Red Flags in Korean Employment and Rental Contracts — What to Check Before You Sign

As of 2026-10-04

In Korean employment contracts (근로계약서), clauses setting penalties or pre-set damages, having the employer keep your passport or residence card, forced savings, and giving up weekly holiday pay (주휴수당) or severance pay (퇴직금) are prohibited by law and invalid. In rental contracts, a senior mortgage (근저당) registered ahead of you, special terms banning move-in registration (전입신고) or a fixed-date stamp (확정일자), deposit forfeiture clauses, and signing with someone who is not the owner are typical warning signs that you could lose your deposit.

Employment contracts — invalid or illegal clauses

Clause	Why it is a problem
You pay a penalty or damages if you quit	Setting penalties or damages in advance for breach of an employment contract is prohibited (Labor Standards Act (근로기준법) Art. 20)
The company keeps your passport, residence card, or bankbook	Employers are prohibited from keeping ID documents (Immigration Act (출입국관리법) Art. 33-2), and forced savings are also prohibited (Labor Standards Act (근로기준법) Art. 22)
No weekly holiday pay, or you give it up	Weekly holiday pay arises if you work 15+ hours a week with full attendance, and agreements to give it up are invalid (Labor Standards Act (근로기준법) Art. 55)
Severance pay included in monthly salary, or given up	Severance pay arises after 1+ year at 15+ hours a week; giving it up in advance or paying it in installments is in principle invalid (Employee Retirement Benefit Security Act (근로자퇴직급여 보장법) Art. 8)
70–80% of the minimum wage during probation	Only allowed down to 90% for 3 months, and only for contracts of 1+ year in jobs that are not simple manual labor (Minimum Wage Act (최저임금법) Art. 5)
Threats to have your visa canceled	This can be coercion that stops you from exercising your rights — consult 1345 (Immigration Contact Center)

Wages, working hours, holidays, and annual leave must be stated in writing, and the worker must be given a copy of the contract (Labor Standards Act (근로기준법) Art. 17). Do not leave them blank as "to be discussed later".

Rental contracts — signs you could lose your deposit

Sign	Why it is risky
A large mortgage (근저당) is already on the property register (등기부)	If the home is auctioned, the mortgage is paid before your deposit — compare the maximum secured amount with the market price
A special term saying not to do move-in registration (전입신고) or get a fixed-date stamp (확정일자)	Move-in registration and a fixed-date stamp are the conditions for the third-party protection and priority repayment right that protect your deposit (Housing Lease Protection Act (주택임대차보호법) Art. 3)
Full deposit forfeited if you end the lease early	Excessive penalty clauses can be judged invalid — ask for them to be removed before signing
Signing with an agent who is not the owner	Check the original power of attorney and certificate of seal impression, and send the deposit only to an account in the name of the owner listed on the property register

Checklist before you sign

Get the contract with a translation in your language, or, if you are under the Employment Permit System, check that it uses the standard employment contract (표준근로계약서) form.
Do not sign a contract with blank spaces.
For a rental, get a fresh copy of the property register (등기부등본) on the day of signing to check the owner and any mortgages.

Frequently asked questions

Do I have to follow illegal clauses in a contract I already signed?

No. Clauses that violate the law are invalid in that part even if you signed, and the legal standard applies instead.

My company will not give my passport back.

It is a violation of the Immigration Act for an employer to keep a foreigner's passport or residence card. Report it to 1345 or 1350.

I only got the contract in Korean.

Do not sign without understanding the contents. Paste it into the ToKorea contract checker or take a photo, and it will highlight risky clauses.

This article is general information, not legal advice. For your specific case, consult the Ministry of Employment and Labor (1350) or a lawyer.