Supreme Court: Taxi Company Driver's Wage Should Be Judged Against Minimum Wage Based on Salary After Deducting Shortfall in Daily Quota

Seoul Station taxi stand./Photo by Moon Honam munonam@

[Asia Economy Reporter Heo Kyung-jun] The Supreme Court has ruled that while it is not illegal for taxi companies to set a fixed daily quota and deduct any shortfall from the taxi driver's wages, if the deducted wages fall below the minimum wage, it constitutes a violation of the Minimum Wage Act.

The Supreme Court's Third Division (Presiding Justice Lee Heung-gu) announced on the 6th that it overturned the lower court ruling which dismissed the wage claim lawsuit filed by corporate taxi driver Mr. A against company B, and remanded the case to the Daejeon District Court.

Between 2013 and 2014, Mr. A entered into a wage contract with company B stipulating that if the driver's daily transportation revenue fell short of the set standard amount (97,000 KRW), the difference would be deducted from his wages. Additionally, there was a wage agreement that monthly call operation fees would also be deducted from the wages, with only the remaining amount paid out.

In 2016, Mr. A filed a lawsuit demanding full payment of the deducted amounts, claiming that company B's deduction measures were invalid. Both the first and second trials ruled that setting a fixed daily quota and deducting any shortfall did not violate the Passenger Transport Service Act. However, the courts differed in their judgments regarding the Minimum Wage Act. The first trial accepted Mr. A's claim and ruled that the company violated the Minimum Wage Act, but the second trial ruled that the company did not violate the act.

However, the Supreme Court overturned the second trial's ruling. It stated that the determination of whether the Minimum Wage Act was violated should be based on the wages after deducting the shortfall from the daily quota.

The court stated, "Generally, the wage before deductions is used as the standard, but in this case, unless there are 'special circumstances' such as the driver failing to remit part of the transportation revenue, the actual wages paid after deductions should be the basis for determining violations of the Minimum Wage Act."

This content was produced with the assistance of AI translation services.