What are the conditions for receiving severance pay?

What the Law Says

Severance pay in South Korea is governed primarily by the Guarantee of Workers’ Retirement Benefits Act (GWRBA), which sets mandatory conditions for eligibility, calculation, and payment.

An employee is entitled to severance pay if they have worked continuously for at least one year for the same employer. This includes all periods of employment without interruption — even probationary or part-time work counts toward the one-year requirement, as long as it meets the statutory definition of 'worker'.

The employee must be terminated — either by dismissal, layoff, or expiration of a fixed-term contract — and not have voluntarily resigned. Resignation generally disqualifies an employee unless it qualifies as constructive dismissal under strict conditions (e.g., employer’s serious breach of duty).

The employer must be subject to the GWRBA: this applies to workplaces with five or more employees (including dispatched workers counted under certain conditions), though enforcement and penalties are stronger for employers with 10 or more regular workers.

Severance pay must be paid within 14 days of termination — but the law states 'within 30 days' for most cases, and courts routinely enforce the 30-day deadline as mandatory. The amount is calculated based on 30 days’ average wage per year of continuous service.

Statutory Text

A worker who has been employed continuously for one year or more shall be entitled to retirement benefits.

— Guarantee of Workers’ Retirement Benefits Act, s. 3 — Entitlement to Retirement Benefits

Statutory Text

The employer shall pay the retirement benefits within 30 days from the date of retirement.

— Guarantee of Workers’ Retirement Benefits Act, s. 5 — Payment Deadline

Statutory Text

Retirement benefits shall be calculated at the rate of thirty days’ average wage for each year of continuous employment.

— Guarantee of Workers’ Retirement Benefits Act, s. 4 — Calculation Method

What to Do

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