Annual paid leave is intended to provide paid leave (separately from paid weekly holidays) to allow workers the opportunity to pursue good health and relaxation.

More specifically, the Constitutional Court stated the purpose for annual leave: "Rest hours or weekly holidays are primarily for the physiological recovery of workers who have accumulated physical or mental fatigue due to daily or weekly work. Annual paid leave is designed to give workers freedom from work for a period of time and to have the opportunity to engage in social and cultural civic life by providing a voluntary leave period without a loss of wages. Supreme Court ruling on May 28, 2015. 2013 hunma 619 (The purpose of annual paid leave).
The Supreme Court also explains, "It is purposed to provide an opportunity for mental and physical recreation and improve cultural access by exempting workers from the obligation to work for a certain period of time." Supreme Court ruling on Dec. 26, 2003. 2011 da 4629 (The purpose of annual paid leave).
Therefore, the objective of annual leave is to improve the quality of life of workers by providing time for rest and the pursuit of cultural life in terms of relaxation from work. Kim, Hongyoung, “Improvement of System for Annual Paid Leave to Secure Time for Rest,” Study on Labor Laws, 2016 Vol. 40, Seoul University’s Labor Law Society, p. 165.

Annual paid leave (Article 60) in the Korean Labor Standards Act prescribes the use of leave in principle, but also specifies compensation for unused days. ① As for the number of leave days and the requirements for the occurrence of annual paid leave, “An employer shall grant 15 days’ paid leave to a worker who has registered not less than 80 percent of attendance during one year (Article 1). After the first year of service, an employer shall grant one day’s paid leave for each two years of consecutive service in addition to the 15 days’ paid leave to a worker who has worked consecutively for 3 years or more. In this case, the total number of leave days including the additional leave shall not exceed 25 (Article 4). ② Regarding the use of annual leave, “An employer shall grant paid leave upon request by a worker. However, the leave period concerned may be changed, if granting the leave as requested by the worker might cause serious impediment to the operation of the business (Article 5). Paid leave can be used continuously over a certain day or several days. Here, if a worker requests a leave day by designating a desired date (a claim for leave), the employer can adjust the date of the leave in consideration of the work. ③ In relation to the guarantee of annual paid leave, the annual paid leave shall be granted as paid off-days on the normal working days of the worker (Article 5). Therefore, annual paid leave shall not be granted on weekly holidays, unpaid holidays, or other paid holidays. ④ Regarding compensation for unused annual leave, "the annual paid leave will expire if not exercised for one year" (Article 7). This means that in the event that an employee fails to use the annual paid leave, the employer shall pay the employee for the unused paid leave. Supreme Court ruling on Dec. 26, 2013. 2011 da 4629 (Unused annual leave allowance is regarded as wage.)


1. Concept

Annual paid leave shall be granted to an employee with perfect attendance for their contractual working hours during one year. This is designed to provide leave to an employee who has served his/her contractual working hours for a long duration, so he/she can recover from fatigue from extended work and refresh his/her mind and body.

LSA Article 60 (Annual Paid Leave):
① An employer shall grant 15 days’ paid leave to a worker who has registered not less than 80 percent of attendance during one year.
② An employer shall grant one day’s paid leave per month to a worker whose consecutive service period is shorter than one year or whose attendance is less than 80 percent, if the worker has offered work without absence throughout the month.
③ (Deleted)
④ After the first year of service, an employer shall grant one day’s paid leave for each two years of consecutive service in addition to the leave prescribed in paragraph (1) to a worker who has worked consecutively for 3 years or more. In this case, the total number of leave days including the additional leave shall not exceed 25.
⑤ An employer shall grant paid leave pursuant to paragraphs (1) through (4) upon request of a worker, and shall pay ordinary wages or average wages prescribed in employment rules or other regulations during the period of leave. However, the leave period concerned may be changed, in case granting the leave as requested by the worker might cause a serious impediment to the operation of the business.
⑥ In applying paragraphs (1) through (3), a period falling under any of the following subparagraphs shall be considered a period of attendance:
1. A period during which a worker is unable to work due to occupational injuries or diseases;
2. A period during which a pregnant woman does not work on leave taken pursuant to paragraphs (1) through (3) of Article 74;
3. A period during which a worker does not work on parental leave due to article 19 paragraph (1) of the Equal Employment Opportunity and Work-Family Balance Act.
⑦ The leave referred to in paragraphs (1) through (4) shall be forfeited if not used within one year. However, this shall not apply in cases where the worker concerned has been prevented from using the leave due to any cause attributable to the employer.
 Enforcement Decree: Article 33 (Payment Date of Leave Allowance)
The wages as prescribed in Article 60 (5) of the Act shall be paid on the pay day before or immediately after paid leave is granted.

as recorded 80% or higher in workplace attendance. An employer shall grant 1 holiday with pay per month of full attendance to his/her employees who have worked less than 1 year. The days an employee is absent from work due to an occupational accident, pre- and post-natal leave and childcare leave, shall be treated as days worked.
For an employee who has worked 3 years or longer, the employer shall grant an additional 1 day in paid holiday for every 2 years following the first year, with the number of additional holidays limited to 25. An employer shall grant his/her employee annual leave on the day(s) that the employee wants to use his/her annual leave. However, when the employer believes that allowing the use of annual leave on the desired day(s) would do great harm to his/her business, he/she may reschedule the timing of annual leave. An employer may have his/her employee take a day off on a particular working day in lieu of an annual leave day with pay, as long as he/she and the employee representative have reached a written agreement to do so.
Given that annual leave days may be saved for a year and can be split for use on several occasions, it is advisable that a ledger of leave days saved be recorded and maintained for each individual employee.

(2) Rights related to annual paid leave
① Right to request annual paid leave
Annual paid leave is designed to maintain an efficient labor force and provide a balanced life through the spiritual and physical rest of employees who attended work fully during the preceding year. Accordingly, an employer shall grant 15 days of paid leave to an employee who has a workplace attendance rate of 80 percent or higher over the preceding year (Article 60 (1) of the Labor Standards Act). An employee is granted the right to annual paid leave according to his/her workplace attendance rate of the preceding year.

② Right to request unused annual paid leave allowance
The right to request unused annual paid leave allowance is the right to ask for an allowance as compensation for the unused annual paid leave days if the employee provided labor service without using the annual paid leave accrued as remuneration for work for the previous year. This right occurs after the right to request annual paid leave expires. There is also the right to ask for an allowance as compensation for unused annual paid leave for the number of unused annual paid leave days due to the termination of an employment contract, for example, upon retirement. However, when the employer takes measures to promote the use of Annual Paid Leave, the right to request an allowance for unused annual paid leave expires (Article of 61 of the LSA).

③ Whether to include annual paid leave allowance into average wages when calculating severance pay
(i) Unused annual paid leave allowance already occurring before retirement
By the criteria of attendance rate during the year prior to the retirement year, 3/12 of the unused annual paid leave allowance occurring the year prior to the retirement year shall be included in the basic wage items used to calculate average wage for severance pay.
(ii) Unused annual paid leave allowance occurring only due to retirement
The unused annual paid leave allowance that the employee is granted due to retirement in the retirement year according to the attendance rate of the year before the retirement year shall not be included in the basic wage items used to calculate average wage for severance pay, because the unused annual paid leave allowance is not wages paid during calculation of average wage.

(3) Promoting the use of annual paid leave
If an employee has not used the leave days saved within the year, he/she shall be paid for the unused days of leave at average or ordinary wages, as prescribed in the rules of employment. However, if the employees have not used their annual leave despite the employer strongly promoting its use, the employer is exempted from the obligation to provide monetary compensation for the unused annual leave.

Article 61 (Measures to Urge Employees to Take Annual Paid Leave)
① Where any employee's paid leave is terminated by time limitation pursuant to the main sentence of Article 60 (7) because the employee fails to take his/her paid leave although the relevant employer has taken the measures falling under each of the following subparagraphs to urge employees to take their respective annual leave pursuant to Article 60 (1) and (4) (which excludes the monthly leave given for employees who have worked less than one year, in accordance with Article 60(2)), the relevant employer is not obligated to compensate the employee for his/her failure to take the paid leave, and the employee’s failure to take the paid leave shall be deemed not to fall under the reasons attributable to the employer provided for in the proviso to Article 60 (7):

1. Any employer shall notify in writing every employee of the number of days of his/her paid leave that has not been taken, and shall urge every employee to notify the employer of a period he/she is planning for the paid leave after determining on such period within ten days, at the six month point before the period under the main sentence of Article 60 (7) expires;
2. Notwithstanding the encouragement referred to in subparagraph 1, if the employee fails to notify the employer of a period during which he/she is planning to take all of part of his/her remaining paid leave within ten days from the date he/she is urged to take his/her paid leave, the employer shall notify the employee in writing after setting a period for his/her paid leave, by no later than two months before the period under the main sentence of Article 60 (7) expires.

② Where any employee's paid leave is terminated by time limitation pursuant to the main sentence of Article 60 (7) because the employee fails to take his/her paid leave although the relevant employer has taken the measures falling under each of the following subparagraphs to urge employees to take their respective annual leave pursuant to Article 60 (2): the monthly leave given for an employee who has worked less than one year, the relevant employer is not liable to compensate the employee for his/her failure to take the paid leave, and the employee’s failure to take the paid leave shall be deemed not to fall under the reasons attributable to the employer provided for in the proviso to Article 60 (7):
1. Any employer shall notify in writing every employee of the number of days of his/her paid leave that has not been taken, and shall urge every employee to notify the employer of a period he/she is planning for the paid leave after determining on such period within ten days, at the three month point prior to one year of his/her service;
2. Notwithstanding the encouragement referred to in subparagraph 1, if the employee fails to notify the employer of a period during which he/she is planning to take all of part of his/her remaining paid leave within ten days from the date he/she is urged to take his/her paid leave, the employer shall notify the employee in writing after setting a period for his/her paid leave, by no later than one month before the end of his/her first year.

① In the means to promote the use of leave, the employer has the right to change the date selected by the employee for the claiming of his/her leave, as the employee's leave rights are restricted since the employer shall only promote the use of leave shortly before the leave expires.

② When an employee specifies the period for using leave upon the employer's request, the specified period shall be admitted in principle, and the leave shall be effective during no other period. If the employer decides on the period instead, because the employee fails to do so, it shall also remain unchanged. However, if the employee specifies the leave period, but it is deemed to seriously impede the operation of the business to allow leave for that specified period, the period concerned may be altered.

③ Regarding promotion of the use of annual leave, it is frequent for companies to take formal measures without assigning annual leave for definite working days to employees and in this way avoid paying allowance for the unused annual leave. That is, companies promote the use of annual leave by informing through email only. In cases where the employees come to work on days designated for annual leave, companies do not pay annual leave allowance for unused annual leave owing to their efforts to promote the use of annual leave. However, as this case shows that the Company did not provide the use of annual leave on the designated days, the fact that employees could not use annual leave was due to reasons attributable to the Employer and the Employer shall pay an unused annual leave allowance.

 MOEL Guidelines
The ‘written document’ mentioned in Article 61 of the LSA refers to a paper document. Electronic documents are only possible in exceptional cases where the company has handled every operation by means of electronic documents in the process of its drafting, obtaining approval and implementing through equipped electronic work-processing systems. MOEL Guidelines: Kunjung-1128, on Feb. 7, 2012.
Accordingly, informing by email in the course of promoting the use of annual leave cannot be regarded as notification by written document. MOEL Guidelines: Kunjung-6488, on Nov. 1, 2013.

If the employee has submitted a vacation plan with stipulated dates of leave after the employer has promoted the use of annual leave, the stipulated dates of leave shall be regarded as the employee’s declaration of intention to use his/her annual leave. In cases where the employee comes to work on the stipulated date of leave, if the employer received the employee’s labor and did not express an objection to his/her coming in to work, it shall be regarded that the employer has approved the labor service on the expected date of leave, and so the employer shall pay an unused leave allowance. MOEL Guidelines: Limjang-285, on Oct. 21, 2005.


(4) Substitution of Annual Paid Leave
The employer may, through a written agreement with the labor representative, have employees take a paid leave on a particular working day in substitution of annual paid leave (Article 62 of the LSA). The particular working day means a particular day among contractual working days required for labor duty. Accordingly, the employer cannot, pursuant to Article 62 of the LSA, substitute a paid leave day with contractual holiday and leave, nor with statutory holiday and leave.

 MOEL Guidelines and Judicial Rulings
1. If an employment contract expires before the employee uses their annual paid leave, how much can he/she receive as annual paid leave allowance?
The right to use annual leave as paid days off is acquired definitely as remuneration for labor when the employee has worked for a one-year period. As soon as the employee acquired the right to annual paid leave, his employment was terminated due to retirement, etc. before using his annual paid leave. In this case, while the right to use annual paid leave requires continuous labor service, this cannot be granted due to retirement. However, the right to request annual paid leave allowance does not require continuous labor service and so shall be compensated as a paid allowance. Accordingly, the employee can request the annual paid leave allowance equivalent to the whole number of annual paid leave days unused up to the employment termination date. Supreme Court ruling on May 27, 2005, 2003Da48549, 2003Da48556.


2. Generally, absence refers to days that the employee did not, without prior authorization, provide labor on the contractual working day as decided by both labor and management MOEL Guidelines: Labor Standard-4336, on Aug. 18, 2004.

There is no regulation concerning ‘absence’ stipulated in the Labor Standards Act, but in general it means that the employee did not, without authorization, provide labor on the contractual working day on which both labor and management decided labor would be provided. However, the day or period to be excluded in calculation of the contractual working days, or deemed as attendance, shall not be deemed an absence pursuant to the following (Labor Standard 68207-709, May 30, 1997, ‘Criteria for evaluation of contractual working days and attendance’):
A. Statutory or contractual holidays (excluded from the calculation of contractual working days)
- Weekly holidays under the Labor Standards Act
- Contractual holidays under the collective bargaining agreement or the rules of employment
- Holidays or periods regarded as the equivalent of the above.
B. Day or period suspended for work duty due to special reasons
(excluded from the calculation of contractual working days)
- A period of shutdown due to a cause attributable to the employer
- A period of justifiable strike
- A period of childcare leave due to the Equal Employment Opportunity and Work-Family Balance Act
- Day or period regarded as the equivalent to the above
C. Day or period deemed as attendance by the laws or its characteristics
- A period of suspension of work due to industrial accident or a period of maternity leave
- A period of training in the reserve forces
- A period of training in civil defense or a period of mobilization
- Days off to exercise civil rights
- Annual and monthly paid leave and menstruation leave
- Other days or periods regarded as equivalent of the above

3. Providing Annual and Monthly Paid Leave to Part-time Employees MOEL Guidelines: Labor Standards, Dec. 17, 2002.

According to the related Presidential Decree (Table 1-2) to the LSA, annual and monthly paid leave for part-time employees shall be calculated by hourly units (1 hour deemed for periods shorter than 1 hour) by the following method:
Number of annual leave days for full-time employee (Part-time employee contractual working hours/Full-time employee contractual working hours) x8 hours
Contractual working hours of short-term employees or full-time employees shall be the contractual working hours per week. (However, if a part-time employee's contractual working hours are not regular, the contractual working hours shall be averaged for contractual working hours of 4 weeks).
Annual paid leave shall be granted as a one day unit, and use shall be granted according to the amount of contractual working hours.
Example) Part-time employee who works 4 hours per day and 6 days per week
- Annual leave (hours): Number of annual leave days for full-time employee (15 days) x [part-time employee's contractual working hours (24 hours) / full-time employee's contractual working hours (40 hours)] x 8 hours = 72 hours