Useful Info

Since the Labor Standards Act does not stipulate anything regarding the payment of bonus pay, if there are no payment regulations or customs regarding it, or if it has been paid gratuitously, the employer has no obligation to pay bonus pay. However, if bonus pay is explicitly stipulated in advance in a collective bargaining agreement, employment rules, or other labor contracts with conditions such as payment terms, or if it has been continuously paid as a custom, the payment of bonus pay gains binding force as a legal obligation. In such cases, since it is recognized as consideration for labor, it is treated as wages, included in the average wage that serves as the basis for calculating severance pay, and an obligation to pay arises for the employer. Thus, when bonus pay has been paid regularly and customarily, the employer must not only pay the unpaid bonus pay but also, even if the worker retires before the regular bonus payment date, calculate and pay the corresponding bonus pay up to the time of retirement on a pro-rated daily basis, and even after retirement, any unpaid bonus pay during employment must be settled together with severance pay and other unpaid amounts, except in cases where there are special provisions in the employment rules or similar.