The Ministry of Employment and Labor is moving to introduce a minimum pay system for piece-rate workers, including dependent contractors and platform workers, who fall outside the scope of the minimum wage. Rather than widening the definition of workers under the Minimum Wage Act, the ministry plans to set a separate pay floor to close gaps in labor protections.
Labor Minister Kim Young-hoon said on the 23rd that an estimated 8 million dependent contractors and platform workers have weak labor protections and are excluded from the minimum wage, adding that the ministry has commissioned research toward introducing a minimum pay system. He spoke on the YouTube program "Baek Un-gi's Jeong-eori TV."
Delivery riders, parcel couriers and other dependent contractors and platform workers are often paid based on output or per-job fees rather than hours worked. The current Minimum Wage Act applies to workers as defined under the Labor Standards Act, making it difficult to extend the minimum wage to those not recognized as employees.
Labor groups called on this year's Minimum Wage Commission to extend minimum wage coverage to piece-rate workers. Business groups opposed the move, arguing that a uniform pay floor cannot be applied to such workers. The discussion ended without agreement.
The ministry has since begun designing a separate minimum pay system. It commissioned research twice, in July and this month, and the latest study will survey the actual income of about 1,000 piece-rate workers. The study will calculate real hourly pay by factoring in time spent providing services and costs required to perform the work, such as fuel and communications expenses, and compare the result with the current minimum wage.
The key questions are who would be covered, where the pay floor would be set and who would bear the cost. Kim said coverage, standards and the cost burden are the main points of contention, and that tripartite talks among labor, management and the government are essential to introducing the system. Some observers expect those talks to be difficult, given that the earlier Minimum Wage Commission discussions collapsed over business opposition.
