CONTENTS
- 1. Ordinary Wage Lawsuit | Definition
- - What Are Wages?
- - Requirements for Recognition as Ordinary Wage
- 2. Ordinary Wage Lawsuit | Procedure
- - How the Plaintiff (Worker) Can Respond
- - How the Defendant (Employer) Can Respond
- 3. Ordinary Wage Lawsuit | Cases
- 4. Ordinary Wage Lawsuit | Key Issues
1. Ordinary Wage Lawsuit | Definition
An ordinary wage lawsuit may be brought against an employer who fails to pay the ordinary wage or who pays an ordinary wage that has not been properly calculated.
Here, the ordinary wage refers to ‘wages that have been set to be paid regularly and uniformly as compensation for prescribed work.’
This may include the usual hourly, daily, weekly, and monthly pay, as well as various allowances or bonuses that meet certain requirements.
The ordinary wage does not affect only the payment of wages itself. It serves as the basis for calculating many statutory allowances, including overtime, night-shift, and holiday work allowances, annual leave allowances, and severance pay, so its legal significance is considerable.
What Are Wages?
Wages refer to all money and goods that an employer pays to a worker as compensation for work, regardless of whether they are called wages, salary, or any other name.
The requirements for money or goods to be recognized as wages are as follows.
① It must be ‘money or goods paid by the employer.’
Wages must be paid by the employer (the company) to the worker.
Money or goods paid by a third party (a customer, a parent, an outside organization, etc.) are not wages.
▶Exceptions:
-Service charges voluntarily paid by casino customers
-Money paid by a parents’ support association
-Health insurance premiums borne by the employer, etc.
② It must be paid as ‘compensation for work.’
For money or goods to be recognized as wages, they must be directly related to the provision of work. Payments that are ceremonial or made out of goodwill, or that are intended to reimburse actual expenses, are not wages.
③ Substance matters more than name
Whether money or goods constitute ‘wages’ is determined by their substance, not by their name.
Money or goods that are paid regularly and continuously and that the employer is obligated to pay are regarded as ‘wages.’
Requirements for Recognition as Ordinary Wage
The requirements for the ordinary wage that is the subject of an ordinary wage lawsuit are regularity and uniformity.
-Uniformity: the wage must be paid to all workers identically or by an identical standard
-(Former requirement) Fixedness: the payment conditions had to be clear and definite (→ excluded by the December 2024 precedent)
However, in December 2024, the Supreme Court rendered a judgment excluding ‘fixedness’ from the conceptual indicia of the ordinary wage.
The court determined that the concept of fixedness had no statutory basis and unduly narrowed the scope of the ordinary wage.
Through this ruling, the concept of the ordinary wage and the criteria for determining it were newly established.
In other words, when pursuing an ordinary wage lawsuit, it is necessary to calculate the claimed amount accurately together with an attorney experienced in this area.
2. Ordinary Wage Lawsuit | Procedure
An ordinary wage lawsuit is a wage claim suit that a worker (the plaintiff) brings against an employer (the defendant) before a civil court.
The case addresses not only whether the ordinary wage is recognized, but also the scope of retroactive claims, interest, and whether unjust enrichment must be returned.
① Organizing the facts and reviewing the law
-Identifying the items that may qualify as ordinary wage
-Collecting evidence such as employment contracts, rules of employment, pay statements, and bonus payment regulations
② Attempting prior consultation and dispute mediation
-Attempting mediation through the in-house labor-management council, the labor union, or the Labor Relations Commission
-Reviewing the possibility of a private settlement or a payment agreement
③ Filing the suit
-Filing the wage claim suit with the competent civil court
-Stating in the complaint, in specific terms, the claimed amount, the ordinary wage items and payment period, and the grounds for payment
④ The defendant’s (employer’s) response and identification of issues
-The employer’s defenses, such as denying the grounds for payment, contesting whether the items qualify as ordinary wage, and asserting the extinctive prescription
⑤ Examination of evidence and pleading
-Organizing the legal principles for each issue based on precedents and similar cases
-Detailed determinations such as whether regular bonuses, job allowances, and performance pay qualify as ordinary wage
⑥ Judgment and payment
-Calculating the confirmed amount under the payment order or the judgment
-Proceeding to compulsory execution if payment is refused
How the Plaintiff (Worker) Can Respond
When a worker prepares an ordinary wage lawsuit, the following strategic approach is necessary.
① Selecting the ordinary wage items
The worker must specifically identify the items that may be included in the ordinary wage.
Considering the payment conditions and recurrence, the worker reviews whether items such as regular bonuses, long-service allowances, job allowances, and lodging and meal expenses qualify as ordinary wage.
② Securing payment records and wage calculation materials
Pay statements, employment contracts, and internal personnel regulations from the past several years serve as key evidence in the suit.
Because a claim may be made for wages not paid within the extinctive prescription (three years), the worker should also review whether each amount has lapsed based on its payment date.
③ Analyzing similar precedents and recalculating income
The worker should analyze similar cases, such as Supreme Court judgments, to gauge the likelihood that the items will be recognized as ordinary wage in the worker’s own case.
Through this analysis, it is important to calculate the claimed amount realistically before filing suit.
④ Reviewing a collective action
When many workers at the same workplace share the same issue, filing a collective action or joint suit can save time and cost and may place greater pressure on the employer.
How the Defendant (Employer) Can Respond
When an employer responds as the defendant in an ordinary wage lawsuit, the following legal defense strategies are necessary.
① Rebutting whether the items qualify as ordinary wage
The employer emphasizes that the pay items in question do not meet the requirements for ordinary wage (regularity and uniformity).
In particular, performance pay, certain evaluation-based allowances, and irregular bonuses may fail to meet the requirements.
② Asserting the extinctive prescription
A wage claim is subject to a three-year extinctive prescription running from the date it arises, and the employer should clearly assert that there is no obligation to pay the portion for which this period has elapsed.
③ Emphasizing the cost burden and denying unjust enrichment
The employer may argue that the total wages already paid do not greatly deviate from the legal standard and that an additional claim is contrary to fairness and the principle of good faith.
3. Ordinary Wage Lawsuit | Cases
Let us review cases and precedents involving ordinary wage lawsuits.
Case 1. Judgment ordering payment of about KRW 500 million, including performance bonuses and Lunar New Year bonuses
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CASE 2. Judgment recognizing the bonuses of sanitation workers as ordinary wage
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4. Ordinary Wage Lawsuit | Key Issues
In an ordinary wage lawsuit, the following legal issues frequently arise as central points of contention.
-Whether regular bonuses are included in the ordinary wage
-The criteria for determining the regularity and uniformity of performance pay
-The starting point of the extinctive prescription for wage claims
-Whether welfare-type allowances (lodging expenses, meal expenses, etc.) qualify as ordinary wage
-Whether retired or furloughed workers are included as payment recipients
-The validity of the wage payment regulations and whether they were announced internally
-The determination of the ordinary-wage character of allowances paid on differentiated standards among workers
Unlike ordinary wage arrears, an ordinary wage lawsuit is a highly demanding civil suit that requires an understanding of legal principles and precedents.
Because the standards changed with the 2024 Supreme Court precedent, the legal conclusion may vary depending on the specific facts and the payment regulations.
The outcome of the suit may also result in an additional labor cost burden of hundreds of millions of won or in a sudden mass of claims by workers, so it is advisable to organize the scope of the ordinary wage and establish a litigation strategy with an experienced attorney in advance.
Our firm has attorneys experienced in handling many cases involving wage arrears and ordinary wage lawsuits, and they provide tailored case strategies for clients through a task-force response.
Please feel free to consult our firm, which can provide one-stop support from consultation through evidence collection to litigation.
To help address legal blind spots, our firm operates branch offices in regions nationwide and provides a 24-hour, 365-day consultation system and non-face-to-face video consultation services.
