If Your Employer Sends You Home, Suspension Allowance Is at Least 70% of Average Wage -- Standby Orders and Early Dismissals Can Count, and Workplaces Under Five Workers Are Excluded

Suspension allowance is paid when the employer's circumstances stop you from working

Article 46(1) of the Labor Standards Act says that when work is suspended for a reason attributable to the employer, the employer must pay the worker at least 70% of the average wage for the suspension period. Suspension here means a state in which the worker is willing to work but the employer cannot accept the work. It covers not only stopping a factory but also sending workers home or leaving them with no work to do. Days when the worker chose to rest or used annual leave do not count.

Employer fault can be found even without intent or negligence

The reason attributable to the employer is not limited to cases where the employer did something deliberately wrong. Court precedent treats it as including management obstacles arising within the employer's sphere of control. Typical examples are a cut-off supply of materials or parts, weak sales, or fewer orders that leave no work. Force majeure such as a natural disaster is read narrowly, so the employer saying "there was nothing we could do" is not enough to escape the obligation.

A standby order also counts as suspension if it serves a management need

A standby order, where the worker is kept out of work without being given tasks, is also at issue. In the Supreme Court judgment of October 11, 2013 (case 2012da12870), the court held that when an employer places workers on standby for a management need attributable to the employer, that is a suspension under Article 46(1) and the allowance must be paid. If the cause of the standby is the worker's own misconduct or performance, however, lower courts have reached different conclusions on whether the employer is at fault, according to press reports. Because the reason for the order decides the outcome, keep a copy of the order itself.

The amount is calculated as 70% of the average wage

The average wage is the total wages received in the three months before the suspension began, divided by the number of days in that period. Here is a worked example based on assumed figures. If total wages over the last three months were KRW 9 million and the period was 91 days, the daily average wage is about KRW 98,900. Multiplying by 70% gives a daily allowance of about KRW 69,200, or roughly KRW 346,000 for five scheduled working days. If 70% of the average wage is higher than the ordinary wage, however, the employer may pay the ordinary wage instead. Check the ordinary wage line on your pay slip as well.

You can also claim the difference for a day that was only partly suspended

A suspension does not have to last several days. A Ministry of Employment and Labor consultation case involved a worker contracted for four hours a day who was sent home early because business was slow, and the answer was that suspension allowance may be at issue if the workplace has five or more workers. Administrative interpretation explains that if the employer paid less than 70% of the average wage, it must pay the difference between 70% and the amount actually paid. If early dismissals keep happening, note the contracted hours and the hours actually worked for each date.

Workplaces under five workers and reductions approved by a labor commission are the exceptions

There are two exceptions. One is a workplace that regularly employs fewer than five workers. The Ministry states that the rule applies to workplaces with five or more, so below that size it is hard to claim by law unless the employment contract or work rules provide otherwise. The other is Article 46(2): if business cannot continue for an unavoidable reason and the employer obtains approval from the Labor Relations Commission, it may pay less than 70%. In other words, an employer cannot decide on its own to pay half because the economy is bad. Companies that keep staff on during a downturn can also apply for an employment retention subsidy under employment insurance, so you can ask whether your employer has applied. Conditions and limits must be confirmed at your nearest employment center.

Not paying is a criminal offence, and you can file a complaint with the labor office

The government's everyday-law guide says an employer who fails to pay suspension allowance can be punished by up to three years in prison or a fine of up to KRW 30 million. You can claim unpaid amounts by filing a complaint with the labor office that covers the workplace. Because the procedure for investigating unpaid wages has changed, read the guide to direct investigation by labor inspectors and the complaint process first. If the company has closed altogether and there is no one to pay, check how to apply for the insolvency wage guarantee fund, since suspension allowance is among the wages it covers. If a long suspension ended in dismissal, also check whether one of the exceptions to dismissal notice pay applies.

Steps to take before you sign anything

Step 1, record why you were told to stay home. Messages, a standby order or a shortened-hours schedule all serve as evidence. Step 2, confirm the size of the workplace. Whether you can claim depends on whether it regularly has five or more workers. Step 3, check the average and ordinary wage on your pay slips. The last three months of pay are the basis. Step 4, get advice before signing an unpaid leave consent form or a suspension agreement. What you sign can change the allowance question, so ask the Ministry of Employment and Labor customer center at 1350 first.

This article is general information based on Article 46 of the Labor Standards Act and Ministry guidance and does not replace legal advice. Whether employer fault exists and the amount owed depend on the circumstances of the workplace, so confirm your specific case with the labor office or a certified labor attorney.