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Next Year’s Minimum Wage Set at 1만700 Won — You Can’t Tell Whether It Falls Short by Looking Only at the Hourly Rate

Next Year’s Minimum Wage Set at 1만700 Won
Next Year’s Minimum Wage Set at 1만700 Won

On 8/5, the minimum wage that will apply next year was officially announced.

1만700 won per hour. That is 380 won higher than this year.

But even if you look at your pay stub with that one number in hand, you may not get an answer. Why is that?

3-Line Summary
1. Next year’s minimum wage of 1만700 won was finalized on 8/5.
2. It is 380 won, or 3.7%, higher than this year’s 1만320 won.
3. Whether there is a shortfall is determined by monthly pay, not the hourly rate.

Let’s Start With the Numbers

Category20262027
Hourly wage1만320 won1만700 won
8 hours per day8만2,560 won8만5,600 won
209 hours per month215만6,880 won223만6,300 won

The applicable period is from 2027년 1월 1일 through 12월 31일. The same amount applies to all workplaces, regardless of industry. Even a shop with only one employee is not exempt.

According to a report by Kyunghyang Shinmun, the increase rate is 3.7%.

Where Did the Number 209 Come From?

If you work 40 hours per week, a month is roughly 174 hours. But the monthly minimum-wage equivalent is calculated using 209 hours. An additional 35 hours are included.

This is because of the weekly paid holiday.

If you work every scheduled day in a week, you receive one day’s pay even without working that day. This is commonly called weekly holiday pay. As a result, for wage-calculation purposes, a week for a worker who works 40 hours is not 40 hours but 48 hours.

A year has 52.14 weeks, so a month has about 4.345 weeks. Multiplying that by 48 hours gives 208.6, which rounds to 209 hours.

This calculation matters. For monthly salaried workers, weekly holiday pay is already included in the 209 hours. If monthly pay is at least 223만6,300 won, weekly holiday pay is not paid separately on top of that. The situation differs for hourly workers or part-time workers who work at least 15 hours per week, in which case it must be calculated separately.

8/5 Was Not a Randomly Chosen Date

The Minimum Wage Act sets the dates. The process follows the same sequence every year.

The Minister of Employment and Labor requests deliberation from the Minimum Wage Commission by 3/31. Within 90 days of receiving the request, the commission prepares a proposed minimum wage and submits it to the minister. The minister announces the proposal, and labor and management may file objections within 10 days of the announcement.

The minister must then determine and officially announce the minimum wage by 8/5. The announced amount takes effect on January 1 of the following year.

This year followed the same sequence. The proposal was announced on 7/16, objections were accepted through 27, and it was finalized on 8/5.

There Are 27 People Who Set It

The Minimum Wage Commission consists of three groups: 9 commissioners representing workers, 9 commissioners representing employers, and 9 public-interest commissioners representing neither side.

Worker commissioners are recommended by labor federations, while employer commissioners are recommended by nationwide employer organizations. After receiving the recommendations, the Minister of Employment and Labor nominates them, and the president appoints them. The chair and vice chair are selected from among the public-interest commissioners.

The numbers reveal the structure. If labor and management are split 9 to 9, the remaining 9 determine the outcome. This is why public-interest commissioners become a topic of discussion every year in minimum-wage deliberations.

Objections Were Filed, So Why Was It Finalized Unchanged?

This year, the Korean Confederation of Trade Unions and the Korea Federation of Micro Enterprise each filed objections. According to Aju Business Daily, this was the first time in 3 years that labor and management both filed objections.

The Korean Confederation of Trade Unions cited the difficulty of ensuring low-wage workers’ living expenses with the size of the increase, as well as the collapse of discussions on applying separate minimum wages to platform and subcontracted workers. The Korea Federation of Micro Enterprise requested another review, saying the increased amount could raise the burden on small business owners and reduce employment.

The Ministry of Employment and Labor accepted neither objection.

What is important to know here is that filing an objection does not automatically trigger reconsideration. The law requires the minister to request reconsideration by the commission only when the minister finds that an objection has merit. The decision rests with the minister.

Time is also a factor. Reconsideration would require reconvening the commission, but the minister must determine the amount by 8/5. Aju Business Daily reported observations that this schedule makes actual reconsideration difficult.

How to Check Whether Your Monthly Pay Falls Short

The calculation has two steps. Divide your monthly pay by 209, then compare the resulting hourly wage with 1만700 won.

A common mistake is the numerator. You should not include all of your monthly pay.

First, what is included: Base pay is naturally included. And since 2024, regularly paid monthly cash bonuses and welfare benefits such as meal and transportation allowances are included in full. Previously, only the portion exceeding a certain percentage was included, but that percentage threshold has been eliminated. If you receive a separate meal allowance of 20만 won, that 20만 won is also included in the minimum wage.

There are also items to exclude. Compensation for work beyond prescribed working hours, such as overtime, night-work, and holiday-work allowances, is not included. Welfare benefits provided in goods or facilities rather than cash are also excluded, such as meals provided at a company cafeteria or company dormitory housing.

For probationary workers, there is one additional condition. A person on probation under an employment contract of at least 1 year may legally receive only 90% for up to 3 months. However, no reduction is allowed if the contract period is less than 1 year, and no reduction is allowed for simple-labor occupations such as construction, transportation, cleaning, or sales assistance, even under a contract of at least 1 year.

An employment contract setting wages below the minimum wage is invalid to that extent, and the minimum-wage amount applies instead. Employers may face imprisonment of up to 3 years or a fine of up to 2천만 won.

It took five months for one number to be finalized, and every date in that process is written into law. When next January 1 arrives, this amount will carry more force than the employment contract.

So it may be worth opening your pay stub once at year-end. What to look at is not the hourly-wage field, but all the money you receive in a month and the hours you worked.

Sources

Wage components differ by company. For an actual determination of whether there is a shortfall or for reporting unpaid wages, please consult a nearby local office of the Ministry of Employment and Labor or a labor attorney.