South Korea Considers Minimum Wage for 8.7 Million Contract Workers

For the first time in 40 years since the Minimum Wage Act's inception and 38 years since its implementation, South Korea is seriously considering extending minimum wage coverage to contract-based workers. This move aims to establish a minimal safety net for special employment, platform, and freelance workers who currently fall into a legal gray area.

The Minimum Wage Committee recently held its fourth plenary session to discuss expanding the application of the minimum wage to contract workers. These individuals operate as independent contractors under consignment agreements, receiving payment per task rather than by the hour. Despite often being under the effective direction and supervision of employers, they lack the protections afforded to traditional employees.

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With the labor market diversifying beyond traditional full-time employment, contract workers now number approximately 8.7 million. They bear the costs of motorcycle purchases, fuel, repairs, commissions, and social insurance premiums. Furthermore, they are not compensated for preparation time, waiting periods, travel, or losses incurred due to customer cancellations. Calculations by the Korean Confederation of Trade Unions in 2025 revealed that net earnings for roles like designated drivers, delivery riders, and inspection workers fell short of the hourly minimum wage.

Labor unions have proposed specific hourly minimum wage rates for 2026, factoring in industry-specific expense ratios, social insurance contributions, and provisions for weekly holiday pay and severance. For instance, they suggest delivery riders should earn approximately 18,518 won per hour to meet minimum wage standards. While the law allows for separate minimum wage regulations for contract workers, its dormancy highlights the inadequacy of the current system for diverse labor forms. Management groups oppose the extension, arguing it would increase the burden on small businesses and that these workers are independent entrepreneurs. However, labor advocates argue that potential negative impacts can be addressed through careful policy design, and that the right to survival for millions of contract workers should not be ignored.

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Special contractors are individual business owners, and it will increase the difficulties for small business owners.