The South Korean government will introduce a "fair allowance" for workers on employment contracts shorter than one year [1].
The policy aims to reduce the systemic disparity between regular and non-regular employees by compensating for job insecurity. It specifically targets the closure of loopholes, such as 364-day contracts, which employers have used to avoid paying mandatory severance pay [1].
Under the new guidelines, the fair allowance will be paid at a rate between 8.5% and 10% of the worker’s salary [1]. This financial addition is intended to balance the scales for those lacking the stability of permanent positions.
President Lee Jae-myung said that compensation for instability should be provided normally. He said that while regular employees receive the benefit of stability, non-regular workers should receive higher pay under the same conditions to account for their instability [1].
Lee said this approach is a matter of common sense. The administration intends to implement these measures across the national government and public sector to set a standard for labor treatment [1].
While the policy seeks to improve the immediate financial standing of temporary staff, the long-term durability of the program remains a point of discussion. The sustainability of the allowance depends on consistent government funding and the ability of the public sector to absorb the additional costs [1].
“The fair allowance will be paid at a rate between 8.5% and 10% of the worker’s salary.”
This move represents a shift toward recognizing 'job insecurity' as a quantifiable cost that requires financial compensation. By targeting the 364-day contract loophole, the Lee administration is attempting to dismantle a common corporate tactic used to minimize labor costs, potentially forcing a broader shift in how the South Korean public sector manages temporary staffing.
