May 1st, known as Labor Day or International Workers’ Day, is a significant day for workers worldwide. In South Korea, it is officially recognized as a paid holiday under the Labor Standards Act. As we approach Labor Day 2024, let’s discuss the holiday’s implications for workers and how to calculate holiday pay for those who work on this day.
- What is Labor Day?
Labor Day, also known as May Day, is celebrated on May 1st to honor workers’ rights, improve working conditions, and promote solidarity among workers globally. In South Korea, Labor Day was initially observed on March 10th since 1958 but was later moved to May 1st in 1994.
While Labor Day is a paid holiday under the Labor Standards Act, it is not marked in red on the calendar like other public holidays. This means that although it is a holiday, the decision to grant a day off remains at the employer’s discretion based on internal company policies. Public institutions such as government offices and schools operate as usual on this day.
- Working on Labor Day
For workers in general businesses who are required to work on Labor Day, it is considered holiday work and should be compensated accordingly. Employers must either provide holiday pay or offer substitute time off. For example, if a bank located within a government office remains open on Labor Day, its employees are entitled to receive holiday pay. - Calculating Holiday Pay
The calculation of holiday pay differs for monthly salaried and hourly wage workers.
For monthly salaried workers, holiday pay is already included in their monthly salary. If they work on Labor Day, they receive their regular wages (100%) plus an additional 50% of their ordinary wages for work up to 8 hours. If they work more than 8 hours, the additional pay increases to 100% of their ordinary wages.
- Monthly salaried workers:
1) Regular wages (100%) + Holiday pay (50%, up to 8 hours) = 150% of ordinary wages
2) Regular wages (100%) + Holiday pay (100%, over 8 hours) = 200% of ordinary wages
For hourly wage workers, they receive a day’s worth of wages if they do not work on Labor Day. If they work, they are entitled to their regular wages (100%), paid holiday wages (100%), and an additional 50% of their ordinary wages for work up to 8 hours. If they work more than 8 hours, the additional pay increases to 100% of their ordinary wages.
- Hourly wage workers:
1) Regular wages (100%) + Paid holiday wages (100%) + Holiday pay (50%, up to 8 hours) = 250% of ordinary wages
2) Regular wages (100%) + Paid holiday wages (100%) + Holiday pay (100%, over 8 hours) = 300% of ordinary wages
Employers who fail to provide additional holiday pay may face legal penalties under Articles 56 and 109 of the Labor Standards Act. However, businesses with fewer than five employees are exempt from paying additional holiday wages.
- Substitute Time Off
Instead of receiving holiday pay, workers can request substitute time off. They are entitled to compensatory leave equivalent to 1.5 times their average working hours. For example, workers who typically work 8 hours a day should be granted 12 hours of rest time.
As we celebrate Labor Day 2024, let us recognize the value and importance of labor and support the hard work of all employees. Understanding workers’ rights and ensuring fair compensation for holiday work is crucial in creating a just and equitable workplace.
