The Labor Ministry of Korea publicly announced last August 1 that the minimum wage for 2008 shall be 3,770 Won, which is up 8.3% compared to the minimum wage of 3,480 Won for 2007. It is estimated that about 13.8% of the total workers in Korea, or some 2.12 million workers, will be benefiting from the newly-set minimum wage.

This new minimum wage was passed at the Minimum Wage Committee last June 27, and because there had not been any objections filed from labor organizations in Korea, the minimum wage was confirmed as originally passed.

As the public notice for the new minimum wage has been issued, every employer in Korea will be required to apply the minimum wage (as to their employees) from January 1, 2008, and shall be prevented from lowering any wage on the basis of the newly announced minimum wage. Any employer in violation of the minimum wage requirements and related regulations thereof may be subject to an imprisonment of up to 3 years or a fine of up to 20 million Won.

Finding out whether any wage being is paid is meeting the minimum wage requirement could be done by (i) first deducting any part of wage amounts not regarded as part of minimum wage (e.g., bonus pay, overtime work pay, transportation pay, food allowance, family allowance, etc.) from the total wage amounts, (ii) dividing such net amount by the hours worked, and (iii) comparing the hourly wage amount resulted with the stipulated minimum wage amount.

It should be noted that, if any company out-sources any part of its business to an outside company on an independent contract basis, and the contracting company (the contractor) pays to its employees (working under the contract) wages that are below the stipulated minimum wage, the company giving the contract (the employer company) could be held liable (jointly and severally with the contractor) if such wage payment is attributable to the employer company.