Court Rules "Bonuses with Employment Conditions Also Count as Ordinary Wages"… Financial Supervisory Service Employees Win Lawsuit

Seoul High Court / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Seongpil Cho] Employees of the Financial Supervisory Service (FSS) won partial victories in both the first and second trials in a lawsuit demanding that regular bonuses and qualification allowances be recognized as ordinary wages.

According to the legal community on the 6th, the Seoul High Court Civil Division 1 (Presiding Judge Ji-won Jeon) ruled in favor of some of the approximately 1,800 FSS employees who filed a wage claim lawsuit against the FSS. The court stated, "Regular bonuses are wages, that is, compensation for labor, and even if the payment period is on a multi-month basis, it is merely deferred payment of labor compensation accumulated over several months," adding, "It is reasonable to consider them as ordinary wages."

The court also pointed out that attaching 'conditions' related to payment despite wages accruing daily for the days worked violates the Labor Standards Act. The appellate court recognized regular bonuses paid before January 1, 2015, which the first trial had excluded from ordinary wages due to 'employment conditions,' as ordinary wages.

However, the court excluded 'selective welfare expenses' recognized by the first trial from ordinary wages. The court explained, "Welfare points are part of establishing a corporate welfare system rather than compensation for labor," and "do not qualify as wages." It is reported that after the first trial ruling, the FSS recalculated various allowances and reimbursed some differences. The court ordered the FSS to pay employees the unpaid amounts based on the scope of ordinary wages recognized in the appellate trial.