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Korea, Republic of - Minimum Wages - 2011


LAST UPDATE

10 November 2011

SOURCES


Name of Act

Minimum Wage Act, Act No. 3927 dated 31 December 1986, incorporating amendments up to Act No. 10339 dated 4 June 2010. Published by the Ministry of Employment and Labor at http://www.moel.go.kr/english/topic/laborlaw.jsp?tab=Standards and accessed 9 November 2011.

Name of Act

Enforcement Decree of the Minimum Wage Act, Presidential Decree No. 12207 dated 1 July 1987, incorporating amendments up to Decree No. 22805 dated 30 March 2011. Published by the Ministry of Employment and Labor at http://www.moel.go.kr/english/topic/laborlaw.jsp?tab=Standards and accessed 9 November 2011.

Name of Act

Labor Standards Act, Act No. 5309 dated 13 March 1997, incorporating amendments up to Act 10719 dated 24 May 2011. Published by the Ministry of Employment and Labor at http://www.moel.go.kr/english/topic/laborlaw.jsp?tab=Standards and accessed 9 November 2011.
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Name of Act

Enforcement Decree of the Labor Standards Act, Presidential Decree No. 15320 dated 27 March 1997, incorporating amendments up to Presidential Decree No 22804 dated 30 March 2011. Published by the Ministry of Employment and Labor at http://www.moel.go.kr/english/topic/laborlaw.jsp?tab=Standards and accessed 9 November 2011.

LEGAL DEFINITIONS


Employee/worker

Worker means a person who offers work to a business or workplace to earn wages, regardless of the kind of job he/she is engaged in.
Labor Standards Act 1997 §2(1)
Minimum Wage Act 1986 §2

Employer

Employer means a business owner, a person responsible for management of a business, or a person who works on behalf of a business owner with respect to matters relating to workers.
Labor Standards Act 1997 §2(1)
Minimum Wage Act 1986 §2

Wage

Wage means wages, salaries and any other money and valuable goods an employer pays to a worker for his/her work, regardless of how such payments are termed.
Labor Standards Act 1997 §2(1)
Minimum Wage Act 1986 §2

MINIMUM WAGE FIXING


Procedure


Government decides after tripartite or bipartite body discussions/recommendations

The Minister of Employment and Labour determines the national minimum wage by 5 August each year, in accordance with a minimum wage proposal deliberated and decided by a Minimum Wage Council.

The Council consists of 9 members representing of the workers, 9 members representing the employers and 9 members representing the public interest. Up to 3 special members may also be appointed, from among public officials of a relevant administrative agency, to attend and speak at Council meetings. Except where otherwise specified, decisions shall be made with the attendance of the majority of members (including at least 1/3 of the worker and employer members respectively) and with the approval of the majority of attendees.

The Council commences its deliberations each year upon the request of the Minister, and submits a minimum wage proposal within 90 days of the request. Once the minimum wage proposal is received, the Minister must announce the proposal without delay.

Once the proposal is announced, national-level representatives of worker and employer organisations shall have 10 days to raise an objection to the proposal by letter to the Minister. If the Minister considers an objection raised to be reasonable, or otherwise considers there to be difficulties with determining the minimum wage according to the minimum wage proposal received, the Minister shall request the Council to redeliberate on the minimum wage proposal and submit a revised proposal.

Where the Council passes the initial minimum wage proposal again following a redeliberation of not less than 10 days and with the presence of all members and a 2/3 majority, the Minister is obliged to decide the minimum wage according to the proposal.

Once the Minister has determined the minimum wage, he or she shall publicly announce its contents without delay. The minimum wage shall then come into force on January 1 of the following year.
Minimum Wage Act 1986 §§8, 9, 10, 12, 13, 14, 16, 17, 18
Enforcement Decree of the Minimum Wage Act 1987 §§7, 8, 9, 10

Criteria


Cost of living

The minimum wage shall be set after taking into account the cost of living of workers.
Minimum Wage Act 1986 §4(1)

Level of wages and incomes in the country

The minimum wage shall be set after taking into account the wages of kindred workers.
Minimum Wage Act 1986 §4(1)

Economic development

The minimum wage shall be set after taking into account the ratio of workers’ compensation to national income.
Minimum Wage Act 1986 §4(1)

Productivity

The minimum wage shall be set after taking into account labour productivity.
Minimum Wage Act 1986 §4(1)

Coverage


Scope

The Minimum Wage Act applies to all businesses and workplaces employing workers, subject to the exclusions and possible exemptions set out below.
Minimum Wage Act 1986 §3
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Excluded categories


» Workers

Persons employed in a business using only relatives living together with the employer are excluded from minimum wage provisions.

Exemptions may also be obtained from the Minister of Employment and Labor with respect to:
(i) workers with an obvious mental or physical disability, which directly and considerably hinders the performance of his or her duties; and
(ii) other persons to whom it is deemed inappropriate to apply the minimum wage.
Minimum Wage Act 1986 §§3, 7
Enforcement Decree of the Minimum Wage Act 1987 §6

» Occupations

Domestic workers are excluded from the scope of the Minimum Wage Act.
Minimum Wage Act 1986 §3

Specific minimum wage rates


» Specific minimum wage by sector

The minimum wage amount may be set differently by type of business.
Minimum Wage Act 1986 §4
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» Minimum wage levels for specific categories of workers


» Trainees

Apprentices, for whom less than 3 months have passed since the beginning of the apprentice period, shall receive 90 % of the hourly minimum wages rate.
Minimum Wage Act 1986 §5(2)
Enforcement Decree of the Minimum Wage Act 1987 §3(1)

» Domestic Workers

Domestic workers are excluded from the minimum wage legislation.
Minimum Wage Act 1986 §3

» Disabled

Workers with an obvious mental or physical disability, which directly and considerably hinders the performance of his or her duties, may be excluded from minimum wage protection with the permission from the Minister of Employment and Labor.
Minimum Wage Act 1986 §7
Enforcement Decree of the Minimum Wage Act 1987 §6

» Contractors

Where it is difficult to calculate the number of hours worked because wages are usually determined on a contract basis, the minimum wage rate shall be determined according to a certain unit of output or performance of the worker concerned.

In such cases, the hourly wage rate shall be calculated, for the purposes of applying the minimum wage, by dividing the total wages during a wage calculation period by the total number of working hours during that period.
Minimum Wage Act 1986 §5(3)
Enforcement Decree of the Minimum Wage Act 1987 §§4, 5(2)

» Piece-rate workers

Where it is difficult to calculate the number of hours worked because wages are usually determined on a contract basis, the minimum wage rate shall be determined according to a certain unit of output or performance of the worker concerned.

In such cases, the hourly wage rate shall be calculated, for the purposes of applying the minimum wage, by dividing the total wages during a wage calculation period by the total number of working hours during that period.
Minimum Wage Act 1986 §5(3)
Enforcement Decree of the Minimum Wage Act 1987 §§4, 5(2)

» Other categories

Persons engaged in surveillance or intermittent work may be paid a rate equal to 80% of the minimum wage rate where the person’s employer has obtained approval from the Minister of Employment and Labor.
Minimum Wage Act 1986 §5(2)
Enforcement Decree of the Minimum Wage Act 1987 §3(2)

Level


Minimum wage level(s) in national currency

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Last minimum wage update

1 January 2011

In-kind allowances

Payment of wages shall be directly made in full to worker in cash. However, if otherwise stipulated by Acts and subordinate statutes or by a collective agreement, wages may partially be deducted or may be paid by other than cash.
Labor Standards Act 1997 §43(1)

Rate of payment


» Monthly

Wages shall be paid at least once per month on a fixed day. However, this requirement does not apply to:
(i) extraordinary wages;
(ii) allowances;
(iii) any other similar payment;
(iv) allowances for good attendance paid on the basis of an attendance record for a period exceeding one month;
(v) seniority allowances paid for consecutive service for a fixed period exceeding one month;
(vi) bounties, proficiency allowances, or bonuses calculated for any reason existing for a period exceeding one month; or
(vii) other various allowances not paid on a regular basis.
Labor Standards Act 1997 §43(2)
Enforcement Decree of the Labor Standards Act 1997 §23

Scheduled frequency of adjustment

The minimum wage is to be adjusted annually. The Minister of Labour shall request the Minimum Wage Council to deliberate by 31 March and determine the minimum wage by 5 August each year. The revised minimum wage is to come into effect on 1 January the following year.
Minimum Wage Act 1986 §§8, 10
Enforcement Decree of the Minimum Wage Act 1987 §7

Enforcement mechanisms


Labour inspection

An employer shall prepare a wage ledger for each workplace and enter the matters which serve as a basis for determining wages and family allowances, the amount of wages and other matters as provided for by the Presidential Decree whenever wages are paid. Workers and employers may also be requested by the Minister of Employment and Labor, or by the head of the local employment and labor office, to report matters relating to wages within the extent necessary for the enforcement of the Minimum Wage Act.

Administration of enforcement of the Act is the responsibility of labour inspectors, who may enter workplaces, demand submission of accounting books and documents, inspect other things and ask questions of relevant personnel. A labor inspector may also perform the duties of a judicial police officer in relation to any offence committed in violation of the Minimum Wage Act.
Minimum Wage Act 1986 §26(2), (4)
Enforcement Decree of the Minimum Wage Act 1987 §21-2
Labor Standards Act 1997 §§48, 101

Fines in national currency for non-respect of legislation

Failure to pay the minimum wage rate, or lowering previous wages on the grounds of the minimum wage, may be punishable by a fine of up to 20 million won. Such a fine may be an alternative or in addition to imprisonment.

Failure to widely inform workers of the relevant minimum wage, report accurately on matters relating to wages or respond accurately and appropriately to labor inspectors is punishable by a fine of up to 1 million won (referred to by the Act as fines for negligence). Such fines for negligence may be reduced by up to half in certain mitigating circumstances, such as considerable loss to property due to a natural disaster or where the offence is deemed to have been caused by a mistake, such as minor carelessness or error.
Minimum Wage Act 1986 §§28, 31
Enforcement Decree of the Minimum Wage Act 1987 §22

Other penalties

Failure to pay the minimum wage rate, or lowering previous wages on the grounds of the minimum wage, may be punishable by imprisonment of up to 3 years. Imprisonment may be an alternative or in addition to the imposition of a fine.
Minimum Wage Act 1986 §28

Results generated on: 31st October 2014 at 23:56:10.
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