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Employment Contract · Required Terms

Employment Contract

📂HR & Labor⏱2 min read📊Beginner🔗10 related

What Is an Employment Contract?

In one line
A contract in which the employee and employer set working conditions such as wages and working hours. Items required by law must be specified and handed over in writing.
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⚡ Summary in 3 lines
  • Wages, working hours and holidays must be spelled out
  • Break wages down by item, not as a lump sum
  • When conditions change, redraft the document

Writing an employment contract properly is not about filling in a single form. It is about the company fixing, at the time of hiring, what it will pay and what work it can assign. If conditions are not written down, the company has to explain what was promised when a dispute arises, and when accounts differ, the side holding the records wins. The first thing to change in practice is the mindset: a contract is not a document that binds the employee, but one that fixes what the company owes. The moment you put someone to work before settling pay, the company takes on the risk that any condition left open will later be read the way the employee claims.

In practice, it helps to view the items in two tiers. Some matters only need to be specified (workplace, job duties, items the work rules must contain), while others must be put in writing and handed over (wage components, calculation method and payment method, contractual working hours, holidays, paid annual leave). The two carry different weight. For fixed-term and part-time workers, you must also state the contract term and working hours for each working day, and part-time workers’ overtime terms must be recorded too. With the worker’s consent, the document may be delivered electronically, and when working conditions change, the rule is to redraft the contract with the changes and hand over a new copy. The required items and penalties may be amended, so check the latest laws and regulations.

The two statements most often heard in the field are 'the work rules cover everything, so keep the contract simple' and 'the total monthly pay is what matters anyway.' If wages are stated only as a monthly total of KRW 3 (≈ US$1) million, there is no basis to argue that overtime pay is included in it. If a complaint is filed, that total may be treated as base pay, and premium pay is then added on top. A wage reduction during probation also comes with conditions: for contracts of one year or longer, within 3 months and at 90% or more of the minimum wage, and no reduction is allowed at all for simple manual labor. Companies also often draft the contract and then simply keep it in a cabinet, but 'drafting' and 'handing over' are separate obligations, so if you cannot prove delivery, it remains a violation.

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💡 In plain English
It's like a deal with no written terms. When relations are good, nothing goes wrong; when they sour, everything does.
Why it matters in practice
Many labor disputes start with something the contract never said. A contract is not hiring paperwork. It is the document that protects the company.
Origin and sources

The Labor Standards Act requires employers to specify working conditions when signing an employment contract, including wages, contractual working hours, holidays and paid annual leave, and to hand over wage-related terms in writing (Article 17, among others).

Source · Labor Standards Act, Article 17 (Specification of Working Conditions)
An example

This is the story of Company A, a metal parts manufacturer. Of its 138 employees, 92 are production workers. Most of those hired over the past 3 years signed a one-line contract that said only 'KRW 2.9 million (≈ US$2,170) per month.' When 2 former production workers filed a complaint over unpaid overtime and night-shift pay, an outside inspection began. (Hypothetical example)

  1. A labor law firm consultant printed all 92 production-worker contracts and found that only 31 stated the scheduled working hours. More than half left out when breaks are taken.
  2. When the HR manager asked, 'Doesn't a total of KRW 2.9 million (≈ US$2,170) cover everything?', the consultant put a table on the desk breaking it down: base pay of KRW 2.08 (≈ US$1) million, 40 hours of overtime at KRW 620,000, (≈ US$465) and a meal allowance of KRW 200,000 (≈ US$150).
  3. Production Team 1 runs two shifts, so hours differ by workday. Together with the plant manager, we attached the Shift A and Shift B schedules to the contract as an appendix, and for the 12 fixed-term employees we wrote out the contract term and the renewal criteria separately.
  4. The company found that it had customarily been paying 80% of wages during the 3-month probation. It corrected this to at least 90% of the minimum wage and paid the 4 affected employees the retroactive difference of KRW 1.16 million (≈ US$870).
  5. We switched delivery to e-signature so that once an employee signs, a copy is automatically emailed to them, leaving no room for 'I never received it.'
  6. At the follow-up check six months later, the share of employees confirmed to have received a written copy rose from 34% to 100%. The 2 labor complaints were closed after the company paid KRW 4.7 million (≈ US$3,520) in unpaid wages, with no further penalties.
Related terms
Work Rules · Drafting and Unfavorable ChangesThe internal rules that set working conditions and workplace discipline. Workplaces above a certain size must draft and file them, and employee consent is required to change them unfavorably.Ordinary WageThe amount regularly and uniformly agreed as payment for contractual work. It is the basis for calculating overtime, night-work and holiday-work premium pay.Statutory vs. Contractual Working HoursStatutory working hours are the legal ceiling on working time. Contractual working hours are the hours the parties agree to within that limit.Probation Period · Trial EmploymentA set period after hiring to confirm job fit. A probationary period that presumes permanent hiring differs in nature from a trial period that leaves the final hiring decision open.Fixed-Term Workers · The 2-Year LimitWorkers hired for a set contract period. Once they exceed the legal limit on that period, they are treated as permanent employees with no fixed term.Young Workers · Hiring MinorsRules on employing workers under 18, including the minimum employment age, limits on working hours and night work, and a ban on hazardous work.Offer Letter · Negotiating TermsThe final step of hiring: giving the selected candidate a written offer of job, grade, salary and start date, then negotiating terms until they accept.E-Contracts · E-SignaturesForming a contract by signing an electronic document instead of using paper and a seal. To be usable in practice, you must be able to prove later who signed and that the document was not altered.Renewal Expectation Right · Justified Refusal to Renew Fixed-Term ContractsA case-law doctrine: when a fixed-term worker has a reasonable expectation that the contract will be renewed, refusing renewal without a rational reason is treated like unfair dismissal. Repeated renewals, the existence of renewal criteria and the ongoing nature of the work support such an expectation.Moonlighting Bans and Side-Job Policies · Limits of Work RulesWork rules that restrict outside work during off-duty hours, and the limits of those rules. Because employees’ private lives and freedom to choose an occupation are the default, a blanket ban is hard to enforce. Restrictions are justified only for specific reasons such as interference with work, competition, or damage to the company’s reputation.
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📚Workplace Harassment Prevention and Abuse-of-Power Prevention TrainingNanum Consulting Corporate Training · On-site/OnlineView course →
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Last updated 13 Sep 2026 · Reviewed by John Kim

FAQ

The employment contract can still be formed, but failing to state working conditions and deliver a written copy as the law requires can lead to penalties. Above all, it leaves the company at a disadvantage on the burden of proof in a dispute.
The law requires you to specify the components and calculation method, and stating only a total leads to disputes over the scope of ordinary wages. It is safer to list base pay and allowances separately.
You need to redraft the contract to reflect the changes or record a supplementary agreement. For core terms such as wages and working hours in particular, document when the change takes effect and what it is.
It is useful as a basic framework, but needs supplementing depending on industry and work arrangement. For special setups such as shift work, discretionary work or on-site work, it is safer to have a labor specialist review it.