Review started by Korea Tripartite Commission to set 2025 minimum wage

The Korean Tripartite Commission, consisting of labor, management, and public representatives, initiated the process to set the country’s minimum wage for 2025, as reported by The Korea Times on May 21, 2024.

For 2024, the minimum wage was set at 9,860 won in South Korea, reflecting a 2.5% increase from 2023. This is the second smallest increase ever recorded. 

An increase of at least 1.42% (140 won) would elevate the minimum wage to over 10,000 won (US$7.35) in 2025.

The commission must complete its review within 90 days of receiving the request as expected by law, which this year falls around late June. However, this review process frequently extends beyond the deadline.

Outlook:

• Demands for a significant increase are expected from labor representatives on the commission, who will point to rising living costs. 
• Conversely, management is likely to call for a wage freeze to reduce cost pressures on small business owners.
• The main public interest is whether the hourly minimum wage will exceed the 10,000-won mark. 
• The question of whether to vary the minimum wage based on industry to accommodate the distinct requirements of different sectors will also be raised.

Additional Information:

• The Minimum Wage Commission consists of 27-member, with nine representatives from each sector. 
• The Commission held its first meeting of 2024 in Sejong to review the 2025 hourly minimum wage. 
• In March, the Bank of Korea suggested a lower minimum wage for the caregiving industry to address labor shortages.