MINIMUM WAGE ACT [See entire ACT]

CHAPTER Ⅱ Minimum Wage

Article 4 (Criteria for Determination and Classification of Minimum Wage)

(1) The minimum wage shall be determined taking into account the cost of living of employees, the wages of similar employees, the labor productivity, the distribution of income, etc. In such cases, the minimum wage may be determined by type of business.

(2) The classification by type of business under paragraph (1) shall be determined by the Minister of Employment and Labor, subject to the deliberation by the Minimum Wage Commission under Article 12.

[This Article Wholly Amended by Act No. 8964, Mar. 21, 2008]

Enforcement Ordinance

Article 2 Deleted.

Article 2 Deleted.

Article 5 (Minimum Wage Amount)

(1) The minimum wage (referring to the smallest amount of wage set out in law; hereinafter the same shall apply) shall be expressed in hourly, daily, weekly, or monthly terms. In such cases, where the minimum wage is determined in daily, weekly, or monthly terms, the amount shall also be expressed as an hourly rate.

(2) The minimum wage different from that set forth in paragraph (1) may be offered to a person for whom three months have not passed since the beginning of his/her probation at work under a one-year or longer labor contract, as prescribed by Presidential Decree: Provided, That this shall not apply to those engaged in simple labor falling under any of the job categories determined and publicly notified by the Minister of Employment and Labor.

(3) Where wages are usually fixed on a piecework basis or in any other similar manner, and where it is deemed inappropriate to determine the minimum wage in the manner prescribed in paragraph (1), the minimum wage may be determined separately for each piecework, as prescribed by Presidential Decree.

[This Article Wholly Amended by Act No. 8964, Mar. 21, 2008]

Enforcement Ordinance

Article 3 (Minimum Wage Amount for Employees on Probation)

Pursuant to the main sentence of Article 5 (2) of the Minimum Wage Act (hereinafter referred to as the "Act"), an employee who signed a labor contract for at least one year period and has been on probation for not longer than three months shall receive the amount obtained by subtracting 10/100 from the minimum hourly wage under the latter part of paragraph (1) of the same Article (referring to the amount set as minimum wage; hereinafter the same shall apply) as his/her minimum wage.

[This Article Wholly Amended by Presidential Decree No. 28711, Mar. 20, 2018]

Enforcement Ordinance

Article 4 (Special Cases on Decision of Minimum Wage Amount for Piecework System)

Pursuant to Article 5 (3) of the Act, where wages are ordinarily fixed on a piecework basis or in any other similar manner, if it is difficult to calculate the number of working hours or if it is deemed inappropriate to determine the minimum wage amount in the manner prescribed in paragraph (1) of the same Article, the minimum wage amount shall be determined on the basis of output or performance of the employee concerned.

[This Article Wholly Amended by Presidential Decree No. 21572, Jun. 26, 2009]

Enforcement Ordinance

Article 5 (Conversion of Wages for Application of Minimum Wage)

(1) If a unit period used to determine the wages of an employee is different from the unit period used to determine the minimum wage applied to the employee, the employee’s wages shall be converted into an hourly wage rate pursuant to the following classifications:

1. As to the wages determined on a daily basis: The amount divided by the contractual working hours per day;

2. As to the wages determined on a weekly basis: The amount divided by the standard hours for applying minimum wages per week (referring to the hours aggregating the contractual working hours per week and the paid hours under Article 55 (1) of the Labor Standards Act);

3. As to the wages determined on a monthly basis: The amount divided by the standard hours for applying minimum wages per month (referring to the hours divided by 12 after multiplying the standard hours for applying minimum wages per week under subparagraph 2 and the average number of weeks for a year);

4. As to the wages determined on a certain period basis other than hour, day, week, or month: The amount calculated mutatis mutandis pursuant to subparagraphs 1 through 3.

(2) For wages fixed on the basis of output or on a piecework basis, the wage per hour shall be calculated by dividing the total amount of wages during a wage calculation period (if a wage closing date exists, referring to the wage closing period; hereafter the same shall apply in this paragraph) by the number of total working hours during the wage calculation period.

(3) If any employee’s wages consist of two or more kinds of wages determined by paragraph (1) or (2), the wage per hour for the employee shall be the total of wages converted under the respective provision for the relevant portion.

(4) If the contractual working hours per the unit period used to determine the wages of an employee is different from the working hours per a unit period used to determine the minimum wage applied to the employee, the employee’s wages shall be converted to the wage per hour under the classifications of each subparagraph of paragraph (1).

[This Article Wholly Amended by Presidential Decree No. 21572, Jun. 26, 2009]

Article 5-2 (Conversion of Wages for Application of Minimum Wage)

Where the unit period used to determine the wage of an employee subject to the minimum wage is different from the unit period used to determine the minimum wage under Article 5 (1), the methods to calculate the wage of the relevant employee on the basis of the unit period of the minimum wage shall be prescribed by Presidential Decree.

[This Article Wholly Amended by Act No. 8964, Mar. 21, 2008]

Article 6 (Effect of Minimum Wage)

(1) Each employer shall pay employees covered by the minimum wage, at least the minimum wage amount or more.

(2) No employer may lower the previous wage level on the ground of the minimum wage determined under this Act.

(3) Where a labor contract between an employer and an employee covered by the minimum wage provides for a wage below the minimum wage amount, the relevant stipulation concerning the wage shall be null and void and the invalidated part shall be considered to stipulate that the same wage as the minimum wage amount determined under this Act shall be paid.

(4) Wages regularly paid at least once per month shall be included in the wages referred to in paragraphs (1) and (3): Provided, That none of the following wages shall be included:

1. Wages, other than those paid for the contractual working hours under Article 2 (1) 8 of the Labor Standards Act (hereinafter referred to as "contractual working hours") or the contractual working days, which are prescribed by Ordinance of the Ministry of Employment and Labor;

2. Bonuses and others equivalent thereto, which amount to 25/100 of the monthly conversion amount calculated based on the hourly minimum wage amount of the relevant year, among the monthly payment amount of wages prescribed by Ordinance of the Ministry of Employment and Labor;

3. Any of the following wages for subsidy for living or welfare of employees, such as food, accommodation, and transportation expenses:

(a) Wages, other than those paid in a currency;

(b) Parts corresponding to 7/100 of the monthly conversion amount calculated based on the hourly minimum wage amount of the relevant year, among the monthly payment amount of wages paid in a currency.

(5) Notwithstanding paragraph (4), the scope of wages included in the minimum wage of drivers in taxi transport business pursuant to Article 3 of the Passenger Transport Service Act and subparagraph 2 (c) of Article 3 of the Enforcement Decree of the same Act shall be wages prescribed by Presidential Decree other than the wages calculated on the basis of the output.

(6) Paragraphs (1) and (3) shall not oblige any employer to pay wages for the hours or days which an employee has not worked due to any of the following reasons:

1. Where an employee has not worked the contractual working hours or contractual working days due to the employee’s own reason;

2. Where an employer has not let an employee work the contractual working hours or contractual working days for a justifiable reason.

(7) In cases of performing a project on a piecework basis, when a contractor pays employees wages below the minimum wage amount due to any reason for which a contractee is liable, both the relevant contractee and contractor shall be jointly and severally liable therefor.

(8) The scope of reasons for which a contractee is liable under paragraph (7) shall be as follows:

1. An act of a contractee which sets the unit price of labor costs below the minimum wage when entering into the contract;

2. An act of a contractee which lowers the unit price of labor costs below the minimum wage during the term of the contract.

(9) Where a project is performed under a contract for work made at least twice, "contractor" in paragraph (7) and "contractee" in paragraphs (7) and (8) shall be construed as "subcontractor" and "immediate upper tier contractor (a contractor who directly awards a subcontract to a subcontractor)", respectively.

[This Article Wholly Amended by Act No. 8964, Mar. 21, 2008]

Article 6-2 (Special Cases concerning Procedures for Amending Employment Rules to Include Minimum Wages)

Where an employer intends to amend employment rules to change wages paid for a period exceeding one month to wages paid monthly without a change in the total amount in order to include in wages included pursuant to Article 6 (4), notwithstanding Article 94 (1) of the Labor Standards Act, he/she shall hear the opinion of a trade union if there is such trade union composed of the majority of the employees in the business or workplace concerned, or otherwise hear the opinion of the majority of the said employees if there is no trade union composed of the majority of the employees.

[This Article Newly Inserted by Act No. 15666, Jun. 12, 2018]

Enforcement Ordinance

Article 5-2 (Calculation of Monthly Conversion Amount)

The monthly conversion amount under Article 6 (4) 2 of the Act and subparagraph 3 (b) of the same paragraph shall be calculated by multiplying the hourly minimum wage of the relevant year by the standard hours for applying minimum wages per month under Article 5 (1) 3.

[This Article Newly Inserted by Presidential Decree No. 29469, Dec. 31, 2018]

Enforcement Ordinance

Article 5-3 (Scope of Wages Included in Minimum Wage of Drivers in Taxi Transport Business)

"Wages prescribed by Presidential Decree" in Article 6 (5) of the Act means the wages paid at least once per month according to the payment conditions and payment rate prescribed in a collective agreement, employment rules, or a labor contract: Provided, That none of the following wages shall be included:

1. Wages other than those paid for contractual working hours or contractual working days;

2. Wages paid for subsidy for living and welfare of employees.

[This Article Newly Inserted by Presidential Decree No. 21572, Jun. 26, 2009]

Article 7 (Exclusion from Application of Minimum Wage)

Article 6 shall not apply to any of the following persons for whom the employer has obtained authorization from the Minister of Employment and Labor, as prescribed by Presidential Decree:

1. An employee with a very limited working capacity due to a mental or physical disability;

2. Other employees to whom it is deemed inappropriate to apply the minimum wage.

[This Article Wholly Amended by Act No. 8964, Mar. 21, 2008]

Enforcement Ordinance

Article 6 (Standard for Authorization of Exclusion from Application of Minimum Wage)

A person to whom the employer can exclude the application of minimum wage with the authorization of the Minister of Employment and Labor under Article 7 of the Act means a person whose mental or physical disability is deemed to be clear and direct obstacle to perform the work assigned.

[This Article Wholly Amended by Presidential Decree No. 21572, Jun. 26, 2009]

For further questions, please
call (+82) 2-539-0098 or email bongsoo@k-labor.com

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