[HOAM Foreign Law Column] Severance Pay: The 1-Year Rule Every Instructor Should Know

Severance pay (Toejikgeum) is a mandatory legal benefit in Korea for all employees who work for more than one year. For foreign instructors, this often equals a 'bonus month' of salary for every year of service. However, many hagwon owners use common myths and contract loopholes to avoid this payment.

1. The '15 Hours Per Week' Rule

To be eligible for severance pay, you must work an average of at least 15 hours per week over a period of one year. This includes not just teaching hours, but also mandatory prep time and meetings. If your combined working hours meet this threshold for 52 consecutive weeks, you are legally entitled to severance.

2. Severance for 'Freelancers'

Many hagwons label their instructors as 'Independent Contractors' or '3.3% Taxpayers' (Freelancers) and claim they don't owe severance. This is false. The Ministry of Employment and Labor and Korean courts look at the 'substance of labor.' If the hagwon controlled your schedule and provided the curriculum, you are a 'worker' under the law and MUST receive severance pay regardless of your tax status.

3. How Much is it?

The basic formula is: (Average Daily Wage x 30 days) x (Total Days of Continuous Service ÷ 365). In simpler terms, it is roughly one month's salary for every full year you worked. This amount must be paid within 14 days of your last day of work.

4. Illegal Clauses to Watch Out For

Any clause in your contract that says 'The instructor waives their right to severance pay' or 'Severance is included in the monthly salary' is legally void and unenforceable in Korea. Even if you signed it, you can still claim your full severance pay after you leave.

5. Why Hoam Law Firm?

Landlords/Owners often delay severance payments, hoping the foreigner will leave Korea and forget about it. Hoam Law Firm helps you calculate the exact amount owed—including any unpaid overtime that should have been part of your 'average wage.' We file the petition with the Labor Office and, if necessary, represent you in court to ensure your one-year (or more) of hard work is properly compensated.

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