Rules of Employment in Korea: The Filing That Starts at Your Tenth Hire

The tenth hire is the one that changes your compliance position in Korea. At ten employees, Article 93 of the Labor Standards Act makes written rules of employment compulsory, requires them to be filed with the Ministry of Employment and Labor, and requires a fresh filing every time you change them. The obligation is not triggered by a funding round, an office move or a registration — just headcount.

Most foreign-owned entities cross it without a decision being taken. There is no notice, no letter from the labour office, and nothing in the monthly payroll run that flags it. The company simply becomes non-compliant at some point during a hiring quarter and stays that way until an inspection, a dispute, or a diligence exercise turns it up.

How Korea actually counts to ten

This is the part that catches people, because the number is not a headcount on a date. Article 7-2 of the Enforcement Decree sets out an averaging method: take the total number of employees used across the one month preceding the date the question arises, and divide it by the number of days the business operated in that month.

Paragraph 4 tells you who goes into the numerator. Everyone working at the business or workplace counts, whatever the contract type — permanent staff, fixed-term employees and part-timers all in. The single exclusion is dispatched workers supplied under the Act on the Protection of Temporary Agency Workers, who count against the agency rather than against you.

Then there is a proviso that runs in both directions, and it is the reason a company sitting near the line cannot resolve the question with arithmetic alone:

The decree names the Article 93 test explicitly, which is worth knowing because most of the Labor Standards Act’s coverage rules turn on five employees rather than ten. A company can be well inside the five-employee provisions — annual leave, the 52-hour week and overtime premiums — and still be below the rules-of-employment threshold. The two lines move independently and you cross them in separate quarters.

What has to be in the document

Article 93 lists thirteen subjects. This is not an outline to work from — it is the minimum content, and a filing that omits one of them is incomplete.

Item 12 comes with a limit that surprises companies importing a disciplinary policy from head office. Article 95 caps punitive wage deductions: no single infraction may cost more than half of one day’s average wages, and total deductions may not exceed one tenth of the wages payable in any one pay period. A policy borrowed from another jurisdiction that docks a day’s pay for a serious breach is unenforceable in Korea before anyone applies it.

Item 11 has been mandatory since the 2019 amendment that brought workplace harassment into the Act. Handbooks written before then are missing it, and that is the single most common gap we see in documents that were filed once and never revisited.

The 2023 decision that changed how you amend it

Article 94(1) draws a line that matters more than anything else in this chapter. To prepare or amend the rules, an employer must hear the opinion of the majority union, or of a majority of the employees where there is no such union. But to amend them unfavourably to employees, the employer must obtain their consent — collectively, not employee by employee. Whichever applies, the written opinion or consent goes to the labour office attached to the filing under Article 94(2).

For decades there was an escape hatch. Where an employer had made an unfavourable change without collective consent, the courts would still uphold it if the change had “socially acceptable rationality” — a judicially developed standard weighing the necessity of the change against the disadvantage it imposed. A great deal of English-language guidance on Korean employment law still describes that test as live.

It is not. On 11 May 2023 the Supreme Court, sitting en banc, overruled it. The decision holds that an unfavourable amendment made without collective consent cannot be validated on the ground of social reasonableness alone, and expressly changes all prior authority to the contrary. The court’s reasoning is that the right of collective consent is a procedural right conferred by the proviso to Article 94(1), a mandatory provision, and that a procedural right cannot be substituted by a judgement about the merits of the change.

What replaced it is much narrower. An unfavourable amendment can still stand where the union or the employees abused their right of consent — meaning the need to change the rules was objectively and clearly established, the employer made genuine efforts to persuade, and the employees refused without offering any reasonable ground. The court added that this exception is to be judged strictly.

The practical difference is procedural, not rhetorical. Before 2023 an employer could reasonably run a consultation, fail to get consent, proceed anyway, and expect to defend the change on its merits. Now the record of the consent process is the defence. What that means in practice is keeping the meeting notices, the explanatory materials, the attendance records and the ballot — the evidence that a serious attempt was made — because that evidence is what the narrow exception is built out of.

The case itself is a useful illustration of what counts as unfavourable. The employer had introduced a separate set of rules for managerial staff which abolished a monthly leave entitlement and imposed a 25-day ceiling on annual leave that had previously been uncapped. That was held to be an unfavourable amendment requiring consent, and the case went back to the lower court to decide whether the union’s refusal amounted to abuse.

Two 2026 changes that date most existing handbooks

Rules of employment are supposed to track the law, and the law moved twice in ways that touch wording almost every Korean handbook contains.

The amended Labor Standards Act in force from 23 October 2025 extended statutory delay interest on unpaid wages — 20% a year — to employees still in service. Previously it ran only after termination, which is why so many handbooks describe it as a leaver’s remedy. The same package introduced damages of up to three times the loss for wage arrears and tightened enforcement against habitual offenders. Any clause in your rules describing late wages as a post-employment issue is now wrong on its face.

Separately, the Act establishing 근로자의 날 was fully amended by Act No. 21134 to rename the day 노동절, with effect from 1 May 2026. This is cosmetic in substance and untidy in practice: a holiday clause naming a statutory holiday that no longer exists under that name is the kind of detail that makes a document look unmaintained to an inspector reading it for the first time.

Where the rules sit against everything else

Article 96 puts the rules of employment below both statute and the applicable collective agreement, and gives the Minister of Employment and Labor power to order modification of any part that conflicts with either. Article 97 then puts them above the individual contract, in one direction: a contract term that falls short of the standard set in the rules is void, and the standard in the rules applies to that part instead. A contract that is more generous survives untouched.

That asymmetry is the reason the document is worth getting right rather than filing and forgetting. It sets a floor that runs underneath every employment contract in the entity, including ones signed years earlier and ones drafted by head office in another language. A generous clause written into the handbook in 2018 to help with recruitment is still binding on contracts signed in 2026.

Article 14 closes the loop: the employer must keep the Act and the rules of employment posted or otherwise available at a place employees can access at all times. A PDF sitting on the finance director’s laptop does not satisfy it. An intranet page everyone can reach does.

What this costs, and when it is worth doing properly

The fine is up to 5 million won under Article 116(2), and in isolation it is not the thing to worry about. Administrative fines for a first, promptly corrected failure are usually modest.

The cost that lands is downstream. An unfiled or defective set of rules is the document a labour inspector asks for first, and its absence sets the tone for everything else they look at. A void amendment means the company has been applying terms it cannot enforce, sometimes for years, with the difference payable — and since October 2025 payable with 20% interest to people still on the payroll. In an acquisition, the rules of employment and the evidence of consent behind each amendment are standard diligence requests, and a gap there is priced.

Set against that, the work is finite. The document is drafted once against the thirteen subjects, filed at the district labour office with the employee opinion or consent attached, and then maintained — which mostly means catching the annual legislative changes and re-filing when something material moves. Our payroll outsourcing service tracks those changes as part of the compliance calendar, alongside the four major insurances and the year-end cycle, because the same amendments that change a contribution rate usually change a handbook clause.

The honest limit of all this: if you have six people in Korea, Article 93 does not apply to you and a filing you are not required to make buys you nothing. Write down the terms anyway — Article 97 gives written rules effect over contracts regardless of headcount, and having them settled before the tenth hire is much easier than retrofitting them afterwards, when every change needs consent.

Figures current as at 28 August 2026, verified against the Labor Standards Act and its Enforcement Decree as translated by the Korea Legislation Research Institute, the Supreme Court’s published summary of its en banc decision of 11 May 2023, and the Korean Law Information Centre. Nothing here is legal advice on a specific set of facts.