Re-hiring of employees beyond the statutory retirement age and related general practices on social insurance, severance, etc.
5/22/2026
Re-hiring of employees beyond the statutory retirement age and related general practices on social insurance, severance, etc.
For re-hire of employees under fixed-term contracts beyond the statutory retirement age, general practices in Korea are guided as follows. To avoid any labor disputes in future, this should be reviewed more thoroughly with legal advisors or labor attorneys to receive more definite guidance at the time of drafting the fixed-term contract with the employee.
1. Statutory severance payout settlement required as of the conversion date
In common practices, employers commonly hire individuals beyond their retirement ages under fixed-term or part-time arrangements, with compensation and benefits tailored to the role.
On the premise that the mandatory retirement age of 60 is stipulated in company’s written employment regulations, collective agreement or equivalent company regulations, (i) severance payout for the concerned employee’s service for the period under the permanent role should be settled and processed as of the conversion date (within 14 days from the mandatory retirement date), and (ii) the severance payout during the fixed-term contract role should be processed separately when the employee resigns from the company based on the period of continuous service counting fresh from the date of re-hire.
2. Statutory social insurance contributions after the retirement age
The employee’s age affects coverage under the four major statutory social insurances as summarized below:
a. National Pension: Contributions are not required once the employee reaches age 60 (See Notes).
b. National Health Insurance: Remains mandatory regardless of age, with standard employer and employee contributions.
c. Employment/Unemployment Insurance: Contributions are required in general (can be exempted for employees aged 65 or older at the time of new hire).
d. Industrial Accident Compensation Insurance (Workers’ Compensation): Mandatory regardless of age.
(Notes)
Individuals over the age of 60 who wish to increase their future pension benefits may apply for voluntary continued participation and continue making national pension contributions until the age of 65. However, in this case, the individual is required to pay the full 9.5% contribution solely on their own based on their standard monthly income, without any employer contribution.
For re-hire of employees under fixed-term contracts beyond the statutory retirement age, general practices in Korea are guided as follows. To avoid any labor disputes in future, this should be reviewed more thoroughly with legal advisors or labor attorneys to receive more definite guidance at the time of drafting the fixed-term contract with the employee.
1. Statutory severance payout settlement required as of the conversion date
In common practices, employers commonly hire individuals beyond their retirement ages under fixed-term or part-time arrangements, with compensation and benefits tailored to the role.
On the premise that the mandatory retirement age of 60 is stipulated in company’s written employment regulations, collective agreement or equivalent company regulations, (i) severance payout for the concerned employee’s service for the period under the permanent role should be settled and processed as of the conversion date (within 14 days from the mandatory retirement date), and (ii) the severance payout during the fixed-term contract role should be processed separately when the employee resigns from the company based on the period of continuous service counting fresh from the date of re-hire.
2. Statutory social insurance contributions after the retirement age
The employee’s age affects coverage under the four major statutory social insurances as summarized below:
a. National Pension: Contributions are not required once the employee reaches age 60 (See Notes).
b. National Health Insurance: Remains mandatory regardless of age, with standard employer and employee contributions.
c. Employment/Unemployment Insurance: Contributions are required in general (can be exempted for employees aged 65 or older at the time of new hire).
d. Industrial Accident Compensation Insurance (Workers’ Compensation): Mandatory regardless of age.
(Notes)
Individuals over the age of 60 who wish to increase their future pension benefits may apply for voluntary continued participation and continue making national pension contributions until the age of 65. However, in this case, the individual is required to pay the full 9.5% contribution solely on their own based on their standard monthly income, without any employer contribution.