"Minimum wage" refers to the minimum level of wages set by the government for the stabilization of workers' livelihoods and the improvement of the quality of the labor force.
What is "minimum wage"?
- "Minimum wage"is intended to promote workers’ livelihood stability and quality improvement in the labor force by guaranteeing the minimum level of wages for workers, and it is stipulated in the 「Minimum Wage Act」. (Refer to 『Dictionary of legal terms of the national law information center』)
Minimum wage in 2023
- From 2023.1.1 to 2023.12.31: hourly wage 9,620 won (「Announcement of minimum wage applied for 2023」)
|
Minimum wage monthly conversion amount
|
|
Q: The minimum wage for 2023 is 9,620 won per hour. How much is the minimum wage calculated on a monthly basis if the prescribed working hours per week are 40 hours and 8 hours paid week off? A: The monthly minimum wage is calculated by multiplying the announced hourly minimum wage by the number of hours per month for which the minimum wage is applied. Therefore, the calculation of the number of hours for applying the minimum wage in one month is as follows. [(40 hours of the prescribed working hours per week + 8 hours paid week off) × 365 ÷ 7]÷12 months = about 209 hours Therefore, if you multiply the number of hours (209 hours) in a month for applying the minimum wage by 9,620 won, which is the minimum hourly wage in 2023, you get 2,010,580won. < Source: Refer to the Minimum Wage Commission, 『2023 minimum wage notice』 >
|
Employers must pay workers more than the minimum wage, and the part of the labor contract where the wage is less than the minimum wage will be null and void.
Obligation to pay the minimum wage
- Each employer shall pay employees covered by the minimum wage, at least the minimum wage amount or more, and no employer may lower the previous wage level on the ground of the minimum wage determined under 「Labor Standard Act」. (Articles 6(1) and 6(2), 「Minimum Wage Act」)
※ You can calculate whether your current wage is above the minimum wage by using the on the website of the Ministry of Employment and Labor.
※ A person who lowers the previous wage on the grounds of the minimum wage in violation of this provision shall be punished by imprisonment with labor for not more than 3 years or by a fine not exceeding 20 million won. In this case, imprisonment and a fine may be concurrently imposed. (Article 28(1), 「Minimum Wage Act」)
Effect of employment contract below the minimum wage
- Where a labor contract between an employer and an employee covered by the minimum wage provides for a wage below the minimum wage amount, the relevant stipulation concerning the wage shall be null and void and the invalidated part shall be considered to stipulate that the same wage as the minimum wage amount determined under 「Minimum Wage Act」 shall be paid. (Article 6(3), 「Minimum Wage Act」)
The range of wages not included in the minimum wage
- Wages regularly paid at least once per month shall be included in the wages.Provided, none of the following wages shall be included: (Article 6(4),「Minimum Wage Act」 and Article 2, 「Enforcement rule of the Minimum Wage Act」)
|
Wages excluded from inclusion
|
Specific scope
|
|
Wages other than those paid for the prescribed working hours or prescribed working days
|
• Wages for overtime or holiday work and additional wages for overtime, night or holiday work • Unused allowance for annual paid leave • Wages for paid holidays (excluding paid holidays under Article 55(1), 「Labor Standards Act」) • Other wages recognized as equivalent to the above regardless of name
|
|
Bonuses and other equivalents that correspond to a certain percentage (10% in 2022) of the monthly conversion amount calculated based on the hourly minimum wage for the year in the monthly payment of the following wages
|
• Bonus, incentive pay, efficiency allowance, or continuous service allowance calculated according to the relevant reason for a period exceeding one month • Allowance for good attendance paid according to attendance performance for a period exceeding one month
|
|
Wages in the nature of subsistence or welfare for workers, such as food expenses, lodging expenses, transportation expenses, etc., that fall under any of the following
|
• Wages paid in something other than currency • A portion corresponding to a certain percentage (2% in 2022) of the monthly conversion amount calculated based on the minimum hourly wage for the year out of the monthly wage paid in currency
|
Exceptions to which the minimum wage does not apply
- Provided, the obligation of the payment of the minimum wage (Article 6(1), 「Minimum Wage Act」) and the change of employment contract (Article 6(3), 「Minimum Wage Act」) shall not oblige any employer to pay wages for the hours or days which an employee has not worked due to any of the following reasons. (Article 6(6), 「Minimum Wage Act」)
· When a worker fails to work for the prescribed working hours or prescribed working days due to his/her own circumstances
· When the employer fails to work the prescribed working hours or the prescribed working days for the worker for a justifiable reason
If the employer receives authorization from the Minister of Employment and Labor to exclude the minimum wage, he/she can pay less than the minimum wage to the worker.
Authorization of exclusion from application of minimum wage
- If a person is admitted by the Minister of Employment and Labor that his/her mental or physical disability is deemed to be clear and direct obstacle to perform the work assigned, the employer can exclude the application of minimum wage (Article 6, 「Minimum Wage Act」)(Article 7, 「Minimum Wage Act」 and Article 6, 「Enforcement Decree of the Minimum Wage Act」)
Application for authorization and issuance of authorization
- An employer who intends to request for the authorization of exclusion from the application of a minimum wage shall submit to regional employment and labor office the application form of exclusion from the 『Application of minimum wage due to mental or physical disorder』 with following documents attached. (Article 3(2) and Annex Form 1,「Enforcement Rule of the Minimum Wage Act」)
· One copy of the wage ledger for all workers at the workplace for the month immediately preceding the month in which the application date belongs
· One copy of document proving that the worker is mentally or physically disabled
· One copy of the parental opinion statement (applicable only to applications due to intellectual disability, mental disorder, or autistic disorder, etc.)