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A measure to reduce wages stipulated in employment contracts or employment rules even though the worker has provided labor, which is one of the disciplinary actions. To prevent employers from excessively reducing wages, which are the workers' means of livelihood, thereby threatening their livelihoods, the Labor Standards Act imposes restrictions on wage reduction (pay cut) measures. Article 23 of the Labor Standards Act prohibits pay cuts without just cause, and Article 98 of the Labor Standards Act stipulates that even when employment rules provide for wage reduction penalties, the total amount of wage reduction for a single violation must not exceed half of the average daily wage, and even if there are multiple violations, the total amount of wage reduction must not exceed one-tenth of the total wages for one wage payment period (usually one month). Therefore, pay cut (wage reduction) measures must be carried out in accordance with just cause and procedures, and even if stipulated differently in a collective bargaining agreement, for each pay cut reason, it must not exceed half of the average daily wage, and for multiple pay cut reasons, it must not exceed one-tenth of the total wages for one wage payment period. ▶Article 23 of the Labor Standards Act (Restrictions on Dismissal, etc.) ①An employer shall not dismiss, suspend, place on disciplinary leave, transfer, reduce pay, or impose other punishments on a worker without just cause. ▶Article 98 of the Labor Standards Act (Restrictions on Penalty Provisions) When employment rules provide for wage reduction penalties for workers, the amount of such reduction shall not exceed half of the average daily wage for a single instance, or one-tenth of the total wages for one wage payment period. ▶The total wages referred to in Article 95 of the Labor Standards Act means the total amount of wages regularly paid during one wage payment period. One wage payment period means the wage calculation period for the relevant worker (1 week for weekly pay, 1 month for monthly pay). (As in your inquiry) If the average daily wage is 50,000 won and it corresponds to a 4-month pay cut, the amount per wage reduction instance shall not exceed 25,000 won, which is half of 50,000 won, and the reduction shall be applied over 4 months within that range, but the total wage reduction for 4 months
must not exceed 1/10 of the total wages for one wage payment period (2000.01.20, Labor Standards No. 68207-144).