MOEL issues revised labour-management guidance on ordinary wage

27 February 2025 2 min read

By Weon Jung Kim, Ki Young Kim, Paul Cho, Hyeon Tae Bae, Choon-Ho Kim and Hoin Lee

At a glance

On 6 February 2025, the Ministry of Employment and Labour (MOEL) released updated labour-management guidance on ordinary wage (Guidance).
The Guidance aims to clarify the newly established legal principle on ordinary wage and mitigate potential disputes and confusion surrounding its application.
The MOEL will conduct explanatory sessions, provide guidance on updating agreements, and assist businesses in restructuring compensation structures.
The guidance includes a 'questions and answers' section addressing frequently raised questions about the Supreme Court's decisions.

This article has been reproduced with the permission of the authors Weon Jung Kim, Ki Young Kim, Paul Cho, Hyeon Tae Bae, Choon-Ho Kim and Hoin Lee at Kim & Chang.

On 6 February 2025, the MOEL released guidance on ordinary wage in response to the recent Supreme Court en banc decisions overruling its previous position on ordinary wage. The Guidance aims to clarify the newly established legal principle on ordinary wage and mitigate potential disputes and confusion surrounding its application.

To facilitate the seamless application of the new legal principle and the updated guidelines under the Guidance, the MOEL announced that it will:

conduct labour-management explanatory sessions and meetings;
provide guidance on updating collective bargaining agreements, rules of employment, and employment agreements; and
assist businesses in restructuring their compensation structures.

The Guidance also summarises the MOEL’s response to some of the most frequently raised questions surrounding the Supreme Court's en banc decisions in a 'questions and answers' format. We highlight some of the key clarifications below.

No.	Question	Response
1	Does a wage that is conditioned on current employment (ie employed on the day of payment) constitute ordinary wage?	If the wage is pre-determined in consideration for the prescribed work and is paid on a 'regular' and 'uniform' basis, it will fall under the scope of ordinary wage even if it is conditioned on current employment.
2	For a new employee who has not yet become eligible to receive regular bonus due to short tenure, would the regular bonus still fall under ordinary wage?	If the regular bonus meets the requisite criteria and is therefore treated as ordinary wage, it should be included in the calculation of ordinary wage even if the employee has not yet become eligible to receive it.
3	How should regular bonus be factored into the calculation of ordinary wage?	Pursuant to Article 6, Paragraph 2, Items 5 and 7 of the Enforcement Decree of the Labor Standards Act, ordinary hourly wage shall be calculated by dividing the annual aggregate regular bonus by annual total hours for the calculation of ordinary wage.
4	Should wages conditioned on 'current employment' or 'number of completed working days' be paid in proportion to the completed service period?	In line with the Supreme Court decision, the validity of the conditions attached to the 'payment' of regular bonus, etc, should be reviewed separately from the question of whether it should be included in ordinary wage. Therefore, unless there is a reason to determine otherwise, the 'payment' conditions are valid, and employers are not obliged to pay a regular bonus if its conditions are not satisfied.