Should delivery workers get minimum wage? Labor and management clash over platform workers

By Seo Ji-yeon, The Herald Business

A debate has erupted over whether to extend minimum wage protections to special-employment and platform workers — including delivery riders, home-tutoring instructors and home-appliance installation technicians. Labor groups say the change is needed to eliminate unpaid work and guarantee a minimum income, while business groups counter that these workers are independent contractors, not employees, and therefore cannot be covered by the minimum wage.

The Minimum Wage Commission held its fourth plenary session Tuesday at the Government Complex Sejong to discuss whether the minimum wage should apply to piece-rate workers.

Piece-rate workers are paid based on output and volume rather than hours worked. The category includes delivery riders, designated drivers and home tutors — the most common faces of special-employment and platform labor.

The issue was placed on the commission's formal agenda this year at labor's request, but the two sides showed little sign of narrowing their differences.

Business representatives said piece-rate workers fall outside the scope of the current Minimum Wage Act.

Ryu Ki-jung, executive managing director of the Korea Employers Federation, said special-employment workers "are independent contractors, like the self-employed, except in the limited cases where courts have recognized their employee status." He said it was "beyond the authority of the Minimum Wage Commission to discuss a minimum wage for people who have not been confirmed as employees."

He added that it was contradictory for such workers to "enjoy the autonomy and freedom of independent contractors while also seeking the protections that come with employee status — that is simply cherry-picking the favorable parts."

Business groups also said examples of piece-rate contract workers being brought under a minimum wage framework were difficult to find abroad.

Yang Ok-seok, head of the workforce policy division at the Korea Federation of SMEs, said the overseas cases cited by labor groups "concern remuneration structures, not wages," adding that "virtually no country treats piece-rate contracts under a minimum wage regime."

Labor groups, by contrast, argued that platform workers are burdened with unpaid time — waiting for orders, traveling between jobs and absorbing the cost of cancellations — and that the system needs reform.

Ryu Ki-seop, secretary-general of the Federation of Korean Trade Unions, said that "guaranteeing a minimum wage or fair unit price raises skill levels and strengthens workplace safety," and that "lower turnover and fewer accidents improve labor productivity."

Lee Mi-seon, vice chairwoman of the Korean Confederation of Trade Unions, said many special-employment workers "receive no compensation at all for waiting time or travel time," and that "extending minimum wage coverage is a task that can no longer be deferred."

Labor groups argue that a Ministry of Employment and Labor survey, international precedents and a special provision in the Minimum Wage Act covering piece-rate workers all support introducing such a system.

Business groups, however, questioned the objectivity of the ministry's research, saying the work had been carried out by an institute with ties to the labor movement.

Because the two sides could not agree on the basic legal status of special-employment and platform workers, Tuesday's session did not advance to any discussion of specific application methods or criteria.

The commission plans to continue the piece-rate worker debate at its fifth plenary session Thursday. Next week, it will take up in earnest the business community's push for sector-based differentiation in the minimum wage.

Labor groups are demanding a large increase in next year's minimum wage, while business groups are calling for a freeze. This year's minimum wage stands at 10,320 won (about $7) per hour, up 290 won, or 2.9 percent, from last year.