Public-Sector Contract Workers in South Korea to Earn More Than Minimum Wage

Public-sector contract workers in South Korea will begin receiving wages above the minimum wage under guidelines announced jointly by the government and related ministries on the 8th.

The rules apply to service and commissioned contracts outsourced by central government agencies, local governments, education offices, national and public educational institutions, public agencies, local public enterprises, their subsidiaries and local government-funded organisations.

When contracting agencies calculate estimated prices, they must use market labor rates rather than the minimum wage as the basis for labor costs. This year’s minimum wage, converted to a daily amount, is 82,560 won. The market-rate benchmark sets minimum daily pay at 95,767 won for cleaning and security workers, while machinery maintenance and general machinery repair workers receive rates in the 130,000-won range.

For occupations without an established market rate, agencies must set pay at a similar level to comparable occupations with one. A Labor Ministry official said market rates are recalculated each year using factors including the minimum wage and inflation, allowing workers to remain above the minimum wage.

Second-tier subcontracting is generally prohibited. When it is considered unavoidable, a subcontracting review committee must assess the arrangement in advance. Exceptions include cases defined by law or ordinance, the use of new technology or specialist expertise, and temporary or intermittent work.

The committee must have at least five members, including the contracting official, a Labor Relations Commission mediator and outside experts such as labor consultants or lawyers. At least 40% of its members must come from outside the contracting organisation. A positive review and final approval by the contracting agency are required.

Contracts must generally last at least two years, with exceptions such as projects lasting two years or less. Tender notices must specify the workforce needed, and contracts must include a provision requiring employment succession unless special circumstances apply. The guidelines also protect workers’ labor rights and prohibit discrimination in access to facilities such as cafeterias and commuter buses when they work at the same site as the contracting agency.

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Market labor rates also rise each year after taking into account the minimum wage and prices, so workers can receive at least the minimum wage every year.