Hello, business owners! 🙌🏻
When a foreign employee is about to leave, have you ever thought this?
Foreign employees can also become eligible for severance pay if they meet the requirements set by law, and here’s what you should check before a foreign employee resigns or leaves the country,
Vijob will break down the essentials for you! 💡
✅ Check 1. “Because they’re foreign, is the severance pay different?” No, it isn’t!
When checking whether severance pay must be paid, you should not simply judge based on nationality or visa type alone.
First, please check the conditions below.
✔ Whether the continuous employment period is at least 1 year
✔ Whether the prescribed working hours are at least 15 hours per week on average over 4 weeks
✔ Whether the person is actually an employee who provided labor in exchange for wages
The Act on the Guarantee of Employees' Retirement Benefits excludes from retirement benefit coverage employees whose continuous employment period is less than 1 year or whose prescribed working hours are less than 15 hours per week on average over 4 weeks.
In other words,
E-7 means no severance pay ❌
E-9 means it’s automatically covered by insurance ❌
F visa means different standards apply ❌
It is risky to judge things this simply.
Also, being a workplace with fewer than 5 employees does not automatically exempt severance pay either.
As a general rule, the retirement benefit law applies to all businesses or workplaces that employ workers.
✅ Check 2. Can severance pay be calculated as “one month’s salary per year”?
In practice, people often think, “They worked for 1 year, so giving about one month’s salary should be fine.”
But the exact statutory severance pay is not calculated simply as monthly salary × years of service.
Basically, it is calculated based on 30 days or more of average wages for each 1 year of continuous employment.
Simply put, you can understand it as a structure of 1-day average wage × 30 days × continuous employment period.
Because average wages can be affected by wages and various allowances during a certain period before resignation,
rather than deciding severance pay arbitrarily based only on the employee’s monthly salary, it is safer to recalculate accurately based on the retirement date.
✅ Check 3. If they resign, make sure to remember the “14 days”!
If a foreign employee resigns, you also need to check the severance pay deadline.
As a general rule, when a worker retires, the employer must pay severance pay within 14 days from the date the payment reason arises.
If there are special circumstances, the payment date can be extended by agreement with the worker.
Here’s something business owners often miss!
The fact that the employee is leaving the country soon does not eliminate their eligibility for severance pay.
So it is best to settle things in this order: check the resignation date → check whether they are eligible for severance pay → calculate severance pay → check the payment deadline.
⚠️ If severance pay is not paid without a valid reason, criminal penalties may apply.
As of August 2026, the Act on the Guarantee of Employees' Retirement Benefits imposes up to 3 years in prison or a fine of up to 30,000,000 won for related unpaid retirement benefits.
✅ Check 4. Rewriting the contract does not make the length of service “0”
There are also cases where a foreign employee signs a 6-month contract → renews it → then signs a 1-year contract
and so on, with multiple employment contracts written over time.
At that point, it is easy to think, “Since we wrote a new contract, doesn’t the service period start over?”
But simply rewriting the contract does not always break the continuous employment period.
You need to check whether the employment relationship actually continued and whether there was a real resignation and rehire in between.
In administrative interpretations by the Ministry of Employment and Labor, it is also noted that eligibility for severance pay can vary depending on whether there was substantive continuous employment between repeated employment contracts.
So if an employee has had multiple contract renewals, please check the following:
✔ Initial hire date
✔ Contract renewal date
✔ Whether there was a resignation in between
✔ Payroll records
✔ Actual period worked
✅ Check 6. “They’re not enrolled in the 4 major insurances, so they’re not an employee?” That’s a risky assumption
In severance pay matters, it is important not only to look at the name on the contract or whether they are enrolled in the 4 major insurances, but also at how they actually worked.
For example, you should also check the real employment relationship, such as
✔ Whether the owner or manager gave work instructions
✔ Whether they worked at a set time and place
✔ Whether they received wages regularly as compensation for work
✔ Whether they worked under the control of the actual workplace
and other related facts.
So be careful not to assume that simply writing “freelancer” on the contract automatically excludes them from severance pay eligibility.
[Read more]: Foreign employee contract types — worker, freelancer, dispatch: what’s the difference?
📋 Before a foreign employee resigns, make sure to check this!
Let me summarize it once more
so it’s easy for business owners to check on site.
① Check the working period
Has the continuous employment period been at least 1 year?
② Check the working hours
Are the prescribed working hours at least 15 hours per week on average over 4 weeks?
③ Check the actual employment relationship
Was this person actually employed as a worker?
④ Calculate severance pay
Did you calculate the statutory severance pay based on average wages?
⑤ Check the payment deadline
Have you confirmed whether payment is required within 14 days after resignation?
⑥ Additional check for E-9 employees
Have you compared the Departure Guarantee Insurance (출국만기보험) payment amount with the statutory severance pay?
⑦ Check for employees with renewed contracts
Did you confirm the actual continuous employment period, not just the number of times the contract was written?
📞 If you’re concerned about hiring foreign workers, we’ll help you from the very beginning with Vijob.
At Vijob, we provide support all at once.
✔ Register and promote foreign job postings
✔ Guidance on whether hiring is possible by visa type
✔ Networking with foreign talent by country
(🇻🇳 🇲🇳 🇲🇲 🇮🇳 🇵🇭 🇳🇵 🇰🇭 🇮🇩 …)
Phone inquiries: 070-7124-3581 (Weekdays 9:00~18:00)
Email inquiries: service@vijob.net
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Focus on hiring, and Vijob will make the information you need for hiring foreign talent easy to understand. 😊💙