South Korea rejects industry-specific minimum wage, business groups warn of burden

A proposal to differentiate minimum wage rates by industry in South Korea was rejected by the Minimum Wage Committee, delaying the discussion until next year. The committee voted 11 to 15 against the proposal during its seventh plenary session for 2027.

Business representatives had strongly advocated for differentiated rates, arguing that certain vulnerable industries, particularly small businesses in the food service, accommodation, and convenience store sectors, are struggling to cope with the current pace of minimum wage increases amid a sluggish economy. They pointed to a significantly higher violation rate of minimum wage laws in these sectors compared to manufacturing.

However, labor unions vehemently opposed the idea, labeling it as institutionalizing discrimination between industries. Despite a compromise proposal from employers to pilot differentiated rates in select food industries, the committee, including public interest members, did not shift their stance. The committee is now tasked with determining a reasonable increase for the overall minimum wage for next year, a move that follows a 60% rise since 2018.