FIC Logo

Useful Info

Back to List
Wage/Severance

What is the Inclusive Wage System?

10/1/2025
Views 1
Author:system
The inclusive wage system or inclusive calculated wage system, unlike the usual wage calculation method, does not calculate and pay separate allowances for overtime, night work, and holiday work after determining the basic wage; instead, it refers to a wage system that pays monthly by including allowances in the basic wage or setting a fixed amount as an allowance without considering actual working hours. Cases where the inclusive wage system is recognized include situations where, due to the nature of the work or job characteristics, working hours and rest times are irregular, or workers have discretion to determine working hours etc., making it difficult to measure working hours, or even if measurement is possible, overtime and night work etc. are inherently included in the work form (e.g., salt farm company employees whose working hours vary depending on site construction conditions, drivers with irregular working hours, apartment security guards, etc.), or cases where a fixed amount is paid as an allowance for the convenience of calculation and to boost work motivation. Additionally, for the inclusive wage system to be valid, the labor contract must clearly state that allowances are included in the basic wage and wages are paid accordingly, the worker must consent, and the inclusive wage must not disadvantage the worker. If the allowances received under the inclusive wage system fall short of the allowances calculated under the Labor Standards Act due to actual overtime, night, or holiday work, the difference can be claimed and received. However, the Supreme Court ruled in a case where petition police claimed the difference between the Labor Standards Act allowances for one hour of actual overtime, night, and holiday work and the allowances received under the inclusive wage that all Labor Standards Act allowances are included in the inclusive wage. According to this ruling, workers with special work forms like petition police cannot claim the difference between Labor Standards Act allowances and inclusive wage allowances. The inclusive wage system began to be recognized through Supreme Court precedents, but prioritizing the labor contract stating 'allowances are included in the basic wage' over the Labor Standards Act, which aims to protect socially and economically weak workers, results in inadequate protection of workers' rights.

Comment 0

Please log in to leave a comment.

Non-members can only view comments.

Log In