Business circles, which have long complained about growing labor costs here, expressed their concerns about Wednesday’s Supreme Court ruling that bonuses, if paid regularly, should be considered part of the ordinary wage.

Following the ruling, industry watchers warned that more companies, especially those with global operations, could consider moving their production base out of Korea.

Ordinary pay is used as the base to calculate overtime, nighttime and holiday pay, and affects the amount offered in severance packages. Bonuses have thus far not been included in ordinary pay.

Earlier, the Korea Employers Federation predicted that if bonuses are included in ordinary pay, businesses as a whole would spend an additional 21.9 trillion won ($20 billion) in the first year of implementation alone.

Among others, the labor-intensive auto industry is expected to be hit hard by the new ruling.

Hyundai Motor this year struggled with a production loss due to labor tension on its home turf and covered the reduction at its overseas factories.

The carmaker, which currently spends 9.3 percent of its total sales on labor costs per year, could see its spending increase by 1.3 percent, according to Lee Sang-hyun, an analyst at NH Nonghyup Securities.

“Companies are required to pay their employees omitted wages from the past three years and it is also inevitable that the nation’s average income will hike in the coming years,” he said.

However, he was cautious about excessive concerns, saying, “There are other separate legal disputes going on and it takes three to five years until the final rulings. It is also likely for individual workplaces to reach their own agreements with unions.”

Other foreign-based carmakers have also voiced their concerns about Korea’s wage ruling.

General Motors CEO Dan Akerson brought up the issue in his talks with President Park Geun-hye during her U.S. trip in May. GM’s Korean factories produce more than 40 percent of Chevrolet vehicles sold globally.

In his recent visit to Korea, Jerome Stoll, chief performance officer and sales and marketing director at Renault Group, also cited the high cost of production as one of the key concerns for maintaining its Busan factory.

By Lee Ji-yoon (jylee@heraldcorp.com)