Yulchon Secures Supreme Court Ruling Excluding SK Hynix Bonuses from Statutory Wages
2026.02.28.
Yulchon successfully represented SK Hynix, a leading global semiconductor manufacturer, in a landmark dispute brought by former employees who argued that management performance bonuses should be treated as “wages” under Korean labor law and included in statutory retirement benefits.
The case addressed a highly contentious issue in Korea, especially following a Supreme Court decision involving Samsung Electronics that recognized part of a performance bonus as wages, raising concerns over significant retroactive liabilities for major corporations.
Yulchon represented SK Hynix at all stages of litigation, securing victories at the trial, appellate, and Supreme Court levels. Our team conducted extensive legal research, collaborated with academic experts, and analyzed prior case law, including through AI tools, to demonstrate that such bonuses lack the characteristics of statutory wages.
The Supreme Court ultimately adopted Yulchon’s key arguments, finding no binding obligation to pay the bonus due to the absence of fixed criteria and past instances of non-payment. It also held that bonuses tied to operating profits depend on external factors—such as market conditions and managerial decisions—rather than constituting direct compensation for labor.
This decision is widely regarded as a leading authority clarifying the treatment of private-sector performance bonuses in Korea following earlier Supreme Court rulings on public-sector bonuses. Given the scale of potential liabilities for major corporations, it provides important guidance on wage classification and retirement benefit calculations.
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