[News Today] ‘Fair allowance’ to be introduced

[LEAD]

The government plans to introduce a so-called 'fair allowance' system.

It would provide additional pay to workers with shorter employment periods.

But questions remain over how it will work, and whether it could spark controversy.

[REPORT]

In 2021, when the current president, Lee Jae Myung, was serving as the governor of Gyeonggi-do Province, the provincial government introduced the so-called fair allowance for the first time in the nation.

The recipients are non-regular workers with contracts of less than one year. A one-time payment of 5–10% of the workers' base salary is provided upon their resignation.

YouTube channel of Gyeonggi-do Prov. Gov’t / (Jan. 2021)

A fair allowance of 5–10% of the base salary is paid to fixed-term workers in Gyeonggi-do’s public institutions.

Minister of Employment and Labor Kim Young-hoon has recently appeared on KBS 'Sunday Diagnosis' and announced that a fair allowance system is to be introduced.

He did not specify, but it will likely be based on Gyeonggi-do's fair allowance.

Kim Young-hoon / Minister of Employment and Labor

'Fair allowance' will provide higher compensation to unstable, short-term workers. We’ll announce the details soon.

If the fair allowance is expanded to the private sector as well, businesses may have to shoulder a greater financial burden, and changing the wage structure in the private sector would require amendments to the Labor Standards Act.

The minister also said that a conclusion on the extension of the mandatory retirement age should be reached within the first half of the year, preferably through a compromise between labor and management.

Kim Young-hoon / Minister of Employment and Labor

We’ll consider re-employment which management prefers and labor’s request for legal retirement age extension and combine both sides’ opinions to make them feasible.

Regarding the labor-management conflict at Samsung Electronics, the labor minister said a balance is needed between employee and shareholder compensation, and urged both sides to further negotiate the matter.

However, he said nothing about direct mediation or intervention by the government.