Ministry of Employment Announces Minimum Wage on 5th... 1.5% Increase from This Year
Monthly Salary Equivalent 1,822,480 Won... Applied Equally Across All Industries
KCTU "Objections Are a Mere Formality... Hard to Accept"
Business Community "Regret Minimum Wage Increase but Accept Position"
[Asia Economy Reporter Kim Bo-kyung] The minimum wage to be applied next year has been finalized at 8,720 won. The minimum wage for next year records the lowest increase rate ever (1.5%) due to the impact of the novel coronavirus disease (COVID-19).
The Ministry of Employment and Labor announced on the 5th that the minimum wage for 2021 has been officially notified in the government gazette as 8,720 won per hour. Applying a standard 40-hour workweek, the monthly wage equivalent is 1,822,480 won. The same minimum wage applies to all workplaces regardless of industry. This was decided by the Minimum Wage Commission on the 14th of last month and is a 1.5% (130 won) increase from this year's minimum wage (8,590 won). It is the lowest increase rate in 33 years since the introduction of the minimum wage system.
The Ministry of Employment and Labor operated a period for objections from the 20th to the 30th of last month after announcing the minimum wage proposal, but no opinions were received from labor or management organizations. Considering that in recent years there have been objections from both labor and management sides regarding the minimum wage review and decision process, this is unusual.
According to the Minimum Wage Act, if worker or employer representatives have objections to the minimum wage proposal, they may file an objection to the Minister of Employment and Labor within 10 days from the date of notification. If the Minister recognizes the objection as valid, a re-deliberation must be requested from the Minimum Wage Commission. However, in the history of the domestic minimum wage system, the Minimum Wage Commission has never re-deliberated a minimum wage proposal it has approved.
Although both labor and management sides did not file objections this year as if in unison, their reasons differed. A representative of the Korean Confederation of Trade Unions said, "Since it has never been accepted even once before, we considered the objection process itself as a 'formality'."
He added, "Before the vote on the 1.5% increase rate at the Minimum Wage Commission, the labor side walked out, and proceeding with the subsequent steps could be seen as acknowledging the 8,720 won." He continued, "We are continuously raising issues about whether the 1.5% increase rate is appropriate for maintaining the livelihood of minimum wage workers."
The management side expressed that although the minimum wage increase is still a burden amid the COVID-19 business crisis, they would accept it. A representative of the Korea Employers Federation said, "Although the burden is increasing, since the minimum wage was decided through agreement between labor and management, we did not file objections," and added, "It is an issue that labor and management must work together to overcome amid the COVID-19 crisis." A representative of the Korea Federation of Small and Medium Business Owners said, "Although there are regrets about the Minimum Wage Commission's decision, since we have already expressed acceptance, we did not raise any objections."
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