Minimum Wage Commission Chairman Kwon Sun-won speaks after the panel voted Tuesday at Government Complex Sejong to set next year's minimum wage at 10,700 won ($7) per hour. In the final 13th round of revised proposals, labor representatives put forward 10,730 won and employer representatives 10,700 won. A vote of 27 commissioners resulted in 11 votes for the labor proposal, 15 for the employer proposal and one invalid ballot, passing the employer-side figure. [Yonhap]
Minimum Wage Commission Chairman Kwon Sun-won speaks after the panel voted Tuesday at Government Complex Sejong to set next year's minimum wage at 10,700 won ($7) per hour. In the final 13th round of revised proposals, labor representatives put forward 10,730 won and employer representatives 10,700 won. A vote of 27 commissioners resulted in 11 votes for the labor proposal, 15 for the employer proposal and one invalid ballot, passing the employer-side figure. [Yonhap]

When next year's minimum wage rises to 10,700 won ($7) per hour, the workers earning that floor will not be the only ones affected.

Weekly holiday pay, unemployment benefits, industrial accident insurance, maternity and parental leave allowances, state compensation payments and a wide range of government support programs are all calculated with reference to the minimum wage — meaning the increase will in effect reset a standard that touches nearly every aspect of daily life.

According to the Ministry of Employment and Labor, 27 laws currently use the minimum wage as a reference point. Under those laws, 43 separate benefits, allowances and compensation payments are linked to it. The minimum wage functions not merely as a wage floor but as a benchmark for social insurance, welfare and government fiscal spending.

The most direct impact falls on workers' pay and employment insurance benefits. Under the Labor Standards Act, workers who put in at least 15 hours a week and fulfill all scheduled workdays are entitled to a paid weekly holiday allowance; when the minimum wage rises, that allowance rises by the same proportion.

Job-seeking benefits for the unemployed are also closely tied to the minimum wage. The floor for those benefits is set at 80 percent of the minimum wage, and the minimum wage is used to calculate certain upper and lower limits for maternity and parental leave benefits as well. It also serves as the benchmark for determining eligibility and benefit levels under government employment-promotion programs, including regional employment incentive grants and hiring encouragement subsidies.

The minimum wage plays an equally important role in industrial accident insurance. Under the Industrial Accident Compensation Insurance Act, it factors into the calculation of temporary disability benefits, injury and disease compensation pensions, and vocational training allowances. In some cases, workers whose average wages fall below the minimum wage receive benefits calculated at the minimum wage level instead.

Various state compensation payments are also pegged to the minimum wage. Notable examples include the lump-sum death compensation for vaccine-related fatalities under the Infectious Disease Prevention Act, compensation under the special act on COVID-19 vaccination injury relief, protection payments for informants under the Act on Protection of Specific Crime Reporters, and criminal compensation under the Criminal Compensation Act. The National Basic Living Security Act and the Framework Act on Social Security also require that the minimum wage be taken into account when setting social benefit levels.

The minimum wage is further used as a reference in government procurement, tax support, national health insurance, employment stability and domestic worker protection systems. The 380-won hourly increase will therefore set off a chain reaction across social insurance, welfare, government support and state compensation frameworks — not simply raise the pay of minimum-wage workers.

The Minimum Wage Commission voted Tuesday to set the minimum wage applicable from 2027 at 10,700 won per hour, up 380 won, or 3.7 percent, from this year. The new rate takes effect Jan. 1 next year.


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