🚨 Non-Wage Workers: New Forms of Labor in the Platform Economy Era

Today Korean Social News | 2025.05.25

📌 Minimum Wage Blind Spot: The Reality of 8.62 Million Non-Wage Workers

💬 Non-wage workers like delivery drivers cannot get minimum wage protection and suffer from low fees and unstable income. As of 2023, there are 8.62 million non-wage workers, and their average hourly wage is 6,979-8,164 won, which is less than the minimum wage. As the platform economy grows, this type of work is increasing, but worker rights protection remains in a blind spot, requiring policy attention.

Summary

• Non-wage workers are people who work in ways different from traditional salary workers.
• They include delivery drivers, substitute drivers, and freelancers, totaling 8.62 million people.
• They are in a blind spot for minimum wage and worker rights protection, needing policy improvements.

1️⃣ Definition

Non-wage workers are people who earn income through work but are not in traditional employment relationships (employer-worker). Simply put, they are people who get paid based on how much they work or work as individual business owners, rather than being formally employed by companies and receiving monthly salaries.

Legally, they are classified as 'individual business owners' rather than 'workers,' so they often cannot receive protection from labor laws like the Labor Standards Act.

💡 Why is this important?

• Non-wage workers are rapidly increasing due to the expansion of the platform economy.
• Their income instability and rights protection blind spot problems are becoming serious.
• New policies are needed to prepare for future labor market changes.
• They make up a significant portion of the economically active population, having a large socioeconomic impact.

2️⃣ Types and Characteristics of Non-Wage Workers

📕 Main Types

• Non-wage workers exist in various forms. The main types are:

  • Special form workers: This includes delivery drivers, substitute drivers, workbook teachers, and insurance planners. Their work methods are similar to regular workers, but legally they are classified as individual business owners.
  • Platform workers: These are people who work through digital platforms like delivery apps, taxi apps, and housekeeping service apps. They increased rapidly after COVID-19.
  • Freelancers: These are people like translators, designers, writers, and instructors who work on projects using their professional skills.
  • Small business owners: People who run one-person cafes, chicken restaurants, and convenience stores are also included in the broad meaning of non-wage workers.

• The number of non-wage workers continues to increase. The current situation is:

  • As of 2023, there are 8.62 million non-wage workers, making up about 30% of all workers.
  • Among them, special form workers are estimated to be about 2.2 million.
  • Platform workers number 1.74 million, greatly increasing after COVID-19.
  • By age, people in their 40s and 50s are the most common, and those over 60 also make up a significant portion.

📕 Working Conditions and Income Levels

• Working conditions for non-wage workers are very unstable. Main characteristics are:

  • Working hours: Since income comes from how much they work without set working hours, they often work long hours.
  • Work intensity: Because fees or per-job rates are low, they need to do a lot of work to earn proper income.
  • Job security: They can quit anytime, but conversely, work can disappear anytime.
  • Benefits: It's difficult to receive benefits that regular workers get, like four major insurances, severance pay, and paid leave.

• Income levels often don't reach minimum wage. Income status is:

  • Average hourly wage is 6,979-8,164 won, lower than the 2024 minimum wage (9,860 won).
  • For delivery drivers, average monthly income is around 2 million won, which is low compared to long working hours.
  • Real income decreases further when platform fees and various costs (fuel, vehicle maintenance, etc.) are excluded.
  • There's instability where income varies greatly depending on weather or economic changes.

Main Problems of Non-Wage Workers

1. Legal protection gap: Cannot receive protection from labor laws like Labor Standards Act and Minimum Wage Act
2. Social insurance blind spot: Difficult to join four major insurances, hard to get coverage during industrial accidents or unemployment
3. Excessive competition: Fees drop due to excessive competition among workers within platforms
4. Work-related accidents: Difficult to get compensation when work-related accidents like delivery accidents occur
5. Limited collective bargaining rights: Difficult to form labor unions or engage in collective bargaining, limiting rights protection

3️⃣ Platform Economy and the Spread of Non-Wage Labor

✅ Growth of Platform Economy

• The expansion of platform economy is the main cause of increasing non-wage workers. Main background factors are:

  • COVID-19 greatly increased demand for non-contact services, significantly increasing platform work like delivery and quick services.
  • Development of smartphone and app technology made it easy for individuals to participate in platforms.
  • Companies increasingly use platform workers instead of regular employees to save fixed costs.
  • People looking for side jobs or second jobs increased due to economic difficulties.

• Various platform services are emerging. Main areas are:

  • Delivery services: Food delivery through Baedal Minjok, Coupang Eats, Yogiyo, etc.
  • Transportation services: Ride-sharing and taxi services like Kakao Taxi, TADA, Uber, etc.
  • Household services: Life services like deep cleaning, babysitting, pet care, etc.
  • Professional services: Professional technical services like translation, design, marketing, etc.
  • Education services: Online tutoring, language exchange, technical education, etc.

✅ Overseas Cases and Policy Trends

• Overseas, policies to protect non-wage workers are being actively discussed. Main cases are:

  • European Union: Announced guidelines for protecting platform worker rights in 2021 and is expanding recognition of worker status.
  • United States: California's AB5 law made platform workers classified as regular workers, but controversy continues due to corporate resistance.
  • Germany: Pursuing plans to guarantee minimum wage for platform workers and mandate social insurance enrollment.
  • United Kingdom: Court ruled to recognize Uber drivers as 'workers' and guarantee minimum wage and paid leave.

• Korea is also gradually expanding protection scope. Main policy status is:

  • From 2021, industrial accident insurance began applying to some special form workers (delivery drivers, substitute drivers, etc.).
  • The Platform Worker Rights Protection Act was enacted and has been in effect since 2023, stipulating contract condition specification and prohibition of unfair contract termination.
  • Plans to expand employment insurance coverage to special form workers are being discussed.
  • Some local governments are implementing policies like providing rest spaces for delivery drivers and supporting safety equipment.

4️⃣ Related Terms

🔎 Special Form Workers

• Special form workers are workers with characteristics between regular workers and self-employed people.
• Special form workers are a special type of worker whose contract form is individual business owner but whose actual work performance is similar to regular workers. They are also called 'special employment' for short.
• Main characteristics of special form workers are: First, they mainly depend on one employer for work. Second, they often have their own equipment or facilities for work. Third, they have some autonomy in work methods and timing. Fourth, their work relationship is often continuous and exclusive.
• Representative special form workers include delivery drivers, substitute drivers, workbook teachers, insurance planners, golf caddies, and courier drivers. They began receiving industrial accident insurance coverage step by step from 2021, and employment insurance is planned to be extended to them in the future.

🔎 Platform Labor

• Platform labor is a new form of work mediated through digital platforms.
• Platform labor means work performed by receiving jobs through digital platforms like smartphone apps or websites. Platforms play a mediating role connecting workers and customers without traditional employment relationships.
• Main characteristics of platform labor are: First, jobs are assigned in real-time through apps or websites. Second, it's a performance-based payment system where you get paid for how much you work. Third, there's flexibility to start or stop work anytime. Fourth, work assignment and evaluation are done by platform algorithms.
• Platform labor is divided into two types. Online platform labor refers to work that can be done online like translation, design, and programming, while offline platform labor refers to work performed in physical locations like delivery, driving, and household services. Offline platform labor especially increased greatly after COVID-19.

🔎 Gig Economy

• Gig economy means economic activity centered on temporary or freelance work.
• Gig economy refers to economic activity centered on temporary and flexible work (gigs) instead of stable full-time jobs. The term 'gig' originally comes from musicians' one-time performances.
• Main characteristics of gig economy are: First, short-term and project-centered work forms. Second, workers can do multiple jobs simultaneously or alternately. Third, work mediation through digital platforms is common. Fourth, there's high flexibility in working hours and locations.
• Gig economy provides workers with flexibility and autonomy, but also has problems of income instability and lack of social security benefits. It's especially popular among young people and those wanting side jobs, but there can be difficulties in long-term career development and retirement preparation.

5️⃣ Frequently Asked Questions (FAQ)

Q: Can non-wage workers form labor unions?

A: Labor union formation by non-wage workers is a legally complex issue. Under current labor union law, only 'workers' can form labor unions, but non-wage workers are legally classified as 'individual business owners,' making traditional labor union formation difficult. However, based on constitutional freedom of association, they can form organizations like 'cooperatives' or 'associations' to protect their rights. Actually, organizations like the National Delivery Workers Union and Rider Union are active, demanding fee increases and working condition improvements through negotiations with platform companies. Recently, there's active discussion about legal amendments to guarantee labor rights (right to organize, collective bargaining, collective action) for special form workers, so their right to form labor unions may be legally recognized in the future. However, due to their individual business owner status, conflicts with fair trade law's 'collusion' prohibition must also be resolved.

Q: What compensation can delivery drivers get if they have accidents while working?

A: Since July 2021, delivery drivers also receive industrial accident insurance coverage and can get compensation for work-related accidents. If injured in traffic accidents or motorcycle accidents during delivery, they can receive medical expenses, sick leave benefits, disability benefits, etc. Industrial accident insurance premiums are paid 70% by platform employers and 30% by delivery drivers. However, to be recognized for industrial accidents, they must prove it's a 'work-related accident' - it must be directly related to delivery work, and accidents from drunk driving or intentional traffic violations are excluded. Also, accidents occurring while not connected to delivery apps may be difficult to recognize as work-related accidents. When accidents occur, they must immediately report to the relevant Korea Workers' Compensation and Welfare Service and submit necessary documents (accident reports, medical certificates, etc.). Not all platforms have joined industrial accident insurance yet, so it's important to check if the platform has industrial accident insurance before starting work.