be arbitrarily excluded. Common Disputes Involving Foreign Workers’ Severance Pay In practice, the following dispute types frequently arise: 1. Non-payment after departure from Korea A worker’s departure from Korea does not eliminate the employer’s obligation to pay severance. Under Article 9(1) of the Act on the Guarantee of Employees’ Retirement Benefits, an employer must pay severance within 14 days from the date the cause for payment arises. Violation may result in criminal penalties (Article 44(1)). 2. Settlement disputes involving E-9 workers under the Employment Permit System Some employers claim that payment through the “departure guarantee insurance” (mandatory departure insurance) constitutes full settlement. However, merely asserting that the matter was settled through departure insurance does not extinguish the severance obligation. The actual insurance payout must be compared with the statutory severance calculation to determine whether any shortfall exists. 3. Disputes over disguised subcontracting or freelancer status Some employers deny worker status based on the absence of social insurance enrollment. In such cases, worker status is determined based on substance over form, considering factors such as supervision and control, working structure, and wage payment methods. These issues should not be treated lightly. Delayed 대응 may make recovery of rights significantly more difficult. Legal Procedures When Severance Pay Is Unpaid If severance pay is not paid, the following steps may be taken: Filing a complaint with the Ministry of Employment and Labor Determination of unpaid wages Applying for a payment order or filing a civil lawsuit Simultaneously filing a criminal complaint, if appropriate Employers must pay severance within 14 days of the occurrence of the payment obligation (Article 9(1)). Failure to do so is punishable by up to three years of imprisonment or a fine of up to KRW 30 million (Article 44(1)). For workers planning to leave Korea, it is particularly important to secure evidence and file a complaint before departure. Missing the appropriate timing may significantly hinder actual recovery. For those facing unpaid severance as foreign workers, understanding these procedures can provide meaningful practical assistance.
-
If You Need Help Reporting Unpaid Compensation as a Freelancer and Seeking Assistance from the Labor Office, Read This Carefully
Why Is Unpaid Compensation So Common for Freelancers? One of the most frequent problems freelancers face is the non-payment of service fees or compensation. Phrases such as “Let’s settle everything next month,” “The client hasn’t paid us yet,” or “The performance is unclear, so it’s hard to finalize the amount” come up repeatedly. Payment responsibility is often postponed on the grounds that the individual is “not an employee,” or work proceeds without a clearly defined payment structure from the outset. The absence of employment insurance or coverage under the four major social insurance schemes, combined with an environment where it feels difficult to raise issues about non-payment, makes freelancers even more vulnerable. At this stage, however, one point must be clearly understood. The root of the problem is not the freelancer’s status itself, but contracts and compensation structures that were disadvantageously designed from the beginning. Being a Freelancer Does Not Mean “Wages” Are Never Protected Many freelancers facing unpaid compensation conclude, “I’m not an employee, so I’m not protected.” However, legal determinations are not based on the title of the contract, but on the actual nature of the work relationship. Courts consider factors such as whether the user determined the content of the work and exercised substantial direction and supervision during its performance, whether working hours and locations were designated and binding, and whether the individual could independently operate a business—for example, by owning equipment or hiring third parties to perform the work. They also assess whether the compensation constitutes payment for the labor itself, whether a base or fixed salary was set, and whether there was continuity in the work relationship and exclusivity toward the user. When these elements are recognized, there are many cases where, despite a “freelancer” contract, worker status is acknowledged and the issue of unpaid service fees is treated as unpaid wages under the Labor Standards Act. Even if worker status is ultimately denied, that does not mean there is no way to respond. Claims can still be pursued as civil claims for unpaid service fees or compensation. The most dangerous decision is to prematurely rule out these possibilities on your own. Why Handling the Issue Alone Often Makes Things Worse for Freelancers When payment is withheld, emotions can easily take over. However, a single hastily sent message can put the entire response to unpaid freelancer compensation at a disadvantage. Such messages are often used to justify non-payment or are exploited as evidence to evade responsibility. Outcomes vary significantly depending on whether a payment date was specified, how performance-based clauses are interpreted, and what legal meaning is attributed to verbal agreements or messenger conversations. If handled incorrectly, freelancers may be directly exposed to arguments such as “the compensation was never agreed upon,” “performance was insufficient,” or “there is no obligation to pay due to contract termination.” This is not an issue an individual should be expected to endure alone. Without reassessing the underlying structure, unpaid compensation issues for freelancers tend to become prolonged. Decent Law Firm’s Approach to Handling Unpaid Compensation for Freelancers Decent Law Firm does not view unpaid freelancer compensation as a simple matter of payment demands. From the initial stage, we review both the contract and the actual work performed to conduct a detailed analysis of potential worker status. We systematically organize messenger records, emails, and past payment practices to prevent the formation of justifications for refusing payment. Where worker status is recognized, we pursue claims that include unpaid wages, severance pay, and statutory late payment interest (20% per annum under Article 37(1) of the Labor Standards Act and Article 17 of its Enforcement Decree). Where worker status is denied, we shift strategy to claims for unpaid service fees or damages under civil law. There is only one guiding principle. Whether the chosen approach makes it realistically possible to recover the money. If you are a freelancer losing sleep over this issue, remember clearly that you are not alone. If, on the other hand, you treat this matter lightly, even amounts that could have been recovered may be lost, and unpaid compensation can solidify into irreversible financial damage.
-
If You Need Help Understanding the Meaning, Timeline, and Supreme Court Precedents on Lawsuits to Confirm Worker Status
Why Lawsuits to Confirm Worker Status Matter Even when contracts are signed under labels such as “freelancer,” “outsourcing,” or “independent contractor,” the first and most critical issue in a dispute is whether the individual legally qualifies as a “worker.” A lawsuit to confirm worker status is the procedure that definitively resolves this issue, and it serves as the starting point for all subsequent legal determinations, including wages, severance pay, the legality of dismissal, and entitlement to social insurance. Once worker status is recognized, the protective provisions of the Labor Standards Act—covering wages, severance pay, and restrictions on dismissal—apply retroactively. As a result, previously unsettled rights and obligations are determined all at once (Article 2(1)1 of the Labor Standards Act). This makes the issue a source of real protection for one party and, at the same time, a significant legal burden for the other. Above all, if the initial approach is misdirected, it can lead to legal risks that are difficult to remedy later. For this reason, the issue must never be approached lightly. How Courts Determine Worker Status When determining whether an individual qualifies as a worker, courts do not focus on the form or title of the contract. Instead, they examine the substance of the working relationship—specifically, whether the individual provided labor to the employer in a subordinate relationship for the purpose of receiving wages. In practice, courts comprehensively consider economic and social factors such as: Whether the employer determines the content of the work and exercises substantial direction and supervision over how it is performed Whether the employer designates working hours and the workplace, and whether the individual is bound by such designation Whether the individual can independently operate a business at their own expense and responsibility Whether the individual bears the risks of profit and loss arising from the provision of labor Whether the remuneration constitutes compensation for the labor itself Whether a base salary or fixed compensation is set, and whether wage income tax is withheld The continuity of the working relationship and the degree of exclusivity toward the employer Whether the individual is recognized as a worker under social security systems That said, factors such as the existence of a fixed salary, withholding of wage income tax, or recognition under social insurance schemes are matters the employer—often in a stronger economic position—can unilaterally determine. Therefore, worker status should not be easily denied based on these factors alone. In short, no single element is determinative. The key lies in assessing the overall structure and substance of the working relationship. Practical Issues That Commonly Arise in Disputes In lawsuits to confirm worker status, the burden of proving worker status generally lies with the individual asserting it (Supreme Court Decision dated June 25, 2020, Case No. 2020Da207864). Accordingly, it is essential to secure concrete evidence that demonstrates actual working conditions and the existence of direction and supervision. In practice, claims for unpaid wages or severance pay are often combined with a worker status confirmation claim. If worker status is recognized, rights are applied retroactively, which can significantly expand the scope of the dispute and the associated risks. As a result, the later a strategic approach is taken, the greater the financial and legal burden becomes for the parties involved. Decent Law Firm’s Approach to Lawsuits Confirming Worker Status In lawsuits to confirm worker status, the most important task is not merely asserting that worker status exists, but proving—through concrete facts—that the substance of the labor relationship constitutes a relationship of subordination to the employer. Decent Law Firm approaches these cases by focusing on the actual substance of the working relationship, rather than the form or title of the contract, and by structuring the facts in a way that allows the court to make a clear legal determination. We also view worker status confirmation lawsuits not as isolated win-or-lose cases, but as the starting point of the entire dispute. In doing so, we comprehensively assess the client’s situation and the potential legal risks that may arise after the judgment, and set a strategy aimed at minimizing burdens that could extend beyond the outcome itself. A lawsuit to confirm worker status is a procedure that should never be taken lightly. This is precisely why professional legal assistance is essential from the initial planning stage onward.
-
If You’re Curious About Legal Responses to Unfair Disciplinary Actions Before the Labor Relations Commission, Read This Carefully
Unfair Discipline Is Not Something You Have to Endure The moment an employee is notified of disciplinary action, many experience shock and fear at the same time. Measures such as dismissal, suspension, salary reduction, or reprimand go far beyond ordinary personnel disadvantages and directly affect an employee’s livelihood and long-term career. As wages decrease or periods of exclusion from work grow longer, daily life can quickly become unstable. Despite this, many employees resign themselves to the situation, thinking, “It’s the company’s decision, so there’s nothing I can do.” This perception, however, is a clear misconception. Unfair disciplinary action is not an area left entirely to the employer’s discretion—it is a matter that can be fully contested under the law. In practice, many disciplinary actions are imposed without sufficient justification or in violation of required procedures. For employees who lie awake at night with a sense of injustice and anxiety, it is crucial to recognize that this is not a matter of personal misfortune to be endured alone, but a legal issue where the law can and should intervene. At the same time, this is not an issue that should be taken lightly. Missing the right time to respond can lead to consequences that are difficult to reverse. When and What You Can Challenge Through an Unfair Discipline Remedy Application An application for relief from unfair disciplinary action is not limited to dismissal cases. Under the Labor Standards Act, dismissal, leave of absence, suspension, transfer, salary reduction, and other forms of disciplinary punishment are all subject to remedy applications. A reprimand may not qualify if it causes only minimal practical disadvantage. However, if it results in concrete disadvantages such as restrictions on promotion or pay raises, it may still be challenged. The key issue is whether the disciplinary action satisfies the standards of justification required by the Labor Standards Act and relevant court precedents. One of the most critical factors is the filing deadline. An application for relief must be submitted within three months from the date the disciplinary action was imposed. However, if the disciplinary decision is modified through an internal company review or appeal process, the filing period may begin from the date the revised decision is notified. If this deadline is missed, the action cannot be challenged procedurally, no matter how unfair it may be. During the hearing and investigation process, the Labor Relations Commission focuses on three main points: Whether the grounds for discipline are supported by objective facts Whether the severity of the disciplinary measure is excessive in light of the established grounds Whether procedural fairness—such as providing an opportunity to be heard—was properly observed If even one of these elements is lacking, there is a strong basis for finding the discipline unfair. What Employees Most Often Miss When Responding Alone When employees handle these cases on their own, the most common mistake is an emotion-driven approach. Statements that emphasize a sense of injustice may elicit sympathy, but they often work against the employee in legal evaluations. Mistakes are also frequently made during the preparation of written statements or submission of evidence, such as using unnecessary expressions or submitting documents without clearly organized facts. These errors can allow the employer’s arguments to dominate the narrative logically. If the response strategy is set incorrectly at the initial stage, it becomes extremely difficult to correct later during hearings. Moreover, Labor Relations Commission proceedings move faster than many expect, and once submissions are made, they remain on record. Overlooking this reality can have a decisive impact on the outcome. Why Legal Counsel Is Important in Unfair Discipline Cases There is a substantial difference between merely listing facts and structuring those facts into legally relevant issues. Legal counsel begins by reorganizing the case to align with legal standards of review and clearly separating irrelevant arguments from core issues. Strategic argumentation tailored to Labor Relations Commission procedures often determines the result. Rather than simply appealing to a sense of unfairness, it is necessary to set realistic objectives—such as reinstatement, cancellation of disciplinary action, or recognition of back pay—and design arguments accordingly. Decent Law Firm provides comprehensive support in unfair discipline remedy cases, from initial consultation and fact organization to argument structuring and hearing representation. Given the significant impact that early strategic decisions have on the final outcome, the importance of initial consultation cannot be overstated. An application for relief from unfair disciplinary action is not merely a procedural matter—it is a legal response to protect an employee’s career and livelihood. Because outcomes can vary drastically depending on how quickly and accurately action is taken once the issue is recognized, we strongly recommend seeking at least preliminary legal advice before it is too late.
-
Legal responses every employer accused of violating the Labor Standards Act must review
Violations of the Labor Standards Act start with “structure,” not “intent” In practice, many employers say, “I didn’t know the law,” or “I was just following common practice.” However, violations of the Labor Standards Act may result in criminal liability once intent is recognized, and ignorance of the law does not exempt an employer from responsibility. In reality, most problems do not stem from bad faith, but from the gap between statutory standards and actual workplace operations. Industry practices, internal customs, or long-standing methods may feel familiar in daily operations, but they can lead to completely different conclusions in legal assessments. In particular, when a business expands without a structured HR and labor management system, small mistakes tend to accumulate and eventually develop into disputes. The party experiencing the greatest anxiety and pressure in this process is often the employer. For those lying awake at night, struggling alone to determine how to respond, this article aims to provide a realistic framework for understanding the situation. One point must be made clear: issues under the Labor Standards Act are never trivial. A misstep in the initial assessment can escalate into full criminal proceedings. Common types of Labor Standards Act violations involving employers Cases that proceed to investigations or litigation show consistent patterns of violation. First, wage-related issues. These include failure to meet minimum wage requirements, misinterpretation of what counts toward wages under Article 5 of the Enforcement Decree of the Minimum Wage Act, and miscalculation of overtime, night work, or holiday work allowances. In particular, many employers use the label “comprehensive wage system” (fixed overtime pay) without satisfying the legal requirements established by case law—such as difficulty in calculating working hours, absence of disadvantage to employees, and explicit or implicit agreement—resulting in frequent legal issues. Second, working hours and break-time management. Situations where attendance records are missing or merely formal, or where break times exist only on paper and employees cannot freely use them, are investigated as violations of Article 54 of the Labor Standards Act (see Supreme Court Decision, July 12, 2018, 2013Da60807, among others). Misunderstandings also frequently arise regarding special industry exceptions under Article 59 of the Act and the written agreement requirements for flexible working-hour systems. Third, disputes over severance pay and continuous service periods. Employers may believe that they created a formal break during contract renewals, but courts assess continuity based on the substance of ongoing employment, not formal interruptions (see Supreme Court en banc Decision, July 11, 1995, 93Da26168). This category also includes cases where the label “freelancer” or “fixed-term employee” does not align with the actual working arrangement. Fourth, violations related to documentation and formal requirements. Failure to prepare or deliver employment contracts, failure to report workplace rules, and omission of mandatory items in wage statements are often treated as simple mistakes, but are clearly regarded as violations during investigations. The real risks employers face when violating the Labor Standards Act Many employers assume the matter will end with an administrative fine, but the reality is different. Labor inspections can begin with corrective orders and escalate into criminal charges. It is not uncommon for a complaint by a single employee to expand into an investigation covering the entire workforce. Under Article 115 of the Labor Standards Act (the joint liability provision), not only the corporation but also the individual representative may be subject to criminal punishment, including the possibility of a criminal record due to fines. That said, if the employer can demonstrate that they exercised substantial care and supervision to prevent violations, exemption from liability may be possible (proviso to Article 115). Beyond this, employers must consider civil claims for retroactive wages or severance pay, damage to business reputation, and the spread of issues into investment and labor risks. Ultimately, a single HR issue can affect the entire business. How Decent Law Office changes the direction of response When an investigation or complaint is initiated, the first thing an employer should do is not to immediately provide statements or submit documents. The priority is to organize the facts, separate legal issues, and establish a response strategy. Internal attendance data, wage structures, and the consistency between contracts and actual practices must be reviewed first. Accordingly, Decent Law Office focuses on building statement strategies for labor inspections, conducting advance reviews of wage, working-hour, and severance structures, and establishing early defenses to minimize criminal risk. The firm also works in coordination with labor and accounting professionals to propose solutions that consider the entire business structure, rather than addressing violations in isolation. Whether Labor Standards Act issues remain a matter of post-incident damage control or are transformed into a preventive management system depends on the initial response. Before finding yourself labeled as an employer in violation of the Labor Standards Act, reviewing your structure and correcting course is the most realistic choice.
-
Must-read if you are wondering how to review an employment contract and respond effectively
Why an employment contract is not a mere “formality,” but a risk-management document Employment contracts are often treated as formal documents used simply to complete the hiring process. In reality, however, a significant number of labor disputes originate from the wording of the contract itself. In many cases, contracts are formally executed but contain provisions that fail to meet the standards set by the Labor Standards Act and other relevant laws, or they repeatedly use clauses where the actual working conditions differ from those stated in the contract. In practice, once a dispute arises, the rights and obligations of the parties—and the scope of liability—are determined based on the working conditions specified in the employment contract. For this reason, reviewing an employment contract should not be viewed as damage control after a problem occurs, but as a preventive measure designed to block disputes from arising in the first place. This process is not a simple document check; it is the starting point for managing legal risks that may persist for years. Key clauses that most frequently cause problems in employment contracts Clauses that lead to disputes tend to follow consistent patterns. If the structure of wages is unclear—such as the distinction between base salary, bonuses, and various allowances (overtime, night work, holiday work, etc.)—disputes often arise during the calculation of ordinary wages, average wages, and retirement benefits (Labor Standards Act Article 2(1)5 and 6). Dispute risk also increases when provisions regarding prescribed working hours, overtime, night work, and holiday work are drafted in broad or vague terms rather than with sufficient specificity. In particular, comprehensive wage systems (fixed overtime pay systems) are frequently applied in form only, without satisfying the required conditions—such as difficulty in calculating actual working hours—resulting in especially high legal risk (see Supreme Court Decision, May 20, 2010, 2008Da6052, among others). Issues also commonly arise where the title of a worker—such as fixed-term employee or freelancer—does not match the actual nature of the work performed, leading to disputes over employee status. Likewise, unclear standards for contract expiration, termination, or renewal repeatedly become sources of conflict (Act on the Protection of Fixed-Term and Part-Time Employees, Article 2(1)). Ultimately, the core issue is not whether a clause exists, but how it is drafted, which is precisely why a proper employment contract review is necessary. When is an employment contract review necessary? The most effective time is before entering into the contract, specifically just prior to signing. Review is also critical when a contract is renewed, working conditions are changed, or personnel and compensation systems are restructured. It is likewise necessary when discrepancies emerge between the terms stated in the contract and how they are actually implemented—particularly with respect to wages, retirement benefits, and working hours—or when early signs of dispute appear. Conducting an employment contract review in advance, rather than after a dispute has already arisen, can significantly reduce legal costs and risks. For those who feel uncertain or anxious due to legal ambiguity surrounding their employment contract, it is important to understand that professional review at an early stage can decisively influence the outcome of any future dispute. Conversely, delaying proper review and response may expand the scope of legal liability or make dispute resolution more difficult, requiring a cautious and proactive approach. Decent Law Office’s approach to employment contract review Decent Law Office does not stop at refining wording. Each clause is analyzed for risk based on real labor disputes and judicial precedents, with a focus on structural vulnerabilities that could lead to conflict. Furthermore, the firm considers response strategies that can be immediately implemented should a dispute arise in the future. Through this approach, employment contract review becomes not a one-time procedure, but an ongoing risk-management tool. An employment contract is not a document to consult after a dispute occurs—it is a document designed to prevent disputes from occurring at all. With Decent Law Office, a single employment contract review can reduce long-term accumulated legal risks, and that choice ultimately protects both the organization and the individual.
