South Korea Compliance Guide: Employment & Payroll, Tax & Regulations
Key Law Terms Overview in South Korea
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Regulation Updates in South Korea
Employment Retention Subsidy
What it is: The Employment Retention Subsidy policy update expands support and introduces measures to defer employment insurance premium payments.
What it changes: It creates employer-facing changes to social contributions and payroll support eligibility by expanding the Employment Retention Subsidy and permitting deferment of employment insurance premium payments.
Who is affected:
- Employers
What employers should do:
- Note the expanded support under the Employment Retention Subsidy and the new option to defer employment insurance premium payments.
- Prepare for changes to social contribution calculations and payroll processes accordingly.
Notes: Effective month: 2026-05. Manual verification recommended.
Act on Public Holidays
What it is: The Act on Public Holidays has been amended to designate May 1 (Labor Day) as a statutory public holiday for all workers.
What it changes: Effective May 2026, May 1 is now a statutory public holiday, creating employer obligations related to holiday observance and associated holiday pay.
Who is affected:
- Workers
- Employers
What employers should do:
- Observe May 1 as a statutory public holiday for all workers
- Address holiday pay obligations in relation to May 1
Notes: Effective month: 2026-05. Manual verification recommended.
Enforcement Decree of the Employment Insurance Act and Enforcement Decree of the Wage Claim Guarantee Act
What it is: The Enforcement Decree of the Employment Insurance Act and the Enforcement Decree of the Wage Claim Guarantee Act were amended to implement new employer obligations effective from June 2026.
What it changes: The amendments bar habitual wage-defaulter employers from receiving Employment Insurance Act subsidies (including employment promotion and stabilization grants) and allow forced recovery of government-paid unpaid wages from employers without a court judgment.
Who is affected:
- Employers who are habitual wage defaulters
What employers should do:
- Monitor and ensure timely payment of wages to avoid status as a habitual wage defaulter
- Be aware that government-paid unpaid wages may be recovered from the employer without a court judgment
Notes: Effective month: 2026-06. Manual verification recommended.
Discover the latest employment and compliance updates in South Korea — helping you stay ahead in a changing regulatory landscape.