Ⅰ. How to Pay Wages

Article 43 of the LSA (Payment of Wages)
① Payment of wages shall be directly made in full sum to the worker in cash; however, if otherwise stipulated in special provisions of laws or decrees or in collective agreement, wages may be partially deducted or paid in other forms.
② Wages shall be paid at least once a month on a fixed day; however, this shall not apply to extraordinary wages, allowances, or any other similar payments, nor to those wages provided for byPresidentialDecree.

LSA Enforcement Decree, Article 23 (Exception to Wages to be Paid at Least Once Monthly)
The term “extraordinary wages, allowances, or other similar payments, or the wages prescribed by Presidential Decree” in the proviso to Article 43 (2) of the Act means those falling under the following subparagraphs:
1.
Allowance for good attendance payable on the basis of the attendance record for a period exceeding one month
2. Seniority allowance payable for consecutive service for a fixed period exceeding one month
3.
Incentive, proficiency allowance, or bonus calculated on a ground sustaining for a period exceeding one month
4. Other various allowances paid on an irregular basis.
Article 109 of the LSA (Penal Provisions) Employers shall be punished for violations of the above Article 43 (Payment of wage) with imprisonment of not more than 3 years or a fine of not more than KRW 30 million.


The Labor Standards Act states that payment of wage shall be directly made in full sum to the worker in cash and paid at least once per month on a fixed day, thereby including the principles of cash payment, direct payment, total payment, and fixed-day payment.

1. The Principle of Cash Payment

wage shall be paid in cash, not in kind. Accordingly, wage shall be paid in convertible cash(i.e. bank notes or coins) except for special cases prescribed in law or collective agreement. A cashier’s check issued by the bank, however, does not violate the principle of cash payment, though bill payment is treated as an agreed extended payment.

1) Legal cases: ① Payment by certified check; ② Payment by shares for incentive pay
2) Illegal cases: ① Payment of a check not guaranteed by the bank; ② Company shares, bills, or goods

2. The Principle of Direct Payment

wage shall be paid directly to the employees. This rule does not allow exceptions by law or collective agreement, and also does not permit any delegation or proxy. However, the principle is not violated if a family member serves as a messenger in case of any illness affecting the recipient. The family member can collect the payment or it can be transferred into a designated bank account upon the employee’s request. However, this excludes seamen, who are exempt from direct payments due to the different working conditions at sea.

1) Legal cases: ① Payment to the wife for inevitable cases, ② Payment to seamen’s families, ③ Deduction in cases of seizure for wage credit, ④ Unclear address of the employee
2) Illegal cases: ① Payment to the labor union, ② Payment to parental authority or proxy, ③ Payment to the grantee for wage credit

3. The Principle of Total Payment

wage shall be paid in total amounts to all employees after applicable deductions according to the law or collective agreement. Legal deductions include income tax, resident tax, medical insurance, national pension, etc. collective agreement deductions include union membership fees(check-off system).

1) Legal cases: ① Deductions for advance payment, ② Replacement of a taxi driver’s insufficient daily deposit by wage, ③ Deductions due to disciplinary action; ④ No wage for no work during strikes
2) Illegal cases: ① Prohibition of pre-determination of non-observance, offsetting wage against advances, and compulsory saving; ② Replacement of compensation for damage due to illegal acts or default

4. The Principle of Fixed-day Payment

wage shall be paid on a fixed day, one or more times in a month, to promote stability for employees. wage or allowances paid temporarily to be admitted as exceptions shall include, ① Diligence allowances paid for superior attendance during the period exceeding one month, ② Service allowances paid for continuous work during the period exceeding one month, ③ Incentives, efficiency allowances or bonuses presented for various reasons during the period exceeding one month; and ④ Other allowances paid irregularly.

1) Legal cases: Change of payment date
2) Illegal cases: Delayed payment of wage


MOEL Guidelines
1. Unless there is a special agreement, an employee who quits his or her job before the selected day of wage increase may not receive the increased wage.
2. Upon indictment of unfair labor practice by the Labor Relations Commission, the employer shall pay entire wage during the period of dismissal.
3. An employee who terminates employment for personal reasons shall be paid all severance pay and wage owed him or her.
4. If bonus pay is guaranteed every year, an employee resigning before the bonus pay day will be able to receive it in an amount pro-rated to their service days.
5. Although Chuseok bonus is fixed yearly, the amount shall be paid to those who resign before the payment day.
6. If the employer tries their best to pay wage on time but fails to do so due to financial difficulties from stagnant business, then the employer shall not be punished for delayed payment.
7. An employee dismissed as disciplinary punishment shall be paid severance pay and wage covering service days.
8. Whether an industrial trainee causes actual damage intentionally or by mistake, it is a violation of the Labor Standards Act if the employer deducts their wage for the loss.
9. If a subcontractor fails to pay wage to employees without contributory cause by the immediate preceding contractor, the immediate preceding contractor shall not bear the burden with the subcontractor concerned.