Legal information

Yes, if two conditions are met: you stayed with one employer for a full year without a break, and your working hours averaged 15 or more a week. Severance pay (퇴직금) comes from the Employee Retirement Benefit Security Act, which applies to every business that employs workers except family businesses run only with relatives living together and household employment. The Act borrows its definition of "worker" from general labor law, and that definition says nothing about immigration status.

So the employer's position that "severance is for legal workers" is wrong. What usually goes wrong instead is counting: whether the year is really continuous, and what the average wage was when nothing was ever written down.

How much is it?

The legal minimum is one month's average wage, meaning 30 days' worth, per full year you stayed, plus a proportional amount for any extra months. Average wage is your total pay over the final three months, divided by how many calendar days those months contained.

A simple example: you worked two years and four months, and in your last three months you were paid 2,700,000 won each month. Total for 92 days is 8,100,000 won, so the average daily wage is about 88,000 won. Thirty days of that is about 2,640,000 won per year, and for two years and four months the figure comes to roughly 6,160,000 won. Night and overtime extras paid during that window are part of the total, which is why a worker's final three months matter.

If cash was how you were paid, write down the amounts you actually received, month by month, and use whatever you have that supports them: a message saying "I sent 2.7", a photo of an envelope with a note, a co-worker on the same rate.

Does my year still count if my visa ran out in the middle?

In our view, yes. Continuous service means you kept working for one employer with no genuine break. The day your visa expired did not end your employment; you came to work the next morning as before. It is the working relationship, not the permission to stay, that the Act measures. We state this as our reading rather than a guarantee, because an employer may argue that the contract became void when your status ended, and that argument would need to be answered in a case.

Things that may cut the year in two, and should be checked:

• A gap of weeks where you were sent away and then rehired, especially if the employer "settled up" at the gap.
• Being moved on paper to a different company name while the work stayed the same. The name on the paper does not always decide this.
• Contracts of 11 months, ended just before the year, then renewed. Whether that breaks continuity depends on the facts, and it is a known pattern worth pointing out to the inspector.

I was an E-9 worker before my visa expired. What about the departure insurance?

For the months you worked with status, the employer should have paid into the departure-guarantee scheme (출국만기보험). Those contributions do not disappear because you later lost status, and you can ask the insurer what is in the account. The amount typically covers only part of what the law calls severance, and nothing at all for the months after the contributions stopped. The rest, up to the full legal amount, is owed by the employer directly. Treat the insurance as a partial payment to be deducted, not as the whole answer.

How is it paid when I have no bank account or residence card?

The Act says severance is transferred to an individual retirement pension account (개인형퇴직연금, IRP) that the worker names, with exceptions set by decree. A person without status usually cannot open one. In practice the money is then paid in another way, but the mechanics are something to settle with the employer, or failing that with the inspector, rather than assume. If you still have a Korean bank account from your registered period, keep it open until the money arrives. If you do not, discuss early whether payment can go to a representative's account under a written authorization, so the question does not become the employer's excuse for delay.

When does it have to be paid, and how long can I wait?

Severance falls due 14 days after your last working day, unless a later date is agreed between you and the employer in writing. Interest runs on late payment. The right is lost three years from your last day, so a worker who left in the spring of 2023 is already close to losing it.

If you plan to leave Korea, claim before departure wherever possible. The procedure after departure works through a representative and is covered in a separate article, but it is slower, and the first interview with the inspector is much easier to do in person.

What if the employer offers a "goodwill payment" instead?

Sometimes the employer offers a round sum, say one million won, "for your trouble" on the condition that you sign a paper. The paper is usually a declaration that nothing further is owed. If the sum is less than the legal amount, signing it means giving up the difference. Have the paper translated before signing, and compare the number with the calculation above.

Next step

Use the wage calculator to produce a severance figure from your real pay, then compare it with any insurance payout or offer. If the employer disputes your start date or claims you worked for a different company, a lawyer can help establish the facts before you file. Consultations are paid; when you contact us, a staff member will call you back and explain the fee.

법무법인 대한중앙
1533-7377

Rules applied

Employee Retirement Benefit Security Act (근로자퇴직급여 보장법) Article 2 (worker, wage and average wage as defined in the Labor Standards Act), Article 3 (applies to every business employing workers; not to businesses of cohabiting relatives only or household employment), Article 4(1) (no obligation for less than one year of continuous service or under 15 hours a week averaged over four weeks), Article 8(1) (at least 30 days of average wage per year of continuous service), Article 9 (payment within 14 days of the ground arising, extendable by agreement; payment into an IRP account with exceptions by decree), Article 10 (right lapses after three years). Labor Standards Act (근로기준법) Article 2(1)6 (average wage: total wages for the three months before the event, divided by the days in that period), Article 37(1)1 (interest on late severance paid as a lump sum).

This is general information, not legal advice. Every case is different.