Deliberations have begun at South Korea’s Minimum Wage Commission on next year’s minimum wage. This year’s talks are expected to feature sharp labor-management clashes not only over the size of any increase but also over who is covered and how the system is applied. Key issues include whether to extend minimum-wage protections to piecework-based workers and whether to set different rates by industry or region.
◆Will platform and nonstandard workers be covered? Labor minister asks for review
On the 21st, the Ministry of Employment and Labor said the commission held its first plenary meeting at the Government Complex Sejong. The 27 members representing labor, management and the public interest began full-scale discussions on the minimum wage’s coverage and level.
An early flashpoint is the structure of the system itself, particularly whether the minimum wage should apply to piecework workers. The term refers to workers paid based on performance, such as delivery riders and parcel couriers.
Labor groups raised the same issue at the commission in 2024, arguing that platform workers and other nonstandard workers should be included. No conclusion was reached then because of disagreements between labor and management and a lack of data. At the request of public-interest members, the government later conducted a fact-finding survey on items such as the target group, scale and income.
The issue is expected to move forward this year. Employment and Labor Minister Kim Young-hoon, in a formal request for deliberation, asked the commission to consider “whether to set a separate minimum wage for piecework (or similar) workers for whom it may not be appropriate to set a minimum wage on an hourly, daily, weekly or monthly basis.”
Labor argues that as work arrangements diversify, minimum-wage protections should expand. It says the issue can no longer be delayed, particularly because the government’s research was reflected in the minister’s request.
Business groups are cautious about expanding coverage. They argue many piecework workers should be viewed as independent business operators rather than employees, and warn that broader coverage could sharply raise labor costs. They also say uniform standards are difficult given varied contract structures.
◆Labor-management fight intensifies over differentiated rates
Whether to apply different minimum wages by industry is also emerging as a major issue. Industry-based differentiation was tried once in 1988, the first year the system was implemented, but a single nationwide minimum wage has been maintained since the following year. A vote was held last year as well, but the proposal failed amid strong opposition.
Business groups say minimum wages should be differentiated for vulnerable sectors such as food and lodging and transportation, arguing many employers in those industries have limited ability to pay. In 2024, the share of workers paid below the minimum wage in sectors including food and lodging was found to exceed 30%.
Labor counters that differentiated rates would undermine the purpose of the system and could lead to structural discrimination. It warns that wages in certain industries could become entrenched, effectively creating a “low-wage benchmark.” Labor also cites concerns about stigmatizing vulnerable sectors and the possibility that differentiation could expand to more industries.
Debate is also continuing over regional differentiation. Business groups argue it is unreasonable to apply the same minimum wage nationwide given differences in prices and business conditions between Seoul and other areas. Labor says paying different wages by region is clear discrimination.
Some countries, including Japan, apply regional minimum wages, setting higher rates in major cities with higher productivity and prices than in rural areas. Critics, however, say such systems can widen regional gaps and accelerate the decline of provincial areas.
* This article has been translated by AI.
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