• requirement , calculation of retirement pay for a foreign workers under the EPS
  • twitter
  • This is the National Labor Consultation Center.

    We would like to inform a foreign worker under the EPS  of requirement and calculation of retirement pay.


    1. Under the Employment Permit System, Departure Gurantee Insurance is an insurance an employer who hires a foreign worker must take out within 15 days of the effective date of the labor contract to secure retirement pay for the foreign worker. Any employer who has five workers or more is required to subscribe this insurance. An employer who has joined departure guarantee insurance is deemed to have set up the retirement pay scheme under the Employee Retirement Benefit Security Act.

    2. According to the Employee Retirement Benefit Security Act, when a worker who has worked one year or more retires from the workplace with five or more workers employed ordinarily, the employer who adopts a retirement pay scheme shall provide the retiring employee with 30 days or more average wage for every year of consecutive service. Here, average wage means the amount calculated by dividing the total amount of wages paid to the relevant worker during three calendar months prior to the date on which the event necessitating such calculation occurred by the total number of calendar days during those three calendar months.

    Here, the term "Years of consecutive service" means a period from the date a worker starts his/her work to the date such worker retires.

    ※ Average Wages = Total amount of wages paid for the last three calendar days/ Total number of calendar days in the last three calendar months

    Here, the term "total amount of wages" means whatever wages under the Labor Standards Act paid as a reward for labor provided during a period for calculation of average wages, which includes not only wages actually paid to a worker but wages unpaid among wages which should have been paid during the said period and refers to wages before tax credit.


    The term "total number of calendar days" means the number of days calculated retroactively to three months prior to the date on which the grounds for calculation of average wages arise and is any of the number of days from 89 to 92 days depending on the size of relevant months.

    ※ Amount of retirement pay = Amount of average wage x 30 days x {( ) years + ( ) days / 365}


    3. Given that a foreigner are a worker who came to Korea under the ployment Permit System and have worked, without deserting your job, at a workplace with five or more workers for one year or more, He/She can obtain confirmation of scheduled departure from the competent Job Center under the Ministry of Labor at the time of your departure from Korea and apply for insurance benefits to Samsung Fire & Maritime Insurance (telephone number 02-2119-2400). The insurer will directly send insurance benefits to the bank account opened by the name of the foreign worker. (In cases when a worker had to go to another workplace due to unavoidable reason after working at least one year at a workplace employing Minimum five workers, such worker may apply for insurance benefit to Samsung by obtaining confirmation of retirement from the Job Center having jurisdiction over the place of his/her previous workplace.)


    4. However, if the insurance benefit amount is less than legal retirement pay, the difference must be paid to the worker separately by his/her employer.


    5. Pursuant to Employee Retirement Benefit Security Act, the employer shall pay retirement pay to the worker within 14 days from the date of retirement. Therefore, if the employer violates the above provision, the worker can petition the labor office.

    6. As for the petition case such as the unpaid wages, even if a labor inspector requests a petitioner to appear in the labor office more than two times in order to listen to the his/her statement and if he/she does not present himself/herself, then the labor inspector may consider that the petitioner does not have intention to petition and conclude the case. In this context the petitioner can petition the labor office again, however he/she needs to know that wage claims have a negative prescription of 3 years. Therefore, if the petitioner is to leave Korea inevitably without receiving the unpaid wages, it will be a good idea to designate a proxy such as a labor attorney, your colleague at work, or a person who knows your situation well, etc.


    We hope that this counseling will help you.


    Best regards,




© Ministry of employment and Labor
708, 422 Hannuri-daero, Sejong-si, 339-012, Republic of Korea