2026 Minimum Wage Increase: What Workers and Employers Need to Know

2026 Minimum Wage Amount and Implementation Date

The 2026 minimum wage has been officially determined. The Minimum Wage Council has set the 2026 minimum wage on an hourly basis, representing an increase from the previous year. A new minimum wage is applied every January 1st, so workers will receive the increased wage starting in January.

Since the minimum wage is set on an hourly basis, conversion to monthly salary is calculated by multiplying the hourly rate by working hours. Generally, this is based on 209 hours per month (excluding days off) for a standard 40-hour work week. For example, if the minimum wage is 10,000 won per hour, the monthly base salary would be 2,090,000 won.

Salary Components Included and Excluded from Minimum Wage

It's important to clearly distinguish between salary components that are included in and excluded from the minimum wage. Many workers are confused about this.

Components included in minimum wage:

• Base salary (hourly, daily, or monthly)
• Regular wages (efficiency allowance, position allowance, length-of-service allowance, etc. paid regularly)
• Regular bonuses
• Monthly salaries for part-time workers

Components excluded from minimum wage:

• Overtime pay (night shifts, extended work allowance)
• Holiday work pay
• Holiday allowance (annual leave, monthly leave, special leave)
• Fringe benefits (meal expenses, transportation, accommodation)
• Special bonuses (holiday bonuses, performance bonuses)
• Severance pay
• Performance pay (variable pay based on individual results)

Therefore, it's incorrect for a company to claim that 'only the base salary excluding various allowances counts as minimum wage.' The base salary should be combined with regular allowances and compared against the minimum wage.

How Minimum Wage Applies by Industry and Business Size

From 2026, the same minimum wage will apply to most workplaces. However, there are a few exceptions.

Same minimum wage applies nationwide: Manufacturing, retail, restaurants, accommodations, education services, healthcare, and most other industries receive the same minimum wage.

Exceptions:

• Trainees: Can receive 90% of minimum wage during the first 3 months (full amount applies after 3 months)
• Workers with disabilities: Can receive a reduced wage up to 90% of minimum wage with mutual consent between employer and employee
• Workers aged 65 and above: No separate minimum wage standard, so general minimum wage applies
• Young workers: No special reduction provision, so general minimum wage applies

Minimum wage applies to all workplaces with one or more employees, regardless of size, including franchises and convenience stores. Family-run businesses are not exempt.

What Workers Can Do If Paid Below Minimum Wage

If your company is paying you less than the minimum wage, this is a legal violation. Workers have several options to address this.

Step 1: Request payment directly from the company First, explicitly request the minimum wage shortfall from your company. Keeping records through KakaoTalk or email serves as evidence. Politely request, 'I've confirmed from the salary statement that I'm being paid below minimum wage. Please pay the shortfall of _____ won.'

Step 2: Consult with HR or labor management department Many issues are resolved quickly when you make a polite request to the HR or labor management team. Companies typically correct the violation immediately since violations result in substantial penalties.

Step 3: Report to the Ministry of Employment and Labor If the company refuses, you can report it to your local Employment and Labor Office or call the Ministry of Employment and Labor hotline (1350). Reports can be made anonymously, and the ministry will investigate directly.

Step 4: File a complaint with labor inspectors or lawsuit If the issue isn't resolved after reporting to the ministry, you can file a lawsuit claiming the unpaid wage. While individuals must cover litigation costs, you can seek support from the Legal Aid Corporation of Korea.

Step 5: Be aware of the 3-year statute of limitations Claims for unpaid wages must be made within 3 years. It's difficult to legally claim shortfalls from more than 3 years ago.

Penalties for Employers Who Violate Minimum Wage

If a company fails to comply with the minimum wage, it faces both criminal penalties and fines under the Labor Standards Act.

Criminal penalties: Imprisonment for up to 3 years or fines up to 30 million won

Administrative fines: Upon first detection, assessed as 2 to 3 times the minimum wage shortfall (for example: if 100 employees are each shorted 1 million won per month = 100 × 1 million × 2 times or more)

This means minimum wage violations result in significant losses for companies. Most businesses carefully monitor and manage minimum wage compliance.

What Business Owners Should Do for 2026

Small business owners and self-employed workers face increased wage burdens due to the minimum wage increase. They can take advantage of the following government support programs.

Government support for small business owners: The government provides subsidies to small workplaces (typically those with 5 to fewer than 30 employees) for a portion of the minimum wage increase each year. Check the Ministry of Employment and Labor announcement for the specific support eligibility and amount.

What business owners should do:

• Check payroll systems: Reflect the minimum wage increase
• Adjust work schedules: Offset costs by improving efficiency
• Apply for government support: Verify subsidies for small workplaces
• Communicate with employees: Announce transparent salary policies

This article provides information analyzed and organized by AI based on various sources. Please verify more accurate details with relevant organizations or experts.