Hagwon Hub
All articles
Blog

Reading a Hagwon Contract Before You Sign: Clauses to Check and Red Flags

Reading a Hagwon Contract Before You Sign: Clauses to Check and Red Flags

Legal disclaimer: This guide is for general informational purposes only and does not constitute legal or immigration advice. Korean labor law is applied case by case, and outcomes depend on the wording of the contract, the size of the workplace and the facts. Statutes were checked in their versions in force on November 2, 2026. For labor questions, call the Ministry of Employment and Labor on 1350. For visa questions, call the Immigration Contact Center on 1345. A certified labor attorney (공인노무사) or lawyer can review a specific contract.

This guide covers: why a signature does not make every clause enforceable, what the law requires a contract to state, how to tell who the employer really is, how to read the pay, hours and leave clauses, why a fixed penalty for leaving early is a problem and what an airfare repayment clause can lawfully do, how severance and insurance clauses go wrong, the problems with other-branch and non-compete clauses, why no one should hold a teacher's passport, a clause-by-clause checklist, how to ask for changes, and what academies can do to make contracts clear.

What signing a contract does and does not do

Short answer: A signed contract binds both sides, but it cannot take a worker below the legal minimum. Under Article 15 of the Labor Standards Act (근로기준법), any term below the Act's standards is void to that extent, and the statutory standard applies in its place. A bad clause therefore does not necessarily cost a teacher the right. It can, however, cost time and a dispute, so reading before signing still matters.

This creates a useful way to sort clauses. Some are simply unenforceable. Some are lawful but unfavorable, and a signature really does bind the teacher to them. Others are vague, and they tend to cause the most trouble because each side reads them differently.

Type of clauseExampleWhat it means in practice
Below the legal floorA fixed penalty for resigning earlyVoid to that extent, though the teacher may still have to contest it
Lawful but unfavorableLong teaching hours paid within the law, or a low salary above the minimum wageBinding once signed, so negotiate first
Vague"Other duties as required" or "housing provided"Open to dispute, so get specifics in writing

Practical tip: Treat the review as three questions for each clause: Is this lawful? Can I live with it? Would two reasonable people read it the same way? The third question catches the most problems.

What the law requires a contract to state

Short answer: Article 17 of the Labor Standards Act requires the employer to state wages, scheduled working hours, holidays and annual leave when the contract is concluded. The items on wages, hours, holidays and leave must be set out in writing, and that document must be given to the worker. For a fixed-term contract, the Fixed-Term and Part-Time Workers Act (기간제법) adds the contract period, breaks, and the place of work and duties.

Most hagwon contracts run for a fixed term, usually a year, so both sets of rules are relevant. The Enforcement Decree of the Labor Standards Act also adds the place of work and the duties to the conditions that must be specified.

ItemWhat to look forLegal hook
Contract periodExact start and end datesFixed-Term Workers Act, Article 17
WagesEach component, how it is calculated and how it is paidLabor Standards Act, Article 17
PaydayA fixed date at least once a monthLabor Standards Act, Article 43
Working hours and breaksActual start and end times, plus break timesLabor Standards Act, Article 17; Fixed-Term Workers Act, Article 17
Holidays and leaveWeekly days off, public holidays and annual leaveLabor Standards Act, Article 17
Place of work and dutiesNamed workplace and the actual jobEnforcement Decree, Article 8; Fixed-Term Workers Act, Article 17

Failing to meet Article 17 can bring a fine of up to ₩5 million. Article 19 also gives teeth to what the contract says: where the stated conditions turn out to differ from the facts, the worker may claim damages and may immediately terminate the contract. If the contract ends that way, and the worker changed residence for the job, the employer must pay travel expenses for the return home under Article 19(2). A teacher at a workplace with four or fewer employees should confirm with 1350 how far this second paragraph applies.

The Ministry of Employment and Labor publishes standard employment contract forms (표준근로계약서). A hagwon does not have to use the ministry's form, but it is a useful comparison when a contract seems to leave something out.

Practical tip: Keep a signed copy of the final version, not only the draft sent by email. Article 17 requires the document to be delivered to the worker, and a labor office or immigration officer can only act on what can be shown.

Who the employer really is

Short answer: The name on the contract should match the registered academy and the employer on the visa paperwork. An E-2 holder may work only at the designated workplace under Article 18(2) of the Immigration Act (출입국관리법). A mismatch between the signing company, the business that pays and the school where the teaching happens is a question to settle before signing.

Many hagwons use a brand name that differs from the legal name of the operating entity, and franchises can add a further layer. That is not itself a warning sign. The concern is a contract that names one entity, with visa documents naming another and a daily workplace under a third.

Checks a teacher can make

  • Legal name and registration. Ask for the academy's registered name and its business registration number (사업자등록번호), then check that the same details appear on the contract.
  • Education office record. The NEIS hagwon service (hakwon.neis.go.kr) includes a public lookup for registered academies, showing details such as location, phone number and subjects. The site is in Korean.
  • Delinquent employer list. The Ministry of Employment and Labor publishes names of certain employers with repeated wage convictions under Article 43-2 of the Labor Standards Act. The test is narrow, so absence from the list proves little, but presence is significant.
  • Employee count. Ask how many people the workplace employs, because several protections depend on it, as the next section explains.

Why workplace size changes how to read a contract

Short answer: The Labor Standards Act applies in full to workplaces with five or more regular employees. At four or fewer, only part of it applies. Protection against dismissal without just cause, the overtime premiums and statutory annual leave do not apply there. Minimum wage, severance, written terms and the ban on penalty clauses still do.

Protection5 or more employees4 or fewer
Written statement of working conditions (Article 17)AppliesApplies
Ban on penalty clauses (Article 20)AppliesApplies
Notice of dismissal or pay in lieu (Article 26)AppliesApplies
Just cause for dismissal (Article 23(1))AppliesDoes not apply
50 percent overtime, night and holiday premiums (Article 56)AppliesDoes not apply
Statutory annual leave (Article 60)AppliesDoes not apply
Minimum wageAppliesApplies
Severance after a yearAppliesApplies

At a small academy, the contract is often the only source of a benefit such as paid leave. A promise made there can be enforced as a contract term, so it is worth having it in writing. The size rules and their effect on hours are explained further in the guide to unpaid overtime, and their effect on leave in the guide to annual leave and public holidays.

Practical tip: Ask, "How many employees work at this business, including Korean staff and part-timers?" It is a neutral question, and the answer changes how every later clause should be read.

Reading the pay clause

Short answer: The clause should say the gross monthly salary, each allowance, the payday and how pay is delivered. Wages must be paid directly to the worker, in full and in money, at least once a month on a fixed date, under Article 43. For 2026, the minimum wage is ₩10,320 per hour, or ₩2,156,880 a month on the standard 209-hour basis (rising to ₩10,700 an hour, or ₩2,236,300 a month, from January 1, 2027), and any pay should be tested against the hours actually required.

The minimum wage test is what catches long schedules. A salary that looks acceptable for a 40-hour week can fall short once required hours beyond that are added.

Questions the pay clause should answer

  • Gross or net? A salary quoted "after tax" invites a dispute about who bears tax and insurance changes. A gross figure with stated deductions is clearer.
  • Are bonuses part of the salary? A bonus "at the academy's discretion" is not the same as a fixed entitlement. Get the condition, amount and date in writing.
  • Are deductions described? Lawful statutory deductions are normal. A deduction for things like a late arrival, a parent complaint or a missed target needs careful scrutiny, because wages must be paid in full unless a law or collective agreement says otherwise.
  • Will a payslip be provided? Article 48 requires a wage statement to be given at the time of payment.

Advance pay and held-back salary

Article 21 bars an employer from offsetting an advance made on condition of working against wages. Holding back the first or last month as a "deposit" raises problems with Article 43's full-payment rule, and Article 22 bars forced savings arrangements attached to an employment contract. Both are reasons to query any clause that makes a teacher's own earnings conditional on staying.

Freelance contracts

A contract that calls a full-time teacher a "contractor" or deducts 3.3 percent tax needs close attention. The Supreme Court has held that worker status depends on the substance of the relationship rather than the form of the contract, and it applied that test to find that lecturers at a university entrance academy were workers (Decision of December 7, 2006, case 2004다29736). The tax side is covered in the guide to income tax.

Wording in the contractWhy to pauseBetter wording
"Salary ₩X, net"Unclear who bears tax and insurance changesGross monthly salary, with statutory deductions listed
"Bonus at the director's discretion"May never be owedAmount, condition and payment date
"₩X deducted for each late arrival"A fixed deduction from pay raises Articles 20 and 43 issuesPay for time worked; discipline dealt with separately
"Last month's salary paid after the replacement starts"Final pay is due within 14 days of leaving unless both sides agree to extendFinal pay within 14 days under Article 36

Reading the hours and duties clause

Short answer: "Teaching hours" and "working hours" are different things. The clause should say both the teaching load and the on-site working hours, and it should say what counts as extra work and how it is paid. Time required by the employer for preparation, meetings and events can count as working time, even if it is not classroom time.

Hours disputes often come from a clause such as "30 teaching hours per week" that is silent about the rest of the day, along with "other duties as assigned". The fix is to ask for a sample weekly schedule and to make sure the contract's hours are consistent with it.

  • Start and end times. Exact times are better than a weekly number alone.
  • Class length. A contract that counts 40-minute classes as one "hour" produces a very different load from one that counts clock hours.
  • Saturdays and events. Saturday classes, open days, and school trips should be listed or paid as extra.
  • Preparation. Lesson plans, grading, reports, phone calls and materials: does the employer require them on site, and when?
  • Breaks. Article 54 requires at least 30 minutes of break during a four-hour period and at least an hour during an eight-hour period. Back-to-back classes with no break are worth asking about.

A clause that says the salary already includes overtime is the comprehensive wage arrangement (포괄임금제), which Korean courts accept only in limited situations. The full explanation, with how to calculate what is owed, is in the guide to unpaid overtime.

Practical tip: Ask, "Could you send a typical weekly timetable for this position, with the arrival and leaving times?" A real timetable tests the contract's numbers better than any general reassurance.

Penalty clauses and early departure

Short answer: Article 20 prohibits contracts that fix in advance a penalty or an amount of damages for failing to perform the employment contract. A clause charging a set sum for resigning early is therefore a serious red flag. That does not make early resignation free of all consequences, because proven actual damage can still be claimed, and a repayment agreement for genuine costs may survive in some cases.

The leading authority is a Supreme Court decision of October 23, 2008 (case 2006다37274). The court held that an agreement to pay a fixed sum for leaving before an agreed period, regardless of whether any damage occurred or how much, is invalid. It also said that an arrangement can be valid where the employer actually spent money on training that was partly for the worker's benefit, the worker agrees to repay it unless they stay for a set period, and the period and amount are reasonable, so the arrangement does not unfairly force the worker to stay.

What that means for common hagwon clauses

ClauseAssessment
"Teacher pays ₩3,000,000 if leaving before 12 months"Fixed sum regardless of actual damage, a clear Article 20 problem
"One month's salary forfeited without 60 days' notice"Forfeiting earned wages raises both Article 20 and Article 43 problems
"Teacher pays the cost of recruiting a replacement"Likely a problem if set in advance; actual proven damage is a separate question
"Airfare is repaid in proportion if leaving within six months"Not automatically void or valid. An actual cost, a reasonable period and an amount reducing over time make it easier to defend, but no decision found for this exact clause
"Training fee of ₩X repayable"Needs real training, a real cost and a reasonable period, and teachers should ask for evidence of the cost

Early resignation is still not risk-free

A fixed-term contract is a commitment. Under Article 661 of the Civil Act (민법), either side may end a fixed-term employment contract for an unavoidable reason, but a party at fault must compensate the other. An employer could therefore, in principle, try to prove real damage. Early departure also has visa consequences that do not depend on the labor law at all, which are explained in the guide to changing hagwons on an E-2 visa.

Practical tip: Ask for a repayment clause to name the actual cost, reduce by month, and carry no extra charge. Then ask whether the repayment will be deducted from wages or paid separately, and get that answer in writing, too.

Probation, termination and notice

Short answer: A probation clause is normal, but it should state its length and pay, and any dismissal still has to follow the law. The employer must give 30 days' notice of dismissal or pay 30 days of ordinary wages instead, except for workers employed under three months and a few other cases. At five or more employees, dismissal also needs just cause and written notice of the reason and timing.

Probation pay is the most common trap here. The reduced minimum wage rate is available only under strict conditions, set out with the rest of the rules in the guide to probation clauses.

Things to look for

  • Termination that only runs one way. A clause that allows the academy to dismiss "at any time" while requiring long notice from the teacher does not override statutory protections, but it does reveal how the academy may behave.
  • "Enrollment falls" clauses. A clause allowing termination if student numbers drop should be read closely. At five or more employees, a contract clause does not remove the just-cause and dismissal rules.
  • Visa consequences. The employer must report a dismissal, departure or a material change in the employment contract to immigration within 15 days, under Article 19 of the Immigration Act. A teacher should know the actual end date recorded.

Renewal

Renewal terms should say how much notice each side gives and how pay changes. The 2006 Supreme Court decision on academy lecturers is also relevant here: it found that lecturers on repeated annual contracts had continued employment across gaps and were in substance not on fixed terms, so a refusal to renew was treated as a dismissal. The facts in that case were specific and cannot be assumed to apply to every teacher, but it shows why a pattern of renewals may carry legal weight.

Severance, pension and insurance clauses

Short answer: A worker who has at least a year of continuous service, working 15 or more hours per week on average, is entitled to retirement benefits under the Employee Retirement Benefit Security Act (근로자퇴직급여 보장법). Severance is generally paid within 14 days of leaving. A clause that bundles severance into monthly salary is a red flag, because the Supreme Court has treated such an agreement as invalid.

In the leading decision (en banc, May 20, 2010, case 2007다90760), the court said an agreement to pay severance in advance with the monthly wage breaches mandatory law and is invalid. That is not an entirely clean win for the worker: money paid as "severance" under such a clause may be treated as unjust enrichment that the employer can seek back, with set-off limited. A teacher who sees such a clause should get advice instead of assuming everything comes out ahead.

ClauseWhy it mattersWhere to read more
"Severance is included in the salary"Invalid as a severance payment under the 2010 decisionSeverance guide
Contract of 11 months, or ending just short of a yearA year of continuous service is the threshold; ask why the term is shorterSeverance guide
"Teacher pays both shares of pension or health insurance"Contributions are normally shared with the employer, so ask for the basis in writingPension guide, health insurance guide
Insurance not mentioned at allEnrollment is a statutory question, and silence should be cleared upHealth insurance guide

Practical tip: After starting work, check the actual enrollment rather than relying on the contract's wording. A payslip showing deductions is not the same as proof that the academy has paid them, as explained in the guide to academy closures and unpaid wages.

Housing, branches and non-compete clauses

Short answer: These three clauses cause trouble because of what they leave out. A housing clause should say who pays the deposit and each bill. A clause allowing work at "any branch" collides with the rule that E-2 teachers work at a designated workplace. A non-compete is only valid within limits the Supreme Court has set out, and a clause covering a wide area and a long period is open to challenge.

Housing

"Housing provided" is not enough. The contract or a written side note should say whether the academy or the teacher holds the lease, who pays the deposit, which charges fall on the teacher, what the condition is on arrival, and what happens at the end of the contract. Housing allowance should be stated as an amount, along with whether it is taxed and paid as part of wages. See the guide to housing deposits and the guide to utility bills.

Other branches and outside work

Article 18(2) of the Immigration Act says a foreign national with work status may not work anywhere other than the designated workplace, and Article 21 requires prior permission from the Justice Ministry to change or add a workplace, unless a specified exception allows a report instead. A clause saying "the teacher may be assigned to any branch or affiliated school" should prompt a direct question: is each location properly registered for this teacher's visa? Check with 1345 before teaching at another site. The risk falls on the teacher as well as the employer.

Non-compete clauses

A clause may say a teacher cannot work at a nearby academy for a year after leaving. In a March 11, 2010 decision (case 2009다82244), the Supreme Court said such agreements are invalid under Article 103 of the Civil Act where they excessively limit freedom to choose a job or free competition. The factors include a protectable employer interest, the worker's position, the period, area and type of work restricted, whether compensation was provided, how the worker left, and the public interest. No decision was found on the exact case of an E-2 teacher, so the outcome will depend on the facts. A clause with no compensation and a broad area is harder for an employer to defend, but a teacher should not assume it can be ignored.

Passport holding and other hard stops

Short answer: A few things should stop a signature altogether. Under Article 33-3 of the Immigration Act, no one may take a foreign national's passport or alien registration card as security for an employment contract or debt, or force someone to hand it over. A demand to keep either document, a contract that the academy will not provide in advance, or a demand for payment before hiring should all be taken seriously.

There is a legitimate difference between making a copy and keeping the original. Under the Hagwon Act (학원법), an academy hiring a foreign instructor must collect and check documents, such as a health report, degree certificate, and passport and visa copies. That is a reason for copies, and it is not a reason for an employer to hold the original.

Hard stopWhyWhat to do
Employer will keep the passport or ARCProhibited by Immigration Act Article 33-3Refuse; offer a copy; call 1345
No written contract before arrivalCannot check any term; Article 17 needs one at signing anywayDo not travel or resign from a current job until it arrives
Contract, visa sponsor and workplace do not matchE-2 status relates to a designated workplaceAsk for the correct details and verify with 1345
Pressure to sign immediatelyPrevents review; a real employer can usually allow time to readAsk for a reasonable deadline, and treat refusal as information
Payment demanded by the employer for a hiring stepUnusual; at 30 or more employees, the Fair Hiring Act limits hiring costs passed to applicantsAsk what it is for, in writing, and consider walking away

A clause-by-clause checklist

Short answer: Read the contract in one sitting with the checklist below, marking each item as clear, unclear or missing. Anything unclear or missing goes into one email to the academy. The aim is one clean list and a clear written answer to each point, not a long negotiation.

  1. Identify the parties. Compare the employer's name, registration number and address with the visa paperwork and any public lookup.
  2. Check the dates. Confirm the start and end dates, and whether any unpaid time is expected before the start date.
  3. Test the pay. Identify gross salary, allowances, payday and deductions, then test the salary against the expected hours and the 2026 minimum wage.
  4. Test the hours. Compare the clause with a sample timetable, including preparation, Saturdays and events.
  5. Find out the workplace size. Ask how many employees there are, and reread the leave, overtime and dismissal clauses with the answer in mind.
  6. Read leave. Identify days off, public holidays, annual leave and sick leave, and how each is requested.
  7. Check probation and termination. Check the length, the pay, notice on each side and any repayment.
  8. Search for money flowing out. Search for penalty, deduct, forfeit, repay, compensate, 위약금 and 손해배상.
  9. Check severance and insurance. Confirm severance is separate from salary and which insurances apply.
  10. Read housing. Confirm the deposit, who holds the lease, bills, condition and move-out.
  11. Check location and exclusivity. Note other branches, outside events and post-employment limits.
  12. Compare languages. If there are English and Korean versions, compare the numbers and clauses and ask which one prevails.
  13. Keep the file. Save the signed contract, the job posting, the timetable and every written promise.

Practical tip: Search the Korean version for the numbers in the English one. A mismatched salary, date or notice period takes only a minute to find, and it can be raised before anyone is committed.

How to ask for changes

Short answer: Send one calm email that lists each clause and the exact change or question. Tie every request to clarity or to the law rather than to suspicion, and ask for changes to be made in the contract, not promised verbally. How an academy responds to a polite list is itself useful information.

A simple structure works: quote the clause, ask the question, propose wording. For example: "Clause 8 says a teacher pays ₩2,000,000 if leaving before 12 months. Could this be replaced with repayment of the actual airfare, reducing each month? I would like to confirm the wording before signing."

  • Ask for the change in the contract. Verbal assurances may be sincere, but the director or manager can change, and the paper stays.
  • Accept a side letter if needed. Where a template cannot change, a signed addendum may do the same job.
  • Do not resign first. Keep any current job and do not buy a ticket until the final contract is signed.
  • Use a neutral source if a clause seems unlawful. 1350 can give general guidance, and a certified labor attorney can review the document itself.

For academies

Short answer: A clear contract is one of the cheapest ways to avoid labor disputes and teacher turnover. Most problems described above come from templates that were copied, never reviewed, and written in language neither side fully understands.

  • Use the full legal terms. State wages by component, hours, breaks, holidays, leave, workplace and duties, and give the teacher a signed copy.
  • Remove fixed penalties. Set amounts for leaving early create risk under Article 20. Where real costs are involved, get advice on a reasonable, documented repayment structure.
  • Do not hold documents. Take copies of what the Hagwon Act requires, and return originals straight away.
  • Separate severance from salary. Pay retirement benefits on departure under a proper plan.
  • Attach a sample timetable. It prevents most hours disputes and helps with overtime records.
  • Check the employee count. Know which rules apply to the business, and calculate that number by the statutory method.
  • Keep Korean and English aligned. Check the two versions line by line and state which one prevails.
  • Report changes on time. Immigration requires reports of departures and material contract changes within 15 days.

Common problems and what causes them

ProblemCauseWhat works
Hours far above what was expectedContract gives teaching hours onlySample timetable and stated on-site hours before signing
Bonus never paidDiscretionary wordingWritten amount, condition and date
Severance disputedBundled into salary or a contract just under a yearSeparate clause; ask 1350 and read the severance guide
Bills and deposit disputes"Housing provided" with no detailsWritten housing terms and move-in photos
Salary withheld for leavingForfeit or penalty clauseKeep records and contact 1350; a clause does not override the wage rules
Sent to teach at another site"Any branch" clauseConfirm visa coverage with 1345 first
English and Korean versions differTranslation not reviewedCompare numbers line by line and fix before signing
Promise from the interview not honoredIt never reached the contractGet it into the contract or a signed addendum

Frequently asked questions

Can a hagwon fine a teacher for breaking a contract?
A clause fixing a penalty or damages amount in advance is prohibited by Article 20 of the Labor Standards Act. A claim for actual proven damage is a separate matter, and early departure can also affect the visa.

Is a contract in Korean only valid?
The rules checked here do not make a contract invalid simply for being in Korean. A teacher should get a translation before signing and, where there are two versions, ask which one prevails.

Is a clause requiring repayment of airfare legal?
It depends on the wording and facts. No decision on this exact clause was found. Under the Supreme Court's 2008 approach, a fixed penalty is a problem, whereas repayment of a real cost on reasonable terms is easier to defend.

Can a hagwon keep my passport?
No one may take a passport or alien registration card as security for an employment contract, under Article 33-3 of the Immigration Act. An academy may need copies for its hiring records.

Does a teacher lose severance if the contract is 11 months?
Retirement benefits generally depend on at least a year of continuous service. A short term or repeated contracts may raise further questions about continuity, so ask 1350 about specific facts.

Is it legal for severance to be included in monthly pay?
The Supreme Court held in 2010 that an agreement to pay severance in advance with monthly wages is invalid. The money paid may raise a separate unjust enrichment question, so get advice on the facts.

Can a hagwon stop a teacher from working at a competitor?
A non-compete may be enforceable only within limits. Courts look at the employer's interest, the teacher's position, the time, area and work restricted, whether compensation was paid, and how the teacher left.

What does "other duties as assigned" mean?
It has no fixed legal meaning, so ask for examples. Time spent on required duties can count as working time, and work must still stay within the visa's scope.

Can a teacher be sent to another branch?
Only with proper immigration coverage. Article 18(2) limits work to the designated workplace and Article 21 governs changes and additions, so check with 1345 first.

What if the contract differs from the job posting?
The contract is what is generally enforced, so fix the difference before signing. If stated conditions turn out to differ from the facts, Article 19 provides remedies. For larger employers, the Fair Hiring Act also limits unfavorable changes after a job posting.

The short version

A signature does not make an unlawful term enforceable, but it does bind a teacher to a lawful bad deal. So the job is to find out which clauses are which before signing.

The clauses that matter most are pay, the hours actually required, any money flowing back to the academy, severance, housing, and the workplace named for the visa. Employee count changes the meaning of several of them.

Fixed penalties, passport holding and severance bundled into salary are the clearest warnings. Vague words are a quieter risk, and they are often easier to fix.

The single most useful action is to send the academy one polite email, before signing, listing every unclear clause and asking for the answer to be written into the contract.

Sources

For pay reductions during a trial period, see the guide to probation clauses. For extra hours, see the guide to unpaid overtime. If pay stops, see the guide to academy closures and unpaid wages. For moving between employers, see the guide to changing hagwons on an E-2 visa.

Teaching in Korea, or about to?

Find jobs, ask the community and join meetups in the Hagwon Hub app.

Download on theApp Store