I am an employee who is currently on childcare leave. I was going to return to work after my childcare leave but I am considering retiring because of my circumstance. However, what worries me is that I heard that, when calculating my retirement pay, the last three months wages before retirement are important. I have not been paid extra wages in addition to childcare leave benefits from the employment insurance during childcare leave. What do I have to do? Should I work for three months then quit after returning to work to get the right amount of my retirement pay?

The reason why 3 months' pay before retirement is important is that retirement pay is calculated as average wage. The average wage is the total amount of wages paid to the worker for the three months prior to the reason for the calculation, divided by the total
number of days in the period. Even if workers are less than 3 months after their employment, the same calculation will apply.

Therefore, as the case the questioner worry about, if you are paid less than usual for any reason for three months before your retirement, your retirement pay will be lower. However, the periods of maternity leave, childcare leave, and dismissal due to industrial accidents are the period of exercising the rights guaranteed by law. A disadvantage to workers cannot be given based on these reasons. Therefore, the reasons below are excluded from the calculation period of the average wage. (Article 2 (1) of the Enforcement Decree of the Labor Standards Act)

1. A probationary period;

2. A period during which the employer’s business is closed because of a cause attributable to the employer;

3. A period before or after childbirth;

4. A period of temporary suspension of medical treatment due to occupational injury or disease;

5. A period of child-care leave under the Equal Employment Opportunity and Work-Family Balance Assistance Act;

6. A period of legitimate labor disputes;
7. A period of temporary retirement from office or absence from office in order to perform a duty under the Military Service Act, the Reserve Forces Act, or the Framework Act on Civil Defense: Provided, That this shall not apply to a period during which wages have been paid;

8. A period of temporary retirement from office due to a non-occupational injury or disease, or any other cause with the employer’s approval.

However, absences due to the reason attributable to the worker, the period of closure, the period in which the worker has been arrested for a personal crime and has been terminated, and the period of an unlawful dispute are not excluded from the average wage calculation period. This can result in a significant reduction in the average wage. If the calculated average wage is lower than the ordinary wage of the worker, the ordinary wage will be the average wage.

For the questioner’s case, if the average wage calculation period does not exist because the period of childcare leave exceeds three months, then the calculation of the average wage will be calculated based on the previous three months from the first day of the leave as an occurrence day for the average wage calculation.