Testimonial
Manuel Ramos
TERAO ASIA
Managing Director
We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.
5/5
INS Global works as your local partner in foreign markets to provide global Human Resources services.
With the help of our experienced PEO/Employer Of Record service experts, you can find employees, set up operations, and start working in over 100 countries worldwide, all without the hassle that typically accompanies global expansion.
A PEO in South Korea provides companies with a way to simply and securely expand their operations overseas by outsourcing critical HR services to a third-party provider like INS Global. With a PEO in South Korea, companies can office compliance assurance to employees worldwide in less than 72 hours.
PEOs (Professional Employer Organization), sometimes referred to as EORs (Employer of Record), are local partners for companies that are expanding into foreign markets.
PEOs in South Korea can help these companies to outsource their HR services and enter new countries without having to deal with the complex issues that often arise.
A PEO in South Korea can legally employ your South Korean staff for your company and manage the employee services that affect daily operations. This can include tasks like payroll outsourcing and benefits, saving your company time and money that can be used in more productive ways.
Creating a new company within a foreign country can be a stressful, complex process that requires a legal entity with a physical presence in that target country.
The advantages presented by a PEO allows for a company to operate in a foreign market without forcing them to go through the necessary steps of forming and incorporating such a new entity.
A PEO Solution Can:
The Advantage in Figures
PEO/EOR
Company Incorporation
Price
80% Less Expensive
Market Entry
2-5 Days
6 Months
The expertise provided by a PEO expert in local legal requirements will ensure that your company remains compliant with every aspect of local regulations, even as they change.
Whenever simple mistakes happen within HR, it can cause a disproportionate amount of fees and fines. These mistakes are especially prominent when entering a new market. A PEO can reduce these mistakes, saving your company time and money.
PEOs provide several essential services, like payroll outsourcing, recruitment, headhunting, and contractor management. You and your employees can rest easy while PEO professionals handle these HR processes, leaving you time to focus on what really matters.
Estimated time for Company Incorporation in a new market: 4-12 months
Estimated time to establish a PEO relationship: 5 days
*Global estimate
A PEO in South Korea can handle the intricate details of HR and provide you with a single point of contact to ease the burden of HR problems and simplify the solutions.
INS Global’s PEO in South Korea manages your employee assignment and recruitment needs by following these 4 basic steps:
Manuel Ramos
TERAO ASIA
Managing Director
We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.
When entering South Korea with the intention of creating a PEO/EOR agreement, it’s necessary to first fully understand the difference between them to make sure you are making an informed decision.
In South Korea both services are indistinct according to national regulations, but INS Global can offer any elements of both according to your requirements
The main source of employment law in South Korea is derived from the Labor Standards Act (LSA). This act governs the most fundamental and important matters related to employment. These matters include working hours, wages, overtime pay, vacation, etc.
The LSA does not specifically mandate that a written contract be created for most employees. However, it does require however that the following key aspects of the employment relationship be provided in writing by the employer: wage, contractual work hours, holidays, and paid annual leave.
The LSA imposes a maximum of 40-hour work weeks and 8-hour workdays. An employee’s working time may exceed these limits if their recent work time over a longer period not exceeded 40 hours. However, this is subject to restrictions, like obtaining the consent of the employee or their legal representative. The maximum amount of hours an employee is allowed to work weekly in South Korea is 52.
Generally, employees are allowed to agree to an additional 12 hours per week of overtime. For this overtime pay, the employer will be required to pay an additional 50% of their employee’s ordinary wages. Additionally, for night work (work performed between the hours of 10pm and 6am) employers must also pay an additional 50% of wages.
Minimum paid holidays are weekly holidays (usually Sunday) and Labour Day (May 1st). Employees are entitled to an additional 50% pay for 8 hours worked during a holiday, and an additional 100% for any work that surpassed this 8-hour limit.
Employees that work for a full year are entitled to receive 15 days of annual paid leave per year. Employees that haven’t worked a full year, or have an attendance rate of less that 80%, are entitled to receive one annual paid leave day for every month of the year worked.
As of January 1st, 2022, employers with 30 or more employees are required to provide their employees with paid time off on public holidays. Public holidays designated by the government are:
These days may be subject to change on an annual basis.
In accordance with the LSA, the minimum maternity leave that can be provided is 90 days, with a minimum of 45 days taken after the birth of the child. In cases where there are multiple births, the employee is entitled to an extra 30 days.
Maternity leave is paid leave and is either paid by the employer or subsidized by the government. Additionally, women are protected from termination during pregnancy and up to 30 days following the birth of their child.
Companies are now also required to provide 10 days of paid paternity leave in South Korea, and are expected to make allowances for unpaid parental leave for both mothers and fathers.
In general, 1-month is necessary to have an employee based out abroad using an existing PEO as the employe of record. When incorporating a new subsidiary to be the employer of record, the delay varies from 4-12 months.
For a single monthly charge based on the salaries of your co-employed employees, a reputable EOR in South Korea can be your partner in handling all important HR responsibilities, such as payroll, contract administration, and guaranteeing tax compliance.
Partnering with an EOR gives you a safe, practical, and fully authorized way to relocate or hire personnel in South Korea. This employment choice can be used long-term or temporarily while you create your own company structure abroad.
Employees managed through an EOR enjoy a range of benefits, including total legal security, specialist local knowledge of all employer responsibilities, timely and accurate payroll, improved employee perks, and more.
By working with clients through an EOR, contractors gain access to all the standard benefits of an employee while still maintaining complete control over their work process.
Yes, a high-quality EOR takes into account any differences in local or regional employment regulations, meaning you are covered wherever you wish to hire or transfer your staff.
Payroll costs must include indirect expenditures like social insurance contributions, bonuses, or incentives in addition to a wage and any payments made to recruiting firms or experts.
Additionally, although they are not required, signing bonuses might make you stand out to potential new employees.
With certain EOR firms, there may be a minimum or maximum amount of employees you may hire. However, INS Global gives you the flexibility to manage as many or as few employees as your development strategy demands.
Companies registered in South Korea may need to prove a physical address. However, South Korea, like most countries during the COVID-19 pandemic, has adapted well to remote work options for employees.
Our recruitment staff members are familiar with regional customs and best practices and have access to professional networks as well as offline and internet business resources.
In South Korea, professional staffing companies or recruitment agencies typically charge a recruiting fee that is calculated as a portion of the new hire’s monthly gross compensation. INS Global is also capable of fully integrating new hires into our EOR system to offer a complete employment outsourcing package.
Yes, both South Korean nationals and international residents can benefit from INS Global’s range of recruiting, PEO, and EOR services.
South Korean employees receive their pay monthly unless otherwise specified. While there is a mandatory 13th-month bonus, many companies will offer this as a perk to remain competitive.
The employer is obliged to manage payroll taxes and social security deductions on behalf of their employees.
Currently, the South Korean minimum wage is 9620 KRW per hour (roughly equivalent to 1189 USD per month).
Many work visa types that allow an employee to operate in South Korea for more than 90 days are based around specific job types and industries. A detailed list can be found here.
All employees paid locally are required to pay income tax plus contribute to social insurances. This means that employers paying locally must also contribute towards their employees’ social insurance funds (unless their employees are specifically covered as part of a reciprocal agreement).
These insurances cover medical, retirement, employment, and accident insurance. The combined employer contribution can be as high as 30% of the employee’s salary in certain hazardous industries.
Alongside social security benefits, South Korean employment legislation guarantees employees minimum salary, maternity and paternity leave, paid time off, overtime, and leave in the event of injuries sustained in the workplace.
Changes to contracts in South Korea typically require the consent of the employee unless the change is advantageous to them. Changes that may be considered disadvantageous would be reviewed on a case-by-case basis if they are disputed.
South Korea has a universal healthcare system that generally covers 50-80% of medical expenses and is generally seen as superior to those of its neighbors. It’s funded through a combination of contributing sources including social security and surcharges on specific industries like tobacco products.
Everyone residing in South Korea for longer than 6 months is required to register for the National Health Insurance scheme.
Severance pay under the LSA is equivalent to 1 month’s salary for each year of service.
The Ministry of Labor in Korea is the governing body that regulates the application of the Labor Standards Act.
There is only 1 paid day of annual public holiday (Labor Day). However, companies with over 300 employees are obliged to provide additional paid public holidays amounting to around 11 days per year. However, many companies of less than 300 employees will offer these days as paid or unpaid leave.
Level 39, Marina Bay Financial Centre Tower 2, 10 Marina Boulevard
Singapore 018983DOWNLOAD THE INS Expansion Insights
DOWNLOAD THE PDF
