As minimum wage increases, discussion shifts to coverage expansion

This article is by Kim Yeon-joo and read by an artificial voice. As Korea's minimum wage moves through the 10,000 won ($6.70) range, the focus of debate is shifting from raising the wage to expanding its coverage. This year, whether delivery riders, courier drivers and other contract-based workers should be covered is expected to become an official agenda item for the first time in the history of the Minimum Wage Commission. Labor groups are arguing that these workers should either earn a higher minimum wage than ordinary employees receive or have a separate minimum pay system. The discussion is shaping up to be one of the year's biggest labor disputes. A report released by the Public Transport Union under the Korean Confederation of Trade Unions on Sunday laid out two approaches to a minimum wage for contract-based workers. The first would keep the current hourly framework but calculate working hours by factoring in waiting time, as is done in New York City, and then set the minimum wage at a rate higher than that of regular employees. The idea is to reflect the heavier burden these workers bear for social insurance, including industrial accident insurance and health insurance, as well as the fact that they often pay job-related costs out of pocket. The other option is to set a minimum price for each task. Drawing on Britain's system of fair contract rates, the report proposes calculating a minimum amount per job based on average hourly output and pay. "Ministry of Employment and Labor research first examined the scale and conditions of workers who may need to be newly covered, and labor and management would still have to agree on whether to even put that on the table," a representative at the Minimum Wage Commission said. "There will likely be many issues to examine, starting with who these workers are and how many there are, and extending to whether the minimum should be set as an hourly wage or as a per-task minimum payment." That means the issues pile up one after another, from deciding who should be covered to figuring out how the system should work and how the amount should be calculated. Other countries have taken very different approaches to applying minimum wage protections to delivery workers and similar workers. Australia last year became the first country in the world to confirm the introduction of a guaranteed minimum wage system for delivery workers, and plans to put it into effect in July this year. Under the deal, platform companies must guarantee 31.30 Australian dollars ($22) an hour for so-called engaged time, or the time from the moment an order is accepted until delivery is completed, beginning July 1. That is equal to Australia's national minimum wage of 24.95 Australian dollars plus a 25 percent casual loading, extra payment to compensate for missing benefits, including paid time off and personal leave. In the United States, New York City has enforced a minimum wage system for delivery riders since December 2023. It uses one of two methods: paying a per-minute rate for all time spent logged into an app, which translates to an hourly wage of $21 based on 2026 figures, or counting only the time from order acceptance to delivery completion while applying a higher per-minute rate. Spain put its so-called Rider Law into effect in August 2021, becoming the first country in the world to presume platform delivery workers are employees in principle. The approach is similar to the worker-presumption system being discussed in Korea and effectively recognizes delivery workers as employees, giving them access to protections under labor law, including the minimum wage. "A minimum price system and similar measures could be considered as alternatives for a contract-based minimum wage," said Kwon Hyuk, a professor at Korea University's Graduate School of Labor Studies. "But price and compensation levels vary by industry, making it difficult for the state to impose a uniform standard. A process that derives standar...