🔹 Key Ruling

The Supreme Court ruled that bonuses tied to company net profit are NOT considered wages.

Reason: net profit depends heavily on external factors beyond employees’ control.



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🔹 What the Case Was About

Employees sued their company over:

Unpaid statutory allowances

Unpaid retirement pension contributions


Key legal issues:

Whether certain payments qualify as “wages” or “ordinary wages”




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🔹 Core Dispute Areas

1. Regular bonuses with employment condition (must still be employed at payout date)


2. Health insurance premiums paid by the company


3. Performance bonuses based on net profit




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🔹 Supreme Court’s Conclusions

✅ Recognized as Wages / Ordinary Wages

Regular bonuses:

Still qualify as ordinary wages, even with “currently employed” conditions


Employer-paid health insurance premiums:

Considered part of wages



❌ NOT Recognized as Wages

Performance bonuses based on net profit:

Not directly tied to individual work performance

Influenced by:

Market conditions

Management decisions

External economic factors





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🔹 Why Profit-Based Bonuses Don’t Count

“Wages” must be:

A direct reward for labor provided


But net profit is:

A moving target shaped by forces outside employee control


Therefore:

These bonuses lack the necessary link to work performed




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🔹 Impact of the Ruling

Profit-based bonuses:

Excluded from wage calculations

Not included in:

Overtime pay

Retirement pension calculations





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🧠 Bottom Line

If your bonus rides on the company’s profit waves, the law sees it less like a paycheck and more like a tide.
And tides, as it turns out, aren’t something employees can command 🌊

Article: https://www.lawtimes.co.kr/news/articleView.html?idxno=218061