The Ministry of Employment and Labor announced on the 6th that the guidelines for wage negotiations have been revised for the first time in 11 years since 2014. Following the Supreme Court's ruling on Dec. 19 last year that expanded the scope of ordinary wages compared to before, it has been adjusted for labor and management to refer to on-site.
The key point of last year's Supreme Court ruling is the exclusion of the criterion of stability, one of the existing requirements for ordinary wages. Stability means that if conditions such as employment duration and number of working days affect whether bonuses are paid or how much is paid, it cannot be considered as ordinary wages.
Accordingly, conditional regular bonuses paid by employers to employees will also be included in ordinary wages in the future. For example, when determining the target for bonuses, conditions such as 'excluding those who worked less than 15 days during the reference period' or 'currently employed on the payment date of the bonus' will be considered as ordinary wages. Previously, such bonuses were not included in ordinary wages.
A Ministry of Employment and Labor official noted, "The Supreme Court clearly explained the scope of ordinary wages through rulings in December last year (Hyundai Motor employee wage lawsuit) and January (SeAH Besteel employee wage lawsuit)" and added, "We tried to faithfully include this content in the guidelines."
However, there may be confusion in the field due to the ordinary wage precedent that has changed for the first time in 11 years. In response, the Ministry of Employment and Labor organized answers based on frequently asked questions from the field.
Q. The company pays regular bonuses quarterly, four times a year, only to current employees. Are these included in ordinary wages?
A. They would correspond to ordinary wages. The total of four regular bonuses per year should be converted into hourly wages.
Q. The company defines 20 days as the standard working days and provides 300,000 won if fully attended. I received 300,000 won in January for full attendance, but did not receive it the following month due to absences. Is this 300,000 won also ordinary wages?
A. It will be included in ordinary wages. If the full attendance allowance is predetermined as compensation for regular work and has regularity and uniformity, even if the full attendance allowance is not received due to not fulfilling the number of standard working days, it should be included in the calculation of ordinary wages.
Q. The company provides physical training expenses every January and summer vacation expenses every August. Are these included in ordinary wages?
A. They will correspond to ordinary wages, regardless of name or form.
Q. I joined the company on Feb. 6. The company pays 100% of the basic salary as a regular bonus on the fifth of every even month. Therefore, I have not yet received a regular bonus. If overtime arises in February, can the regular bonus be included in ordinary wages?
A. The recent Supreme Court ruling stated that any wages that are not paid due to not being employed at the time of payment are considered ordinary wages. Therefore, the regular bonus of 600% should be converted to the standard hourly wage and calculated based on the number of overtime workdays.
Q. The company pays 200,000 won per month as a no-accident allowance to drivers who have driven without incidents for a certain period. Is this allowance also considered ordinary wages?
A. The no-accident allowance is compensation for meeting the requirement of having no accidents. It is not considered compensation for regular work, and therefore cannot be regarded as ordinary wages.
Q. The company has been paying fixed overtime pay for 25 hours each month. If there is additional work beyond this, it is paid additionally. How should this be calculated around the time of the ruling on Dec. 19 last year?
A. Since a new legal principle applies after Dec. 19, the calculation should be made by checking the actual occurrence of overtime regardless of fixed overtime work (25 hours). Thus, calculations should be made according to the existing legal principles until Dec. 18, and new principles should be distinguished thereafter. Even if payments were made according to existing principles until the 18th, it would not be viewed as a legal violation.
Q. I started parental leave in October of last year and applied for parental leave benefits on Dec. 20 of the same year. Should the standard for calculating ordinary wages be seen under the old or new legal principles?
A. Parental leave benefits are to be paid as the amount corresponding to ordinary wages at the start of parental leave. Therefore, if parental leave starts after Dec. 19 of last year, ordinary wages must be calculated and paid according to the new legal principles.