The Two-Year Limit on Fixed-Term Employment in Korea

Korean law places no restriction on a company's freedom to hire a fixed-term employee. What the law restricts instead is duration — and getting that duration wrong is one of the most common mistakes foreign-invested employers make in Korea.

The statutory rule

Article 4 of the Act on the Protection, etc. of Fixed-Term and Part-Time Employees (기간제법) permits an employer to use a fixed-term employee for up to two years. Where the relationship involves repeated contract renewals, the two-year cap applies to the cumulative period of continuous employment, not to any single contract term.

The consequence of exceeding two years is set out in Article 4, Paragraph 2: once the cumulative period crosses the two-year threshold, the employee is deemed to have entered into a contract of indefinite duration — effectively, a regular employee. This conversion is automatic by operation of law. It does not depend on the employer's intent, a court ruling, or any administrative finding. The moment the clock runs past two years without an applicable exception, the deemed-regular status attaches.

Why "fixed-term" and "two years" are not interchangeable concepts

It is worth being precise about what converts and what does not. The employee's status changes from fixed-term to indefinite-duration; this is sometimes loosely described as "regularization" or becoming 정규직, but the deemed conversion under Article 4 only addresses the absence of a contract end date. It does not, by itself, entitle the employee to the same wage scale, benefits, or job grade as employees hired directly into permanent positions, unless the company's own rules of employment or collective agreement say otherwise.

Exceptions: when two years can be exceeded without conversion

Meanwhile, there are exceptional circumstances in which an employer may use a fixed-term employee beyond two years without triggering deemed indefinite-duration status. To name a few among the list that may be relevant for a typical foreign-invested company:

• Project or task completion. Where the contract term is tied to the completion of a specific business or task — such as a construction project or a defined development project — rather than a calendar period, the exception can apply, provided the work is genuinely time-limited and not simply ordinary, recurring business.
• Filling a temporary vacancy. Covering for an employee on leave or secondment until that employee returns.
• Education or training periods. Where the fixed term corresponds to the time needed to complete a course of study or vocational training.

A practical checklist before relying on an exception

• Confirm the specific statutory or regulatory ground being relied on, and document the underlying facts (project scope and end date, qualification held, income level, age at contract signing) at the time of hiring or renewal.
• Reassess at each renewal — an exception that applied initially can lapse, for example when a substitute employee's covering assignment continues after the original employee has returned.
• Track cumulative continuous service across all contracts and assignments with the company, not just the current contract term.
• Avoid contract patterns designed primarily to interrupt continuity (for example, irregular short renewals timed just under two years) without a substantive basis, as these draw heightened scrutiny in labor inspections and disputes.

For background on how fixed-term status is distinguished from freelance arrangements, see our related post on freelancer versus fixed-term employee classification.

This article is provided for general informational purposes and does not constitute legal advice. For guidance specific to your circumstances, please consult qualified counsel. Also, please do feel free to contact us for any advice.

© 2026 SJ Chun. All rights reserved. This article may not be reproduced, copied, or republished, in whole or in part, without prior written permission from the author.