Minimum Wage Commission takes up gig and platform workers for first time; labor bloc calls for net-income standard that strips out fuel and vehicle costs

Members of the Korean Confederation of Trade Unions hold a press conference outside the Ministry of Employment and Labor at the Government Sejong Complex on Thursday, calling for an expansion of minimum wage coverage to special-employment and platform workers. [Photo by Kim Young-hoon]
Members of the Korean Confederation of Trade Unions hold a press conference outside the Ministry of Employment and Labor at the Government Sejong Complex on Thursday, calling for an expansion of minimum wage coverage to special-employment and platform workers. [Photo by Kim Young-hoon]

As deliberations on next year's minimum wage get underway, whether delivery riders, parcel couriers and other piece-rate and platform workers should be covered by the minimum wage law has emerged as a central issue — and labor has put a number on it: 17,468 won (about $12) an hour for courier and delivery workers.

The Korean Confederation of Trade Unions presented a proposal titled "Plan for Introducing a Minimum Wage for Piece-Rate Workers" at the Minimum Wage Commission's third plenary session, held Thursday at the Government Sejong Complex.

Piece-rate workers are paid based on output — deliveries completed or cargo transported — rather than hours worked. Delivery riders, parcel couriers and designated-driver service providers are the most common examples. Because most are classified as independent contractors or operate under consignment agreements, they have been excluded from the current minimum wage law.

The issue entered the official agenda after Labor Minister Kim Young-hoon, in this year's minimum wage deliberation request, asked the commission to "review whether a separate minimum wage should be set for workers employed under piece-rate or similar arrangements."

Net income, not gross, should be the benchmark

The KCTU argued that South Korea could adopt a similar system, pointing to existing models abroad — New York City's minimum pay standard for mobility platform workers, Seattle's per-trip minimum compensation for app-based workers and the United Kingdom's fair-rate model.

Labor said the minimum wage for piece-rate workers should be calculated on actual take-home income after deducting work-related expenses, not gross earnings.

Net income — after subtracting fuel costs, vehicle maintenance, communications fees, insurance premiums and the worker's share of social insurance contributions — should meet at least the statutory minimum wage, the KCTU said.

For example, a worker who earns 20,000 won in an hour but incurs 30 percent in work expenses effectively takes home only about 14,000 won, the union said.

The KCTU also said waiting time, travel time and preparation time necessary to perform the work should be counted when calculating the minimum wage.

17,468 won for couriers, 16,702 won for designated drivers

The KCTU also proposed specific hourly minimum wage figures for major piece-rate occupations.

For courier and delivery workers, the union set the base hourly rate at 17,468 won, rising to 20,962 won when a weekly holiday allowance is included and to 22,709 won when severance pay is factored in.

For quick-service couriers, the proposed figures were 14,245 won at the base rate, 17,094 won with the weekly holiday allowance and 18,518 won including severance.

Designated-driver workers were pegged at a base rate of 16,702 won, 20,043 won with the weekly holiday allowance and 21,713 won with severance. Home-visit tutors were proposed at 16,678 won, 20,014 won and 21,681 won respectively. Home-visit inspectors were put at 16,297 won at the base rate and 19,557 won with the weekly holiday allowance.

'Minimum income guarantee possible without shocking the market'

The KCTU rebuffed the argument that extending minimum wage coverage to piece-rate workers would simply burden small business owners.

"If a minimum wage is guaranteed, the number of skilled full-time riders will grow, service quality will improve, and a virtuous cycle of rising orders and sales growth can follow," the union said.

It added that a guaranteed minimum income would reduce the incentive for excessive hours, speeding and dangerous driving, producing positive effects for workplace safety as well.

The KCTU also addressed the legal objection directly. "Some argue that minimum wage cannot apply because piece-rate workers are not employees under the Labor Standards Act," it said, "but the Minimum Wage Commission is a tripartite social body that deliberates on wage issues. Through commission-level discussion, it is possible to devise a way to guarantee a minimum income for special-employment and platform workers while cushioning any market shock."

The business community, however, maintains that platform and special-employment workers are not employees under the Labor Standards Act and that the diversity of industries and contract types makes a uniform minimum wage impractical.


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