🚨 Comprehensive Wage System

Today Korean Social News for Beginners | 2025.12.15

0️⃣ Youth Labor Exploitation Controversy and Reform Challenges

📌 President Raises Comprehensive Wage System Controversy: Youth Exploitation or Necessary System?

💬 President Lee Jae-myung strongly criticized the comprehensive wage system as being misused to exploit young workers during a Ministry of Employment and Labor briefing, reigniting social debate about the system. The comprehensive wage system is a payment method that includes overtime, night, and holiday allowances in advance. It is allowed only in limited cases where working hours are hard to calculate. However, in practice, it has been repeatedly criticized as a tool to hide long working hours and avoid paying overtime wages. The Ministry of Employment and Labor explained that while abuse of the system is problematic, complete abolition has practical limitations because some industries like finance, IT, and broadcasting have work characteristics that make calculating working hours difficult. The government is expected to focus on strengthening management and supervision to prevent abuse and improving legal standards rather than abolishing the system.

💡 Summary

• The comprehensive wage system includes overtime, night, and holiday allowances in advance when paying wages.
• It is being misused to justify long working hours and unpaid wages for young workers.
• Instead of complete abolition, mandatory working hour recording and stronger prevention of abuse are proposed as alternatives.

1️⃣ Definition

The comprehensive wage system means a payment method that includes allowances for overtime work, night work, and holiday work as predetermined amounts in the wage. Although there is no explicit provision in the Labor Standards Act, it has been recognized in a limited way through Supreme Court precedents in cases where calculating working hours is difficult.

The original purpose of the system was to provide administrative convenience and work flexibility when calculating working hours is difficult, such as in surveillance or intermittent work, or work where the nature makes accurate time calculation hard. For example, this applies to sales positions with frequent business trips or field work, or IT developers who work on a project basis. However, in reality, many cases have become social problems where it is misused as a tool to force long working hours while not paying overtime wages.

💡 Why is this important?

• Young workers are being forced to work long hours because of the comprehensive wage system.
• Labor rights violations are occurring due to the gap between actual working hours and wages.
• Preventing system abuse and strengthening working hour management are urgent tasks.
• The basic principle of the Labor Standards Act - compliance with legal working hours - is being undermined.

2️⃣ Current Status and Problems of the Comprehensive Wage System

📕 Background and Scope of the System

• It has been recognized in a limited way through Supreme Court precedents. The main background is as follows:

  • Legal basis was established when a 1992 Supreme Court precedent first recognized the comprehensive wage system.
  • The court ruled it was valid only when calculating working hours was difficult and it was not significantly disadvantageous to workers.
  • Since then, the Supreme Court has gradually narrowed the scope of application by ruling invalid in cases of abuse.
  • Main applications included surveillance/intermittent work, sales positions with frequent field work, and project-based IT development.

• It is being used in some industries like finance, IT, and broadcasting. The main characteristics are:

  • Work hours are often irregular or project-based due to the nature of the work.
  • There is a structural characteristic that makes it difficult to calculate working hours precisely by the minute.
  • It operates through labor-management agreements by including allowances in the base salary.
  • However, the agreement process is often formal, and in reality, it is often a unilateral decision by management.

📕 Misuse as a Tool to Exploit Young Workers

• It is being used as a tool to hide long working hours. The main problems are:

  • When applying the comprehensive wage system, actual working hours are not recorded, making it impossible to verify overtime work.
  • Even when long working hours exceeding 52 hours per week occur, only fixed salaries are paid without additional allowances.
  • Young workers especially have no choice but to accept unfair conditions due to lack of experience and weak bargaining power.
  • Even when overtime and weekend work become routine, it is difficult to prove violations of legal working hours.

• Wage theft and rights violations are widespread. Main examples include:

  • Base salary is at minimum wage level, but the comprehensive wage system is applied to avoid paying overtime allowances.
  • Companies unilaterally claim comprehensive wage system even when it's not specified in the contract.
  • Even after leaving the company, it is difficult to prove unpaid wages because there are no working hour records.
  • Many give up legal action or changing jobs due to concerns about career and reputation impacts.

📕 Institutional Limitations and Poor Supervision

• The legal basis is not clear. The main limitations are:

  • Since there is no explicit provision for the comprehensive wage system in the Labor Standards Act, it relies on precedents.
  • There is a lack of clear standards for when it is allowed and what requirements must be met.
  • There is a principle that even with labor-management agreement, it is invalid if disadvantageous to workers, but the judgment criteria are vague.
  • Legal uncertainty gives companies room to interpret and apply the system arbitrarily.

• Working hour management and supervision are inadequate. The main problems are:

  • Clock-in/clock-out recording obligations are not properly followed, making it difficult to determine actual working hours.
  • The Ministry of Employment and Labor lacks inspection personnel and budget for comprehensive inspections.
  • Even when complaints are filed, they are handled after the fact, resulting in low preventive effects.
  • Fines and punishment levels are low, so companies accept the violation costs and abuse the system.

💡 Main Problems of the Comprehensive Wage System

1. Long working hours: Only fixed salary paid even when exceeding 52 hours per week without additional allowances
2. No working hour records: Difficult to prove overtime work because actual working hours cannot be verified
3. Insufficient legal basis: Only relies on precedents without explicit provisions in Labor Standards Act
4. Young worker vulnerability: Accept unfair conditions due to lack of experience and weak bargaining power
5. Poor supervision: Failure to prevent abuse due to lack of labor inspection personnel and low penalties

3️⃣ Reasonable Improvement Measures

✅ Mandatory Working Hour Recording

• All workplaces must mandatorily record clock-in/clock-out times. The main directions are:

  • Even when applying the comprehensive wage system, actual working hours must be mandatorily recorded.
  • Accurate records must be kept using electronic clock-in/clock-out systems or attendance management apps.
  • Strong sanctions should be imposed on companies that do not record or falsely record.
  • Based on working hour records, actual overtime work should be verified and unpaid wages should be settled.

• Workers should be able to easily check their working hours. The main tasks are:

  • Working hour records should be transparently disclosed to workers so they can verify them themselves.
  • Monthly and weekly working hour totals should be automatically calculated so workers can know if legal working hours are exceeded.
  • Records should be usable as evidence when disputes over working hours occur.
  • The Ministry of Employment and Labor should regularly inspect working hour records and catch violating workplaces.

✅ Clarifying Legal Standards

• Requirements for applying the comprehensive wage system should be clearly stipulated by law. The main measures are:

  • A comprehensive wage system clause should be newly established in the Labor Standards Act to specify permission requirements and procedures.
  • Specific industries and job positions where it can be applied should be enumerated or standards should be presented.
  • The labor-management agreement process should be strengthened to ensure substantial consultation rather than formal consent.
  • It should be invalid when significantly disadvantageous to workers, but judgment criteria for disadvantage should be clarified.

• Punishment for abuse cases should be strengthened. The main directions are:

  • Strong fines should be imposed on companies that do not pay overtime allowances using the comprehensive wage system as an excuse.
  • Companies that repeatedly violate should be able to criminally prosecute their representatives or HR managers.
  • Unpaid wages should be forced to be fully settled with delayed interest.
  • Names of companies abusing the comprehensive wage system should be disclosed to apply social pressure.

✅ Strengthening Worker Rights Protection

• Counseling and relief procedures for young workers should be expanded. The main tasks are:

  • The Ministry of Employment and Labor and local governments should expand youth labor counseling windows and increase accessibility.
  • Procedures for reporting and receiving relief when the comprehensive wage system is unfairly applied should be guided.
  • Legal support and labor attorney consultations should be provided free of charge to reduce the burden on young workers.
  • Whistleblower protection systems should be strengthened so rights can be asserted without disadvantages.

• The role of labor unions and civil society organizations should be strengthened. The main directions are:

  • Labor unions should actively discover cases of comprehensive wage system abuse and raise issues.
  • Civil society organizations should carry out activities to protect young worker rights and raise social awareness.
  • Legal battles that are difficult for individual workers to bear should be supported through collective responses.
  • Unfair labor practices by companies should be monitored and critical public opinion should be formed.

4️⃣ Related Terms Explained

🔎 Labor Standards Act

• The Labor Standards Act is a law that sets minimum standards for working conditions.
  • The Labor Standards Act was enacted in 1953 and is a law that guarantees workers' basic rights and minimum standards for working conditions. It regulates all aspects of labor relations including working hours, breaks, holidays, wages, and dismissal. It applies to all workplaces, and violations are punished.
  • Key content related to working hours includes: First, legal working hours are 8 hours per day and 40 hours per week. Second, overtime work is possible up to 12 hours per week by labor-management agreement, allowing work up to a maximum of 52 hours per week. Third, overtime, night, and holiday work must be paid with an additional 50% of ordinary wages. Fourth, exceeding legal working hours or not paying additional wages is illegal.
  • Although the comprehensive wage system has no explicit provision in the Labor Standards Act, it cannot deviate from the law's basic principles of legal working hours and the obligation to pay additional wages. Even when applying the comprehensive wage system, if actual working hours exceed 52 hours per week, it is illegal, and not paying allowances for overtime work constitutes wage theft. The Supreme Court also emphasizes the mandatory nature of the Labor Standards Act and restricts abuse of the comprehensive wage system.

🔎 Supreme Court Precedents

• The comprehensive wage system has been recognized in a limited way through Supreme Court precedents.
  • Since the comprehensive wage system has no explicit provision in the Labor Standards Act, Supreme Court precedents have served as the legal basis. In 1992, the Supreme Court first recognized that the comprehensive wage system could be applied by labor-management agreement when calculating working hours was difficult. However, it added the condition that it should not be significantly disadvantageous to workers.
  • Since then, the Supreme Court has issued several rulings restricting abuse of the comprehensive wage system. First, it ruled invalid when the comprehensive wage system was applied while the base salary was below minimum wage. Second, it did not recognize claims of comprehensive wage system when actual working hours were not recorded at all. Third, it ruled invalid when the comprehensive wage system was applied to positions where working hours could be calculated. Fourth, it negated validity when labor-management agreement was formal and there was no substantial consultation.
  • Recent precedents tend to further narrow the scope of applying the comprehensive wage system. The Supreme Court emphasizes that since the comprehensive wage system is an exception to the Labor Standards Act, it should be strictly interpreted. The burden of proving that calculating working hours is difficult lies with the employer, and simply having irregular work is insufficient. As disputes over the comprehensive wage system increase, court judgment standards are also becoming clearer.

🔎 Working Hour Management

• Working hour management is the core of wage calculation and labor rights protection.
  • Working hour management means accurately recording and managing workers' clock-in/clock-out times and actual working hours. The Labor Standards Act imposes an obligation on employers to record and preserve working hours, and violators are fined. Working hour records are used for wage calculation, verifying overtime work, and as evidence when disputes occur.
  • Key elements of working hour management include: First, clock-in/clock-out times must be accurately recorded using electronic clock-in/clock-out systems or attendance management apps. Second, actual working hours excluding break time must be calculated. Third, weekly and monthly working hours must be totaled to verify whether legal working hours are exceeded. Fourth, overtime, night, and holiday work hours must be separately distinguished to accurately calculate additional wages.
  • The main reason the comprehensive wage system is abused is poor working hour management. If clock-in/clock-out records are not properly kept or are only kept formally without identifying actual working hours, there is no way to prove even when long working hours occur. The government is considering strengthening working hour recording obligations and strengthening punishment for violations. Working hour management must be transparent to prevent abuse of the comprehensive wage system and protect worker rights.

🔎 Platform Labor and Flexible Work

• The traditional concept of working hours is changing due to digital transformation.
  • Platform labor and flexible work are new forms of labor that have spread due to digital technology development. Platform labor is a method of receiving work through apps or platforms such as delivery, designated driving, or freelancing, and flexible work refers to remote work or telecommuting that works regardless of time and place. These have no traditional concept of commuting and working hours are irregular.
  • Characteristics of these forms of labor include: First, there are many short and irregular tasks, making it difficult to calculate working hours by the minute. Second, the workplace is not fixed, making it difficult to leave clock-in/clock-out records. Third, work is done on a project or task basis, so evaluation is performance-centered rather than time-based. Fourth, the employment relationship is unclear, making the applicability of the Labor Standards Act itself controversial.
  • The comprehensive wage system can be a complementary tool for such flexible forms of labor, but the risk of abuse is also high. This is because excessive labor can be forced while not paying appropriate wages on the grounds that calculating working hours is difficult. Experts emphasize that a new regulatory system suited to platform labor and flexible work is needed. The tasks are redefining the concept of working hours, rationally designing performance-based wage systems, and establishing worker protection measures.

5️⃣ Frequently Asked Questions (FAQ)

Q: I'm working under the comprehensive wage system - can I receive overtime pay?

A: If actual working hours exceed the contract, you can claim overtime pay.

• Even when applying the comprehensive wage system, if actual working hours exceed the contracted hours, you have the right to receive additional allowances. For example, if the contract states 40 hours per week with 10 hours of overtime included, but you actually worked 60 hours per week, you can claim allowances for the 10 extra hours.
• To make a claim, you must prove actual working hours. First, collect evidence such as clock-in/clock-out records, work logs, and email transmission times. Second, colleague testimony or company internal materials also help. Third, you can file a complaint with the Ministry of Employment and Labor or consult with a labor attorney. Fourth, even after leaving the company, you can claim unpaid wages within 3 years. It is important to keep detailed working hour records regularly.

Q: Can the company unilaterally apply the comprehensive wage system?

A: Unilateral application without labor-management agreement is invalid.

• The comprehensive wage system is valid only when there is clear labor-management agreement. The employment contract or collective agreement must specifically state the fact of applying the comprehensive wage system, the types and amounts of allowances included, and basic working hours. Explanations only verbally or unilateral notification by the company have no legal effect.
• If the comprehensive wage system is being applied without agreement, you can refuse it. First, demand normal overtime pay based on the fact that it is not specified in the contract. Second, if the company refuses, you can file a complaint with the Ministry of Employment and Labor. Third, if there is a labor union, it is effective to raise the issue collectively. Fourth, if you fear legal action, there is also a method of claiming unpaid wages after leaving the company. Do not tolerate unfair application of the comprehensive wage system and actively assert your rights.

Q: Is there a possibility of complete abolition of the comprehensive wage system?

A: Strengthening prevention of abuse and improving management supervision is more realistic than complete abolition.

• The government is expected to focus on system improvements to prevent abuse rather than complete abolition of the comprehensive wage system. This is because in some industries like finance, IT, and broadcasting, calculating working hours is actually difficult due to work characteristics, making it unrealistic to eliminate the system itself. Instead, policies are likely to be pursued to prevent abuse through mandatory working hour recording, clarifying legal standards, and strengthening supervision.
• In the long term, a comprehensive wage system clause can be newly established in the Labor Standards Act to clearly stipulate permission requirements and procedures. Also, discussions are needed to prepare new concepts of working hours and wage systems in response to the spread of platform labor and flexible work. From the worker's perspective, whether rights can actually be protected is more important than whether the system is abolished. It is necessary to accurately record working hours, actively raise issues when receiving unfair treatment, and speak up through collective responses.

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