Wage Cut of 30 Million Won Without Worker Consent... Company CEO Sentenced to Fine

The company representative who reduced wages without the consent of the workers was sentenced to a fine.

According to the legal community on the 18th, Judge Lee Se-chang of Criminal Division 8 at the Seoul Western District Court sentenced Mr. A (70), the representative of a loss adjustment company, to a fine of 5 million won for violating the Labor Standards Act and the Employee Retirement Benefit Security Act.

Mr. A employs 50 regular workers in Mapo-gu, Seoul, and is accused of reducing the wages of employee Mr. B, who worked as an executive for about 26 months from January 2018 to August 2022 before retiring, by approximately 30 million won and failing to pay delayed interest and other amounts.

According to current law, when a worker dies or retires, the employer must pay wages, compensation, and all other monetary benefits within 14 days from the date the payment obligation arises. However, if there are special circumstances, the deadline may be extended by agreement between the parties.

Mr. A did not pay the reduced amount without the parties' agreement, and also failed to pay about 2.75 million won, including 2.49 million won in the difference of the defined contribution retirement pension payment and 260,000 won in delayed interest resulting from this.

The court stated, "Wage reduction is unfavorable to the worker, and whether the worker consented must be judged strictly and carefully," adding, "The defendant has not presented objective evidence or grounds to acknowledge that the worker agreed to the wage reduction, and considering that the defendant has no prior criminal record except for a fine imposed long ago, the court decided accordingly."