Ministry follows July policy study with field survey of 1,000 workers from October to December
Survey to cover waiting and travel time as well as work-related costs
Pay floor considered regardless of whether workers are legally recognized as employees
Platform companies' burden may shift depending on how pay is calculated
The Minimum Wage Commission this year voted down a plan to apply a separate minimum wage to delivery riders and other subcontracted workers. The government is now moving quickly to design a separate "minimum pay" system.
The Ministry of Employment and Labor launched a policy study in July to examine who would be covered and how pay should be calculated. It is now conducting a field survey of roughly 1,000 workers that will look at waiting and travel times as well as work-related costs.
According to the Ministry of Employment and Labor on Wednesday, the ministry recently commissioned a research project titled "Fact-Finding Survey for Reviewing and Designing the Introduction of a Minimum Pay System." The research budget is 40 million won ($29,800), and the project will run from October through December.
The survey will cover about 1,000 workers in occupations that need priority review for the introduction of a minimum pay system. The specific occupations will be selected during the research process, and the ministry plans to use a regional proportional allocation method to avoid concentrating the sample in any one area.
For delivery riders, the survey may look not only at per-delivery pay but also at time spent waiting for orders and traveling. It may also cover costs such as fuel, vehicle maintenance and insurance. How these factors are evaluated could change the calculation of actual hourly income and the level of minimum pay. However, it has not yet been decided whether or how such time and costs will be factored into the minimum pay calculation.
The fact-finding survey is linked to a policy study the ministry commissioned in July titled "Measures for Introducing Minimum Pay for New Forms of Employment." That 50 million won policy study examines the system's framework, including who would be covered, how pay would be calculated, and the legal basis and enforcement structure. The current survey, by contrast, is aimed at gathering actual data on pay, working hours and costs.
The government moved to consider a minimum pay system because it judged that the current minimum wage law has limits in protecting platform workers and those in special forms of employment. Many of these workers are contracted as individual business owners or are not recognized as employees under the Labor Standards Act. Many are also paid based on the number of jobs completed or on performance, rather than hours worked.
At the Minimum Wage Commission this year, a plan to apply a separate minimum wage to subcontracted workers was voted down. The vote was 15 opposed to 11 in favor, with one invalid ballot. Labor groups argued that a pay floor accounting for actual working hours and job-related costs was necessary. Business groups countered that platform workers and those in special employment are difficult to handle within a minimum wage system premised on employee status. Many of these workers, they noted, are individual business owners.
Minister of Employment and Labor Kim Young-hoon expressed regret that the Minimum Wage Commission's discussion fell through, and announced the ministry's plan to pursue a minimum pay system. The path to setting a pay floor for subcontracted workers within the minimum wage system is now blocked. The ministry is considering a separate system that would guarantee pay above a certain level, regardless of whether the worker is recognized as an employee.
For the business community, although the plan to apply a separate minimum wage to subcontracted workers was rejected, the discussion over a pay floor for platform workers is not over. If a minimum pay system becomes reality, it could affect platform companies' cost structures and labor management, depending on who is covered and how pay is calculated.
The government has not yet decided whether to introduce a minimum pay system or set a specific pay level. The ministry plans to review who would be covered, how pay would be calculated, and how the system would be applied. These decisions will be based on the results of the policy study and the fact-finding survey. Finding the right balance between protecting workers and limiting the burden on businesses is expected to be the key issue in designing the system going forward.
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