5 Key Issues You Must Know to Win an Ordinary Wage (통상임금) Lawsuit in Korea

What Is an Ordinary Wage Lawsuit?

Current standard (July 2026) — the Supreme Court en banc decision of 19 December 2024 (2020다247190, 2023다302838) abolished the "fixedness" requirement for ordinary wage. The test is now consideration for contractual work, regularity and uniformity, and regular bonuses carrying a continued-employment or minimum-workdays condition do qualify. Any "fixedness" discussion below reflects the former 2013 standard. The new standard applies, in principle, to ordinary-wage calculations made on or after the ruling date (19 December 2024).

An ordinary wage (통상임금) lawsuit is a claim by a worker for the difference in pay when an employer excluded certain allowances from ordinary wage and therefore underpaid overtime, night-shift, and holiday work allowances, severance pay (퇴직금), and other statutory entitlements. Ordinary wage is defined under Article 6 of the Enforcement Decree of the Labor Standards Act (근로기준법 시행령 제6조) as "wages set to be paid regularly and uniformly as consideration for contracted work (소정근로)," and it serves as the calculation base for various statutory allowances.

Note for foreign workers: Your employment contract may specify allowance amounts, but statutory minimums based on ordinary wage apply regardless — contractual terms cannot fall below the statutory floor.

Key Issue 1 — Whether a Payment Qualifies as Ordinary Wage

The 2024 Supreme Court en banc ruling (2020Da247190) abolished the existing "fixedness" (고정성) requirement and changed the legal standard so that whether a payment is consideration for contracted work is the central question. As a result, bonuses conditioned on being employed at a specific point in time are now more likely to be recognized as ordinary wage if they are consideration for contracted work. When preparing a lawsuit, carefully review the payment rules, collective agreement (단체협약), and work rules (취업규칙) to first confirm whether the allowance in question is consideration for contracted work.

Key Issue 2 — The Good-Faith (신의칙) Defense

An employer may raise a good-faith defense, arguing that recalculating ordinary wage would cause "serious managerial difficulties" (대법원 2012다89399·2012다94643). However, courts scrutinize this defense very strictly. The mere fact that the additional payment amount is large is not sufficient; the court considers the company's financial condition, ability to pay, and the history of labor-management negotiations comprehensively. Workers should obtain the company's financial statements and operating profit data to prepare counter-arguments.

Key Issue 3 — Statute of Limitations

Wage claims are subject to a 3-year statute of limitations under Article 49 of the Labor Standards Act (근로기준법 제49조). Only unpaid wages within 3 years counted back from the date the lawsuit is filed can be claimed, so it is advantageous to file without delay even after leaving the company. A certified letter (내용증명) operates as a demand (최고) under Article 174 of the Civil Act (민법 제174조) — it preserves the claim only if a judicial claim or a similar step follows within 6 months. A complaint to the Labor Office (노동청 진정) is not by itself a ground for interrupting the statute of limitations under Article 168 of the Civil Act (민법 제168조 — a claim, seizure or similar measures, or the employer's acknowledgment of the debt), so consult a professional to determine the right timing.

Key Issue 4 — Recalculation of Severance Pay and Other Allowances

When ordinary wage increases, not only overtime, night-shift, and holiday work allowances but also severance pay may increase. If ordinary wage exceeds average wage (평균임금), ordinary wage is used as the basis for calculating severance pay pursuant to Article 2(2) of the Labor Standards Act (근로기준법 제2조 제2항). Workers with longer tenures and more overtime hours stand to claim larger amounts.

Key Issue 5 — Evidence Collection and Litigation Strategy

The most important items in litigation are pay stubs (급여명세서), work rules (취업규칙), collective agreements (단체협약), and employment contracts (근로계약서). These documents are the key evidence proving the ordinary wage calculation standard and payment practices. If you are still employed, it is advisable to secure the relevant documents before leaving the company. Filing a collective lawsuit with fellow workers can also help share litigation costs and strengthen the evidentiary record.

Calculate Your Severance Pay Difference in Advance at Workbear

If you are curious about how much your severance pay would change if ordinary wage is recalculated, try the Workbear (workbear.kr) severance pay calculator. You can calculate severance pay directly based on ordinary wage, and the AI search function lets you quickly check related court rulings and administrative interpretations.

This article is for informational purposes only and does not constitute legal advice. For specific cases, consult a certified labor attorney (노무사) or lawyer.