Jeju hotels, resorts to narrow wage gap with subcontractors in first tourism-sector cooperation model

A cooperative model between prime contractors and subcontractors — long confined to manufacturing — will for the first time extend to the tourism services industry. The government, Jeju Island and hotel and resort operators will jointly invest a total of 1.22 billion won ($897,000) to narrow the wage gap and encourage long-term employment among subcontractor workers.

The Ministry of Employment and Labor said Friday it signed an agreement in Jeju with the Jeju Special Self-Governing Province, Lotte Tour Development, Jeju Shinhwa World, Hotel Shilla and their partner companies to promote cooperative labor relations in the island's hotel and resort sector.

The Jeju hotel and resort cooperation model is the sixth region-led framework of its kind, following earlier models in South Gyeongsang Province's aerospace industry, North Chungcheong Province's food industry, Incheon's petrochemical sector, North Gyeongsang Province's auto parts industry and Gangwon Province's cement industry. It is also the first time the model has been applied to a service industry rather than manufacturing.

Hotels and resorts outsource a significant share of their operations — including housekeeping, facility management, security, parking and cleaning — to subcontractors. Short tenures and high turnover have made it persistently difficult for those firms to retain skilled workers.

The initiative focuses on tiered wage-gap support payments scaled to how long subcontractor workers have stayed in their jobs, with the aim of encouraging longer retention. The Ministry of Employment and Labor, Jeju Island and the prime contractors have pooled 700 million won in national funds, 400 million won in provincial funds and 120 million won in contributions from the prime contractors, for a total of 1.22 billion won.

Subcontractor workers will receive wage-gap support payments of 900,000 won for one to two years of service and 1.1 million won for two to five years. Those with five or more years on the job will receive a long-service grant of 1.3 million won. Workers with between six months and one year of service will receive 500,000 won in vacation pay.

The program will also support improvements to working conditions and welfare systems at subcontractor firms. Labor consulting will be provided to help revise employment rules, and subcontractors that add or expand welfare provisions in their workplace regulations will receive a system-improvement grant of 10 million won.

Prime contractors will give subcontractor workers access to their facilities and holiday gift sets. Dedicated shower rooms and sports facilities for subcontractor workers are also planned.

The Ministry of Employment and Labor and Jeju Island said they will monitor whether the agreement is being carried out on the ground and work to spread successful cooperation practices to other companies and industries.

Employment and Labor Minister Kim Young-hoon said the agreement was "the result of central and local government, prime contractors and subcontractors working together to improve the treatment and welfare of subcontractor workers who have long supported a vital part of Jeju's tourism industry." He added that the ministry would "provide support so that this first cooperation model in the tourism services sector can take root as a successful example."

Jeju Governor Oh Young-hoon said the agreement was "an opportunity to narrow the gap between prime contractors and subcontractors and to strengthen Jeju's tourism competitiveness starting with its people and workplaces." He added that he would "consistently listen to voices from the field and monitor whether the agreement leads to lasting change."