Getting your severance pay: who qualifies, how much, when, and what if it is not paid

Severance pay (퇴직금) is money your employer pays when you leave the job. If you meet the conditions, foreigners, part-time workers and staff at small shops can all get it.

Who can get it?

• You worked for the same employer for 1 year or more without a break.
• Averaged over 4 weeks, your contracted working hours (소정근로시간) were 15 hours or more a week.
• If you meet both conditions, workplaces with fewer than 5 workers and part-time jobs are included (Employee Retirement Benefit Security Act, Article 4).
• It applies the same way to every worker, whatever their nationality or visa status.

How much do you get?

Severance pay is at least 30 days of average wage for each year you worked (Article 8). Average wage is the total wages paid in the 3 months before you leave, divided by the total number of days in that period (Labor Standards Act, Article 2).

1. 1

   Add up your wages

   Add up all the wages you got in the 3 months before you left. Your payslips show this.

2. 2

   Work out the average wage

   Divide the total by the number of days in those 3 months (calendar days, including days off).

3. 3

   Work out severance pay

   It is generally calculated as average wage × 30 days × (days worked ÷ 365).

When must it be paid?

• It must be paid within 14 days after you leave (Article 9). The date can be extended if you and your employer agree.
• If it is still not paid after that, delay interest of 20% a year is added to the unpaid amount (Labor Standards Act, Article 37).
• The right to claim severance pay ends after 3 years. Do not claim too late.

E-9 and H-2 workers: departure guarantee insurance

Employers of E-9 and H-2 workers must subscribe to departure guarantee insurance (출국만기보험) to pay severance (Act on the Employment of Foreign Workers, Article 13). If the insurance payout is less than the legal severance pay, the employer must pay the difference.

For when and how departure guarantee insurance is paid, see the article ‘Severance pay and departure guarantee insurance: what to check before leaving’.

If you were not paid

1. 1

   Collect your papers

   Collect your employment contract, payslips, bank deposit records and anything that shows your start date and last working day.

2. 2

   Ask your employer

   Ask for your severance pay in a way that leaves a record, such as a text message.

3. 3

   Get advice

   You can call the Ministry of Employment and Labor customer centre at 1350. Foreign workers can get advice in several languages from the Foreign Workforce Counseling Center at 1577-0071.

4. 4

   File a petition

   Visit the regional employment and labor office (지방고용노동청 or 지청) that covers your workplace, or file online on the Ministry’s labour portal (labor.moel.go.kr).

5. 5

   Check substitute payment

   If your employer does not pay, you can get a confirmation of unpaid wages from the labour office and then apply to COMWEL (근로복지공단) for a substitute payment (대지급금). In the simplified substitute payment, the severance part is up to ₩7 million (up to ₩10 million together with the wage part). There is a deadline, so check with COMWEL as soon as you get the confirmation.