3 Essential Checklists to Prepare Before Resigning - Cheongchul Law Firm

Hello, I am Attorney Choi Jong-ha from Cheongchul Law Firm.

It is said that every employee carries a resignation letter in their hearts. However, nowadays, resignations and job changes have become frequent. Many workers suffer losses due to ignorance of their legal rights that must be checked before resignation.

Based on years of practical experience in labor law, Cheongchul Law Firm provides detailed guidance on the 3 key points to check before resigning.

1. Confirm the Accurate Calculation of Severance Pay

Eligibility for Severance Payment and Basic Principles

All employees who work more than 15 hours a week for more than a year, irrespective of their working conditions or the size of the business, are entitled to receive severance pay. However, many workers often suffer losses because they are unaware of the correct method of calculating severance pay.

Average Wage vs Standard Wage - Key Points

Severance pay is generally calculated based on the average wage for 3 months. However, many workers overlook the point that if the average wage is lower than the standard wage, the standard wage should be applied.

Especially in workplaces where the standard monthly working hours are 209 hours (if Saturday is designated as a non-paid holiday), it is quite common for the standard wage to exceed the average wage.

Comparison of Actual Calculation Examples

Example Conditions:

• Start Date: January 1, 2015

• Resignation Date: January 1, 2025 (10 years of service)

• Monthly Base Salary: 5 million won (as of 2024)

• Standard Monthly Working Hours: 209 hours

Incorrect Calculation Method (Using Average Wage)

• 3 Months Average Wage: 15 million won ÷ 92 days = 163,043 won/day

• Severance Pay: 163,043 won × 30 days × 10 years = 48,913,044 won

Correct Calculation Method (Using Standard Wage)

• Daily Standard Wage: (5 million won ÷ 209 hours) × 8 hours = 191,387 won/day

• Severance Pay: 191,387 won × 30 days × 10 years = 57,463,459 won

The difference: a whopping 8.54 million won!

Check List for Items to Confirm Before Resigning

• [ ] Confirm our company's standard monthly working hours

• [ ] Calculate and compare standard wage and average wage

• [ ] Check the method of calculating severance pay (including retirement pensions)

• [ ] Compare the amount the company is scheduled to pay with legal standards

2. Securing Rights for Unused Annual Leave Pay

Principle of Annual Leave Pay Payment

For any unused annual leave day, it is possible to receive one day's standard wage as a payment. However, in reality, most employees do not receive this payment properly.

Traps of Annual Leave Promotion Systems

Many companies introduce 'annual leave promotion systems', but it is very rare for them to be legally implemented in practice. Courts strictly judge the lawful operation of annual leave promotion systems, making it challenging for small businesses to comply with all processes.

Scope of Claims for Annual Leave Pay at Resignation

• Statute of Limitations: Claims can be made by counting back 3 years from the point of resignation

• Scale: Based on 10 days of unused annual leave annually, the amount equivalent to one month's salary

• Resignation Before Promotion Completion: Even if the workplace uses a legitimate promotion system, there is an obligation to pay compensation for resignation before completion of the promotion

Checklist for Confirmation of Annual Leave Pay

• [ ] Check the number of unused annual leave days in the last 3 years

• [ ] Inspect the company's implementation of annual leave promotion systems

• [ ] Confirm whether annual leave pay is reflected in severance pay

• [ ] Check the schedule and method of payment

3. Reviewing Company Data Management and Non-Compete Obligations

Preventing Company Data Leakage

It is important to ensure that there are no actions that could potentially implicate the company when gathering items to take upon resignation. The leakage of internal company data can constitute breach of fiduciary duty and requires special attention.

Points of Caution

• All materials created during company work are company property

• Possession for personal use or external leakage may incur legal liabilities

• Gathering large amounts of data right before resignation can be a serious issue

Review of Non-Compete Obligations

Some companies include provisions in contracts for 'prohibition of moving to competitors for a certain period after resignation'. However, such provisions are not always valid.

Criteria for Assessing the Validity of Non-Compete Agreements

The court comprehensively considers the following factors to assess validity:

• Protected Value of the User's Interests

• Employee's Position Prior to Resignation

• Duration, Region, and Occupational Scope of the Competition Restriction

• Whether Compensation is Provided to the Employee

• Background of the Employee's Resignation

• Public Interest and Other Circumstances

If it excessively restricts the constitutional right to freedom of choice of occupation, it may be deemed invalid.

Legal Risk Checklist Before Resignation

• [ ] Check for personal ownership of company data

• [ ] Assess the presence of non-compete clauses

• [ ] Review the specific contents of the non-compete agreement

• [ ] Analyze the possibility of competition with the prospective new company

Frequently Asked Questions (FAQ)

Q1. What is the minimum working period to receive severance pay?

A: If you work 15 hours or more per week for at least a year, you are entitled to severance pay, regardless of work type or company size.

Q2. Which is more advantageous, average wage or standard wage?

A: Generally, the standard wage is often more advantageous, and legally, the higher amount must be applied.

Q3. Until when can annual leave pay be claimed?

A: Claims must be made within 3 years from the resignation date, and rights will be lost if the statute of limitations passes.

Q4. What happens if the non-compete agreement is violated?

A: It varies depending on the validity of the agreement, and if it has excessive restrictions, it may become invalid, requiring professional consultation.

Q5. What should I do if I have objections to the calculation of severance pay?

A: If it cannot be resolved after consulting with the company, consider reporting it to the labor office or taking legal action.

Professional Labor Law Consultation of Cheongchul Law Firm

Why should you choose Cheongchul Law Firm?

• Abundant Practical Experience: Expertise from lawyers who have worked in large law firms

• Systematic Approach: Providing comprehensive solutions beyond simple consultations

• Quick Response: Efficient handling tailored to resignation timelines

• Reasonable Costs: Optimal results at the best cost

Introduction to Labor Law Specialists

Attorney Choi Jong-ha

• Graduated from Seoul National University, Law Department, and Yonsei University Law School

• Specialized experience in human resources and labor at Yulchon Law Firm

• Expert in corporate legal affairs, human resources, and labor criminal law

Consultation and Inquiry Information

📞 Phone Consultation: 02-6959-9936
📧 Email: jhchoi@cheongchul.com
🏢 Visit Consultation: 7th floor, Rich Tower, 403 Teheran-ro, Gangnam-gu, Seoul
🚇 Directions: Line 2, Bundang Line Seolleung Station Exit 9 or 10

Consultation Reservation and Procedure

1. Make a prior reservation via phone or email

2. Instructions on explaining the situation and preparing materials

3. Direct consultation with a specialist lawyer

4. Presenting tailored solutions

Conclusion

Resignation is a new beginning, but it is important to properly secure your legal rights before that. Severance pay, annual leave pay, legal risk management, etc., are all complex legal issues, so it is wise to seek expert assistance.

Cheongchul Law Firm will do its best to protect the rights of employees who are about to resign based on accurate legal knowledge and abundant practical experience.

Consult Cheongchul Law Firm right now!

This content is intended for general legal information purposes, and specific legal advice for individual cases should be obtained through consultation with a specialized lawyer.