We often see a prolonged wage negotiation between an employer and a labor union which comes to settle long after the usual wage increase season. In such case, the employer generally gives the employees retroactive pay for the amount of the increase agreed. That means, the difference between the then and the current wage is paid in a retroactive manner. However, this is where one can question whether the retroactive pays caused by the wage increase must be reflected to ordinary wages which are the basis for calculating various statutory allowances including over-time allowance.

(This is an article, attorneys, Yong-Moon Kim and Yo-Sub Shim contributed to CHO Insight of the Korea Economic Daily. You can check the same information on this link. However, it is only provided in Korean.)

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