LABOR LAW GUIDE

Chapter 3 Wages

Section 1: Wages and Labor Law. Ⅰ. Wage Requisites and Standards for Judgment

Ⅰ. Wage Requisites and Standards for Judgment

Article 2 (5) of the LSA. Definition of wage
The term “wage” means wage, salary, and any other money or valuables, regardless of its title, which the employer pays to a worker as remuneration for work.


1. Wage Requisites

(1) Paid by the employer
Given that wage are what the employer pays to the employee, the service charge that a worker receives from customers in a hotel or restaurant cannot be considered as wage in principle.

(2) Remuneration for work
As wage are paid as remuneration for work, they cannot be deemed to be wage if the employer renders payment under friendly and favorable terms outside of work, or if the employer provides pay as part of welfare, or if the employee receives reimbursement for actual expenses.

(3) Any payment regardless of label
wage are paid in forms of salary or allowance in general. If the employer is paying remuneration for work to the subordinate employee, it is considered wage, regardless of what label the payment is given. Accordingly, we shall not estimate information allowance and welfare fees as wage just by their titles, because wage are differentiated by payment conditions.

2. Concrete Criteria for Wage

(1) Money paid under friendly and favorable terms is not considered to be wage
Money is not considered wage if paid for optional, courteous, and friendly reasons including congratulatory and consolation allowances, awards for quality control activities, or money paid favorably to celebrate special occasions such as the company’s foundation day.

(2) Money paid for actual expenses is not considered wage
Money paid to reimburse actual expenses for the purchase of production instruments such as security equipment is not wage. Reimbursements for purchase of work uniforms, tools and materials, business trip expenses, travelling expenses, account expenses, confidential expenses, and information fees are also not considered wage.

(3) Welfare allowances are not considered wage (in principle)
The welfare allowance in its true meaning is not a wage because it cannot be treated as remuneration for work. However, if paid regularly to all workers in accordance with the collective agreement, rules of employment, or a repeated precedent, it is considered wage under the Labor Standards Act.


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

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