What Korean law says about severance pay, pension refunds and visa status for English instructors leaving private academies in Korea
When a private English academy in South Korea abruptly terminated a 30-year-old American instructor’s contract, her first thoughts were about her visa and pay.
“I remember going blank, thinking about what was going to happen to my visa, and whether I would be able to receive my severance pay,” said the instructor, who asked to remain anonymous.
Her concerns are shared by many foreign national teachers working in South Korea. As of 2024, 13,443 instructors were residing in the country under the E-2 English Instructor visa.
Online communities — including Reddit and Facebook groups for foreign teachers — are often filled with questions about contracts, labor laws and visa rules when instructors leave their jobs.
Below are some of the most frequently asked questions and what Korean law says about them.
Severance pay eligibility
“I am planning on staying the full year, but I may want to leave early for personal reasons. How would my severance pay work?” one instructor wrote in an online forum.
Under South Korea’s Labor Standards Act, employees become eligible for severance pay after working at least one year at the same workplace. The payment is typically calculated as the equivalent of at least 30 days of an employee’s average wages for each year of continuous service and must be paid within 14 days after the employee leaves the company.
Legal experts say the rule applies equally to foreign and Korean workers.
“Korean law guarantees foreign workers the same labor protections and compensation as Korean nationals,” said Kwon Kyu-bo, vice managing partner at Majung Law Firm. “That includes severance pay.”
Foreign teachers qualify for the benefit as long as they have worked full-time for at least one year, typically averaging more than 15 hours per week. Still, some instructors say private academies have ended contracts shortly before the one-year mark, a move that could allow employers to avoid paying severance.
Legal experts say such cases may still be challenged.
“Sometimes academies terminate contracts around the 11-month mark specifically to avoid paying severance,” Kwon said. “If it is clear that the contract was ended to evade that obligation, instructors may be able to pursue legal remedies.”
Pension refunds
Foreign teachers may also be eligible for a lump-sum refund of their national pension contributions, which includes both employee and employer payments as well as interest.
Pension refunds are separate from severance pay, meaning instructors may receive both if they were enrolled in the pension system. Employees and employers typically each contribute 4.5 percent of wages to the National Pension Service.
Foreign nationals from countries that have reciprocity agreements with Korea, including the United States, Canada and Australia, may apply for a lump-sum refund when permanently leaving Korea.
Applications can be submitted shortly before departure or after leaving the country through an overseas application. However, some academies fail to enroll foreign instructors in the pension program, which legal experts warn is illegal.
“For instructors on E-2 visas, enrollment in the national pension system is mandatory, except in some special cases,” Kwon said.
“Unpaid contributions could be collected retroactively if the employer failed to enroll the teachers, and the issue is reported."
Visa status after leaving a job
Many instructors also express confusion about what happens to their visa after leaving their job.
“The E-2 visa is tied to a specific employer,” Kwon explained. “If the employment relationship ends and the employer reports it to immigration authorities, the teacher’s stay may be shortened or otherwise affected.”
However, employers do not have the authority to directly cancel a teacher’s visa. Instead, academies may report the termination of employment to immigration authorities, which can then review the instructor’s visa status.
Teachers may apply to switch to a job-seeking visa (D-10) while searching for a new position.
Lawyers note that switching to a D-10 visa is generally possible if the instructor does not have any criminal records and if the employment relationship has formally ended.
Switching jobs
Another frequent source of confusion among foreign instructors is the so-called "letter of release."
A letter of release is a document stating that the employer consents to the instructor transferring to another workplace before the contract period ends.
Many teachers believe that obtaining a letter of release from their current employer is legally required in order to move to another workplace. Immigration experts, however, say the reality is more nuanced.
According to Park Bum-il, a lawyer at Law Firm Global, instructors typically need their employer’s consent to transfer.
“The E-2 visa is issued based on sponsorship by a specific employer,” said Park. “Because of that structure, transferring to another workplace usually requires cooperation from the current employer.”
Without such consent, transferring an E-2 visa directly to another academy may become difficult, immigration lawyers say. However, legal experts note that the requirement is administrative rather than a labor law issue.
“Not receiving the letter could be disadvantageous,” Kwon said. “However, instructors may still be able to find a new job even if the employer does not cooperate.”
Lawyers note that switching to a D-10 before searching for a new academy to transfer to could be an alternative if one is unable to obtain a letter of release.
Handling disputes
Legal experts say instructors who believe they were unfairly dismissed or denied wages can file complaints with labor authorities.
“In cases involving unpaid wages or unfair dismissal, teachers can seek remedies through the Labor Office or the Labor Relations Commission,” Kwon said.
She added that carefully reviewing employment contracts before signing is one of the best ways to avoid problems later.
“It is important to ensure that the contract accurately reflects the work you will actually perform,” she said.
seungku99@heraldcorp.com
