Shinsegae Department Store Union Announces Lawsuit Against Company for 'Recalculation of Ordinary Wages'

"Holiday Bonuses and Performance Bonuses Should Be Included in Ordinary Wages"

The Shinsegae Department Store labor union has announced plans to file a lawsuit against the company, demanding that holiday bonuses and performance incentives be included in the calculation of ordinary wages.

The Shinsegae Labor Union of the Korean Federation of Textile, Distribution and Construction Workers' Unions announced on the 28th that it has begun recruiting members to participate in a lawsuit to recalculate ordinary wages. The union plans to recruit the lawsuit group until the 9th of next month and submit a complaint to the court as early as mid-month. Ordinary wages refer to the hourly wage amount, partial amount, weekly wage amount, or contract amount agreed to be paid to workers for total work.

Exterior view of Shinsegae Department Store Gangnam Branch.
Photo by Asia Economy DB

According to the union, Shinsegae has not included bonuses and performance incentives in the calculation of ordinary wages since 2017. The union claims that through this, the company deceived workers while making huge profits. The union stated, "Recently, courts have ruled that even if there are conditions such as current employment, bonuses and performance incentives are considered part of ordinary wages," adding, "This lawsuit seeks to claim retroactive payments such as unpaid overtime and annual leave allowances within the statute of limitations for wage arrears (3 years)."

The union estimates that if they win the lawsuit to recalculate ordinary wages, there will be a retroactive payment of 6.5 million KRW for average band employees and 4 million KRW for professional levels 1 and 2, along with an annual increase effect of 2.28 million KRW for band employees and 1.32 million KRW for professional levels 1 and 2. Kim Young-hoon, the union chairman, said, "This lawsuit regarding ordinary wages reflects the current low wage status of Shinsegae Department Store workers," and added, "It is an expression of our determination to reclaim the rights that have been ignored so far."