From November 19, 2021, employers must issue written wage statements that set out the total amount of wages, the amount for each wage item (including how each item is calculated if the amount varies depending on the number of days and hours worked) and the number of overtime, nighttime or holiday work hours and the details of any deduction of wages. The written wage statement can be issued in electronic format.

This is the result of a recent amendment to the Labor Standards Act which mandates the written wage statement to include the exact number of overtime hours worked as well as how the allowance amount was calculated. This unprecedented level of detail could lead to disputes over the actual number of overtime hours worked and the allowance amount due and it would be prudent to have clear standards in place to calculate the exact number of overtime hours worked.

Employers with a fixed overtime allowance system in place should be aware that the number of overtime hours in excess of the predetermined “fixed” overtime hours must be stated in the written wage statement together with the overtime allowance amount correlating to such excess overtime hours. If the actual number of overtime hours does not exceed the predetermined overtime hours already covered by the “fixed” overtime allowance set out in the employment agreement or rules of employment of the company, the number of predetermined overtime hours need not be explicitly stipulated in the written wage statement.

An employer that fails to provide written wage statements may be subject to administrative fines of KRW 300,000 (first violation), KRW 500,000 (second violation) and KRW 1,000,000 (third or more) for each employee. The administrative fines for false or inaccurate statements in the written wage statement are KRW 200,000 (first violation), KRW 300,000 (second violation) and KRW 500,000 (third or more) for each employee.