Blanket Wage System—If your wage is lower than actual hours worked?
Blanket
Wage System—If your wage is lower than actual hours worked?
Employment & Labor
Law | English-speaking Korean Lawyers | Korean Corporate Lawyers | South Korea
| Dowoo Hwasan
Blanket Wage System? Is it justifiable to calculate overtime, night, or holiday work in advance?
The blanket wage system
is a wage calculation method under which wages are paid monthly by including
extended, night, and holiday work allowances set in advance to the blanket wage
based on the labor-management agreement. This is an exception allowed when
calculating working hours is difficult at the time of signing an employment
contract.
The Supreme Court (see
Supreme Court 2009. 12. 10. Decision 2008DA57852) has held that “determining
whether there is an agreement on the blanket wage system depends on
comprehensive consideration of various circumstances including working hours,
types and nature of work, wage calculation units, collective agreements,
employment rules, and actual conditions of business sites in the same
industry,” stating that “even when extended, night, and holiday work is
naturally expected due to the nature or type of work, it cannot be concluded
that an agreement on the blanket wage system is established when the collective
agreement, employment rules, or wage regulations clearly specify the payment to
be divided into specific items such as extended, night, or holiday allowances
separately from the basic wage.”
What
does the Labor Standard Act prescribe about adding the extended, night, or
holiday work wages?
Adding
overtime work: Add 50% of the normal wage
Adding
holiday work: Add 50% of the normal wage when less than
8 hours, Add 100% of the normal wage when over 8 hours
Adding
night work: Add 50% of the normal wage (between 10 PM -
6 AM the next day)
Article
56 of the Labor Standard Act (Extended, Night or Holiday Work)
An employer shall, in
addition to the ordinary wages, pay 50 percent or more thereof for extended
work (work during the hours as extended pursuant to Articles 53 and 59 and
the proviso of Article 69),
night work (work between 10:00 p.m. and 6:00 a.m.), or holiday work.
Ø Case
on the existence of a blanket wage agreement
(1st
Trial-Incheon District Court 2013 GAHAP 308989 Decision; Appeal-Seoul High
Court 2014 NA 2033671 Decision; Supreme Court 2015 DA 217287 Decision)
ü Worker
v. Employer
l
Arguments by the Worker
As far as the collective agreement and wage
agreement stipulate wages to be paid by dividing specific items such as
overtime work allowance, night work allowance, and weekly holiday allowance in
addition to the basic wage, it cannot be concluded that a blanket wage
agreement has been concluded between the defendant and the labor union of A Bus
Company.
l
Arguments by the Employer
Due to the nature of the city bus
transportation business, additional work such as overtime work, night work, and
holiday work inevitably occurs. Thus, the defendant has agreed with the workers
in advance about the overtime work, night work, and holiday work, and has been
paying wages as a blanket wage system in which the sum of various allowances
and the wage is paid as a monthly salary regardless of the actual hours of
work. Also, this blanket wage system has been specified in the collective
agreement, wage agreement, and employment contract. In light of the amount of
wages the defendant paid to the plaintiffs, paying wages under a blanket wage
system is not more disadvantageous than the standards set by the Labor
Standards Act. Thus, the method of paying wages according to the agreement on a
blanket wage system of the defendant is valid. Accordingly, as long as the
defendant has paid all wages to the plaintiff, etc. under a blanket wage
system, there is no statutory allowance for which the plaintiffs was not paid.
· Wage
Agreement ·
The wage for drivers
shall be based on a monthly basic salary and shall be applied with the number of
working days according to the wage table calculated using a blanket wage
calculation method.
ü
Court
Decision
l
Denied establishment of a
blanket wage agreement
The collective
agreement and wage agreement from 2009 to 2012 clearly classify the wages
into basic pay and various allowances and calculate the amount of the basic
pay and various allowances, respectively, based on the basic hourly pay with
the hourly pay concept as a starting point. There is a prior agreement that
deems the number of working days as 22 or 24 days per month and the daily
working hours as 8 hours of basic work and 1.5 hours of overtime work, of which
1 hour of night work is considered as performed. Thus, it can be identified
that the monthly wage amount is calculated by summing the amount of various
allowances for the above overtime working hours, in addition to the basic pay
for each working day.
Accordingly, if the
defendant has paid wages to the plaintiffs in such a method, this cannot
be considered that a wage payment agreement of a blanket wage method has been
concluded or that wages have been paid in such a way. And it is
insufficient to accept that the method of wage payment of the defendant falls
under a blanket wage system, and there is no evidence to conclude it otherwise.
Thus, the defendant’s
argument that no additional statutory allowances need to be paid to the plaintiffs
as the wage system of the defendant qualifies as a blanket wage system has no
ground.
For any additional
inquiries or information regarding this content on the blanket wage system,
please do not hessite to contact Dowoo Hwasan Attorneys & Counselors
(+82.2.6207.1114 or dowoo@dowoolaw.com).
Our Human Resources & Labor Team attorneys will help you.
Contact
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437 Teheran-ro, Gangnam-gu
Seoul, Republic of Korea 06158
T. +82.2.6207.1114
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E. dowoo@dowoolaw.com
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