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(2nd LD) Cabinet meeting approves minimum wage amendment

All News 17:52 December 31, 2018

(ATTN: UPDATES with small business owners' filing constitutional complaint)

SEOUL, Dec. 31 (Yonhap) -- The Cabinet on Monday approved a revision of the Enforcement Decree of the Minimum Wage Act, which calls for including legally-mandated holiday hours, such as Sundays, in the calculation of minimum wage beginning in 2019.

Under the revised regulations, employers are obliged to pay workers extra wages, worth a day's work, for legal holidays, like Sundays.

Prime Minister Lee Nak-yon (L) raps a gavel during a weekly Cabinet meeting in Seoul on Dec. 31, 2018. (Yonhap)

As agreed by the Cabinet ministers a week ago, however, non-legal holidays, such as a company's foundation day, which are agreed upon between individual companies and their labor unions, will be excluded from the minimum wage calculations.

Next year's state-set minimum wage will rise 10.9 percent to 8,350 won (US$7.51) per hour from 7,530 won this year.

The most contentious issue surrounding the latest legal revision was the paid holiday hours, as employers will have to pay employees who work more than 15 hours per week additional wages for eight hours of work for Sunday.

Government officials said there won't be much change in the labor sector, as the revision of the minimum wage enforcement decree will only stipulate an administrative guideline that has been in effect over the past three decades.

But small business owners and employers' organizations argue that the stipulation of the inclusion of legal holidays in the minimum wage calculation will cause additional financial burdens on them, forcing many of them to violate the law and resort to expedient measures.

The Korea Federation of Micro Enterprise filed a formal complaint to the Constitutional Court in protest of the Cabinet approval of the minimum wage amendment.

"We express deep regret over the passage of the revision and we cannot contain our resentment," the federation said in a statement.

Prime Minister Lee Nak-yon told the Cabinet meeting that the revision of the minimum wage regulations won't put any additional financial burden on employers, as wages for legal holidays have already been enforced in the labor sector for a long period.

This undated file photo shows Vice Minister of Employment and Labor Lim Seo-jung. (Yonhap)

The Ministry of Employment and Labor also emphasized in a media briefing later in the day that the stipulation and inclusion of wages for legal holidays in the minimum wage calculations will never create any additional burden on employers.

"There are some misunderstanding over possible additional burdens. I repeat that the legal revision won't create any additional burdens for employers," Vice Minister of Employment and Labor Lim Seo-jung told reporters.

"(The wages for legal holidays) have been consistently implemented in the local industrial sites for the past 30 decades after the enforcement of the Minimum Wage Act," said Lim.

"There has been some confusion due to differences in the interpretations of the (legal holiday) rule between the Supreme Court and the labor ministry. The amendment of the minimum wage enforcement decree will eliminate all the confusions at the industrial sites," he said.

He said the government will make various efforts to lead as many small business owners as possible to pay legal holiday allowances, despite unfavorable economic conditions forecast for next year.


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