"Establish equal pay for equal work"... A 'painting rice cake' without the settlement of a job payment system

The government said it will enshrine the principle of “equal pay for equal work” in the Labor Standards Act this year, with enforcement expected as early as the second half of next year. Currently, the rule that “employees performing work of equal value within the same workplace must receive the same pay” exists only under the Gender Equality in Employment Act. By extending it to the Labor Standards Act, the administration aims to make it legally binding. The goal is to eliminate disparities between regular staff, temporary employees, and subcontracted workers doing the same jobs, thereby moving faster to break down the labor market’s dual structure.

South Korea’s labor market is marked by sharp polarization between large corporations and smaller firms, as well as between permanent and temporary workers, in both wages and job security. As of last August, non-regular employees earned only 54 percent of what regular workers made, and the pay gap between the two groups reached a record high for the seventh consecutive year. With disparities widening not only between regular and temporary staff but also between big and small businesses and between primary contractors and subcontractors, young job seekers say they have few promising options, while small companies struggle to hire. This dual structure, which fuels inequality and weakens productivity, can be overcome only by narrowing the gap in treatment for employees performing the same work.

Yet the concept of equal work remains vague and difficult to define objectively, prompting concerns that rigid enforcement could create serious side effects. The government has pledged to conduct a nationwide survey to collect wage data by job category, rank, and years of service, and to release the findings as official statistics to establish clearer standards. Still, critics warn that clumsy disclosure of pay information could spark not only labor-management tensions but also conflicts among workers themselves.

Ultimately, assessing equal work requires a shift to a job- and performance-based wage system. Labor Minister Kim Young-hoon acknowledged in a recent interview that “without job-based pay, it will be difficult to legislate equal pay for equal work.” The pressing challenge is to adopt a structure that sets wages according to the nature, importance, and difficulty of each role.

The challenge is that South Korea’s seniority-based wage system, in which pay rises with years of service regardless of performance, remains firmly in place. Among companies with more than 1,000 employees, 63 percent still follow this scale. Successive governments have attempted to introduce job-based pay but have been unable to overcome the fierce opposition of major labor unions, the deeply rooted seniority culture, and rigid employment practices. Unless the Korean-style system, in which dismissals are nearly impossible and age determines rank, is dismantled, resolving the labor market’s dual structure will remain out of reach.