[Sejong = E-Daily Reporter Cho Min-Jung ] As labor market polarization deepens—with the number of non-regular workers in Korea rising while the wage gap with regular workers widens year by year—discussions on “equal pay for work of equal value” are gaining momentum to reduce unreasonable disparities based on employment status or the company an employee works for.

However, a major obstacle is the strong practice of setting wages on a company-by-company basis in Korea, coupled with a weak foundation for sector-wide collective bargaining to establish common wage standards across industries.

There are growing calls to establish criteria for evaluating the value of work, taking into account the varying wage systems across companies and the complex subcontracting structure, and for labor and management to revise compensation systems through thorough discussions.

◇ Wage Gap Widens for 9 Consecutive Years… Labor Market Polarization Deepens

According to government sources on the 26th, the Ministry of Employment and Labor plans to announce a long-term roadmap by the end of the year to implement “equal pay for work of equal value.” This is one of the Lee Jae-myung administration’s national policy priorities, and discussions are underway on measures such as amending the Labor Standards Act to prohibit discriminatory treatment based on employment status, as well as expanding the provision of wage information.

Behind this lies the disparity in the labor market. As of last August, there were 8,671,000 non-regular workers, accounting for 38.5% of all wage earners. The proportion of non-regular workers rose by 0.3 percentage points compared to the previous year. The wage gap between regular and non-regular workers has been setting new record highs for nine consecutive years since 2017. As of last August, the average monthly wage gap stood at 1.94 million won, having widened by 132,000 won over the past year.

The principle of “equal pay for work of equal value” is not about making all workers’ monthly salaries the same, but rather about compensating workers according to the value of their work and reducing wage disparities without reasonable justification.

For example, if two kitchen team leaders are responsible for the same scope of work and duties, but one is denied a position allowance simply because they are a contract worker, this would constitute a disparity that needs to be addressed. The Ministry of Employment and Labor’s guidelines for preventing discrimination also cite this example, recommending that allowances be paid based on actual job titles and duties performed, rather than employment status.

However, this does not mean that salaries must necessarily be the same simply because the jobs are similar—such as between bank employees and call center contract workers, or train drivers at different railway companies.

◇ “Wage System Reform” Faces Major Obstacles… Experts: “Sufficient Labor-Management Consultation Needed”

To reduce unreasonable wage and welfare disparities between regular and non-regular employees, Japan implemented the “equal pay for equal work” system, starting with large corporations in 2020 and small and medium-sized enterprises in 2021. However, there have been persistent concerns in the field that it is difficult to determine which differences in treatment should be accepted and which should be considered discrimination.

In response, the Japanese government has applied revised guidelines and enforcement regulations starting this month to clarify the criteria for paying bonuses, severance pay, and various allowances, as well as the procedures companies must follow to explain these payments. The key principle is that payments should not be based on whether an employee is regular or non-regular, but rather on the reasons and conditions for granting the allowance.

For example, family allowances—intended to support family living expenses—must be paid to contract and part-time workers who are expected to continue working on the same basis as regular employees. Similarly, housing allowances must be provided under the same criteria as for regular employees if the worker is subject to a job transfer requiring relocation. The intent is that allowances should not be withheld or reduced solely because an employee is on a contract basis.

South Korea, too, faces the challenge of translating the principle of “equal pay for work of equal value” into tangible improvements in working conditions.

This is because even if the principle is enshrined in law, unreasonable disparities based on employment status may persist unless companies change the way they evaluate the value of work and set wages. This is why some are pointing out that this roadmap must include specific support measures for reforming job evaluation criteria and wage systems.

Park Cheol-sung, a professor in the Department of Economics and Finance at Hanyang University, said, “Since each worker’s skill level and job duties may differ, a job-based pay system must be established through voluntary agreement between labor and management after a proper evaluation.” He noted concerns that the transition to a job-based pay system, particularly for production workers, could lead to wage cuts, and emphasized the need to also examine issues that may arise during the actual reform process, such as unfavorable changes to employment rules.

There are also calls for the government’s role to extend beyond mere legislation. The government should provide information that allows labor and management to compare wage levels by job type and establish a foundation for discussing wage standards—which vary by company—at the industry and occupational level. “Inter-company bargaining,” which transcends corporate boundaries, is also being discussed as a means to build such consensus.

Lee Eun-ju, an associate researcher at the Korea Labor Institute, emphasized, “This should be treated as a national project, much like the low birth rate, and pursued as a long-term initiative so that discussions are not interrupted depending on the administration,” adding, “The state should remain a facilitator, and the priority should be to provide a platform where labor and management can reach agreements tailored to the characteristics of each industry.”