1. Summary
On Sep 21, 2009, a Korean cook (hereinafter referred to as “the employee”) who worked at a US Army restaurant based in Korea applied to the Seoul Regional Labor Office for his unpaid weekly holiday allowance. The employee claimed that his monthly salary was calculated by multiplying his actual working hours by an hourly wage rate and then allowances, like bonuses, were included, but he did not receive anything called a weekly holiday allowance. He therefore asked that the company pay him the unpaid weekly holiday allowance from the previous three years until the present time. The Labor Inspector investigated the claims of both parties related to the case and concluded on Jan 12, 2010, that the company did not violate any related laws.

2. The Employee’s Claim
According to his employment contract, the restaurant employee received an hourly wage, paid every month, in the amount calculated by multiplying the actual working hours by the hourly wage rate, plus an amount reflecting the Welfare Benefit allowance & PIK allowance, as well as a monthly bonus calculated by dividing 700% of the annual bonus by 12. The employee has not received anything called a weekly holiday allowance in his salary. Monthly wages have been always variable according to the hours worked each month because the wage structure was not a monthly wage system but an hourly wage system. Accordingly, as the company has not paid a fixed monthly wage, but paid different wages every month according to the number of hours worked, the company should also pay a weekly holiday allowance.

3. The Employer’s Claim
When paying wages in an hourly wage system, the company calculated the wages as (working hours × hourly wage rate) and, instead of adding a weekly holiday allowance, included a fixed monthly ‘benefit allowance’ and ‘PIK’ allowance, which was an amount exceeding the weekly holiday allowance. Given that this is the case, how would it be possible for the company to pay 700% of the annual bonus (divided into 12 months), as well as subsidize middle and high school students’ tuition while neglecting to pay the statutory weekly holiday allowance? As the company has paid an amount equivalent to the weekly holiday allowance each month, even though the company did not call it a weekly holiday allowance, this amount can replace the weekly holiday allowance.

4. Related Administrative Guidelines
(1) Inclusion or non-inclusion of paid weekly holiday (Jul 8, 2008; kunrokijun-2455)
If an employer pays employees according to a monthly wage system, the monthly wage shall be considered to include a paid weekly allowance, if there are no exceptional situations (Supreme Court ruling 93 da 32514). If the employee receives fixed allowances along with basic hourly wages every month in a monthly wage system, such fixed allowances shall be interpreted to have similar characteristics as wages for paid weekly holiday allowance (Supreme Court ruling 97 da 28421).

(2) The weekly holiday does not normally apply to daily workers, but if a daily worker works for six consecutive days, a paid weekly holiday shall be provided. (Apr 2, 1997, Gungi 68207-424)
Weekly holiday allowance under the Labor Standards Act shall be given to a worker who fulfills his/her weekly contractual working hours. However, in principle, the weekly holiday shall not be given to daily workers because it is not possible to calculate weekly contractual working hours for daily workers, as they engage in daily employment contracts.
The purpose for providing a weekly holiday is to reduce the accumulated fatigue on workers after one week’s work, thereby helping to protect their health, and to provide time to participate in social and cultural activities. If a daily worker works for 6 consecutive days per week without absence, actual working days, and not contractual working days, shall be applied and weekly holiday shall be granted. The employer shall pay weekly holiday allowance separately from wages for daily workers, unless the affected worker agrees to receive the weekly holiday allowance in advance, with their daily wages.

5. Judgment on the Case
The labor inspector in charge of this case concluded that the company has paid weekly holiday allowance to the employee as the company paid monthly wages based on the hourly wage system and added a regular allowance for each month, which was an equivalent amount to the weekly holiday allowance. If, in this case, the company had paid wages by multiplying the actual working hours by the hourly wage rate without a monthly regular allowance, only adding a monthly bonus calculated for the annual 700% bonus, the company would have to pay all employees, including the employee in this case, all unpaid weekly holiday allowances for the past three years.