🚨 Equal Pay for Equal Value Work

Today Korean Social News for Beginners | 2025.09.02

0️⃣ Government Begins Legal Framework, Collects Large-Scale Wage Data for System Reform

📌 Equal Pay for Equal Value Work Legislation…Large-Scale Wage Data Collection Begins

💬 The government has started serious preparation work to make the 'equal pay for equal value work' principle into law. The Ministry of Employment and Labor has ordered research projects to improve wage data collection and survey methods, and has increased the related budget by more than double from before. They plan to make wage distribution by industry and job type into national statistics to increase wage transparency, and to change from seniority-based to job and performance-based wage systems. The government aims to complete Labor Standards Act revision within this year and start implementation from the second half of next year, which means big changes are expected in Korea's wage system.

💡 Summary

• Equal pay for equal value work means giving the same pay for work of equal value.
• The government is preparing the legal foundation through large-scale wage data collection.
• They are pushing to change from seniority-based to job and performance-based wage systems.

1️⃣ Definition

Equal pay for equal value work means the principle that work of equal value should receive the same pay regardless of gender, age, or employment type. If the nature of jobs, level of responsibility, difficulty, and work environment are similar, everyone has the right to receive the same wages.

This is a key principle for eliminating wage discrimination and creating a fair labor market. It applies not just to people doing the same job, but is a broad concept that guarantees equal wages even for different jobs if their value is equal.

💡 Why is this important?

• It's a key tool for eliminating wage gaps based on gender and employment type.
• It improves worker motivation and productivity through fair wage systems.
• It fulfills international obligations under International Labour Organization (ILO) agreements.
• It's an important policy for improving structural inequality in Korea's labor market.

2️⃣ Problems with Current Wage Systems and Need for Improvement

📕 Limitations of Seniority-Based Wage Systems

• Years of service determine wages more than performance and ability. Main problems include:

  • Most Korean companies still maintain wage systems based on years of service and education level.
  • Even when doing the same work in the same department, wage gaps are large based on when someone joined the company.
  • Age and years of service are more important criteria than individual performance or job abilities.
  • This causes growing dissatisfaction among younger generations and increases conflicts within organizations.

• Wage gaps by employment type are serious. Main situations include:

  • The wage gap between regular and non-regular workers is much larger than the OECD average.
  • Dispatched workers and regular workers doing the same job often have 30-50% wage differences.
  • Female workers' wages remain at about 68% of male workers' wages.
  • The wage gap between small and large companies continues to widen.

📕 Background for Government's System Development Push

• This is an effort to meet international standards. Main background includes:

  • Korea ratified the ILO equal pay for equal value work agreement in 1997, but actual implementation has been lacking.
  • The European Union has mandated wage transparency guidelines since 2023.
  • Korea's gender wage gap is still among the highest among OECD member countries.
  • There's a need to respond to continuous improvement demands from the international community.

• Structural changes in the labor market are needed now. Main reasons include:

  • We need to prepare for declining working-age population due to low birth rates and aging.
  • System improvements are urgent to increase economic participation of women and young people.
  • Transition to a flexible labor market centered on jobs is needed.
  • Company competitiveness and productivity need improvement through wage transparency.

💡 Main Problems with Current Wage Systems

1. Seniority-centered: Years of service as the key criterion for wage decisions
2. Employment type discrimination: Excessive wage gaps between regular and non-regular workers
3. Gender wage gap: Women's wages at 68% of men's level
4. Lack of transparency: Wage decision processes and criteria are unclear
5. Below international standards: Substantial improvement lacking even after ratifying ILO agreement

3️⃣ Government's Legal Framework Plans and Expected Effects

✅ Specific System Development Plans

• Build wage data collection and statistics systems. Main plans include:

  • The Ministry of Employment and Labor will regularly survey and publish wage distribution by industry and job type.
  • Transparently provide wage gap status by company size and region.
  • Standardize wage decision criteria and promotion systems to enable objective evaluation.
  • Introduce national-level job evaluation systems to objectively measure job value.

• Establish legal basis through Labor Standards Act revision. Main contents include:

  • Explicitly specify the equal pay for equal value work principle in law.
  • Clarify employers' wage discrimination prohibition obligations and create penalty clauses.
  • Establish workers' right to request wage information and employers' obligation to provide it.
  • Clearly state the policy support obligations of national and local governments.

✅ Expected Effects and Positive Changes

• Wage gap elimination and social integration effects are expected. Main changes include:

  • Unfair wage discrimination based on gender, employment type, and age will greatly decrease.
  • Worker morale and productivity will improve through fair wage systems.
  • Economic participation of women and young people will increase, boosting economic vitality.
  • Society-wide awareness of fairness will increase.

• Company competitiveness and labor market efficiency will improve. Main effects include:

  • Job-centered wage systems will activate placing the right people in the right places.
  • Expanded wage transparency will improve companies' human resource management levels.
  • It will help secure and retain excellent talent.
  • Creating work environments that meet international standards will be positive for attracting foreign investment.

4️⃣ Related Terms Explained

🔎 Job-Based Pay System

• Job-based pay system determines wages according to job value and difficulty.
  • Job-based pay system is a salary system that determines wages based on the value, responsibility level, and difficulty of the job someone holds, rather than the individual worker's age or years of service. It's a key wage system for realizing the equal pay for equal value work principle.
  • Main features of job-based pay systems include: First, objectively evaluating the value of each job through job analysis. Second, considering the responsibility and authority of jobs and required skill and knowledge levels. Third, allowing differential payment based on individual performance and capabilities. Fourth, increasing worker trust through transparent and fair wage decision processes.
  • Currently, job-based pay system adoption is spreading centered on the public sector, and interest is growing in private companies too. The government wants to improve seniority-based wage systems and increase labor productivity through expanding job-based pay systems.

🔎 ILO Agreement

• ILO agreements are international labor standards adopted by the International Labour Organization.
  • International Labour Organization (ILO) agreements are international norms established by the ILO to protect workers' rights worldwide and improve working conditions. The representative one is Agreement No. 100 'Equal Remuneration for Men and Women Workers for Work of Equal Value' adopted in 1951.
  • Main contents of the agreement include: First, equal pay must be given for equal value work regardless of gender. Second, governments must prepare policies and systems to realize this principle. Third, the value of work must be measured through objective job evaluation standards. Fourth, systems must be implemented in cooperation with social partners (labor and management).
  • Korea ratified this agreement in 1997, but the actual implementation level has been evaluated as insufficient. The government's current push for legislation is evaluated as a specific measure to meet international standards.

🔎 Wage Transparency

• Wage transparency means openly and transparently operating wage decision processes and criteria.
  • Wage transparency means making it so workers can clearly know what criteria companies use and what processes they go through to determine wages. It's an essential element for realizing equal pay for equal value work.
  • Main elements of wage transparency include: First, publishing wage tables or salary systems. Second, clearly presenting promotion and wage increase criteria. Third, transparency in performance evaluation methods and result reflection processes. Fourth, publishing wage ranges for workers performing the same position or job.
  • The European Union has been implementing 'wage transparency guidelines' that require companies to provide wage information to workers since 2023. Korea is also expected to greatly increase wage transparency through this legislation.

5️⃣ Frequently Asked Questions (FAQ)

Q: If equal pay for equal value work is implemented, will everyone receive the same wages?

A: No. Only when job values are the same do people receive equal wages.

• Equal pay for equal value work doesn't mean all workers receive exactly the same wages. The key point is that equal pay is given only for 'work of equal value.' First, it only applies when job nature, responsibility level, difficulty, and required skills and knowledge are similar. Second, differences based on individual performance or abilities are still recognized. Third, wage differences due to promotion or position advancement naturally exist. Fourth, if job values differ, wages can also differ.
• For example, regular and contract workers doing the same marketing work, and male and female workers should receive the same wages. But if the job values of marketing staff and sales staff differ, wages can also differ. What's important is evaluating job value according to objective and fair standards and compensating without discrimination.

Q: Won't labor cost burdens increase for companies?

A: There may be some burden short-term, but it can be beneficial long-term through productivity improvements.

• While introducing equal pay for equal value work systems may somewhat increase companies' labor cost burdens, it's expected to bring greater benefits long-term. First, fair wage systems increase worker satisfaction and loyalty, reducing turnover rates. Second, it helps attract and retain excellent talent. Third, productivity improves through worker motivation. Fourth, management costs are saved as legal disputes and labor-management conflicts decrease.
• The government is also preparing support measures along with gradual implementation considering company burdens. Wage system reform consulting support for small and medium companies and tax benefits when introducing job-based pay systems are being considered. Also, rather than immediate full implementation, the plan is to gradually expand according to industry and company size.

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