Minister Kim Young-hoon: "We Will Prohibit the Misuse of the Inclusive Wage System to Eradicate 'Unpaid Overtime'"

On the 11th, Kim Young-hoon, Minister of Employment and Labor, stated, "For small and medium-sized businesses where the five-day workweek is still out of reach, we will prohibit the misuse of the Inclusive Wage System to eradicate 'unpaid overtime' and promote the activation of annual leave." Addressing recent controversy over night work, he added, "We will establish measures to guarantee rest periods to protect the health of night workers."
During the 2026 policy briefing held at the Sejong Convention Center, Minister Kim explained, "Requiring employers to record employees' working hours could be an effective way to address these issues."
The Inclusive Wage System is a method where, according to a prearranged employment contract, additional wages such as overtime pay are predetermined and included in the base salary. This system is mainly applied to jobs where it is difficult to quantitatively measure working hours or commuting times.
President Lee Jae Myung commented on the Inclusive Wage System, saying, "It is reportedly being abused as a tool to exploit young people who are not fully aware of their rights," and questioned, "Isn't there too much room for abuse in the system itself?"
In response, Minister Kim said, "The Inclusive Wage System is currently operated based on Supreme Court of Korea precedents. The previous administration also sought to abolish it fundamentally, but there are still practical aspects to review." He continued, "As an IT powerhouse, we believe it is feasible to mandate the recording of working hours. By making this mandatory, we can prevent misuse, and in cases where it is difficult to enforce, we will ensure that workers are not disadvantaged."
When President Lee asked, "Shouldn't the Inclusive Wage System be prohibited by law altogether?" Minister Kim replied, "It would be best to ban it."
President Lee then suggested, "Since a complete ban is unrealistic, shouldn't we specify in detail the circumstances under which the Inclusive Wage System is permitted? If legal amendments are difficult, could the Ministry issue guidelines instead?"
Plans to regulate night work were also discussed. Minister Kim explained, "It is difficult to completely ban night work, but, as in Europe, there are regulations to protect workers' health, such as guaranteeing mandatory rest periods between night shifts or limiting consecutive working days."
Additionally, Minister Kim expressed his intention to promote the Basic Workplace Act and the Presumption of Employee Status. He stated, "Even if the distinction between self-employed individuals and wage workers is ambiguous, those who are essentially subordinate workers will be protected under the Basic Workplace Act. When employee status is unclear, we are pursuing the introduction of the Presumption of Employee Status, which would require employers to prove that a worker is not an employee."
jhyuk@fnnews.com Kim Jun-hyuk Reporter