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Seoul to give more workers job security

$6.7M to be invested for permanent contract workers’ transition
July 18,2017
The Seoul city government will spend 7.6 billion won ($6.7 million) to make its subsidiary companies’ permanent contract workers into salaried employees by early next year.

“The city government had transformed the short-term contracts of some 9,000 employees of its subsidiary companies into permanent contracts from 2012 to this year,” said Kim Yong-hwan, an official of the Labor Policy Division of the Seoul Metropolitan Government. “But many of them told the city government that working conditions of permanent contract workers are not the same as those of salaried employees.”

Permanent contract workers are contracted to work permanently at a company, but many tend to face unequal working conditions compared to salaried employees, especially in terms of wages and benefits.

According to a study by the All Public Information In-One of the Ministry of Strategy and Finance in May, permanent contract workers at public institutions earn an average of 28 million won less per year than salaried employees.

“Among some 9,000 contract workers who became permanent contract workers, including janitors, security guards and formerly subcontracted mechanics for subway repair, many have already gone to salaried positions,” Kim said. “So the plan is to shift the remaining 2,442 permanent contract workers to salaried positions by early next year.”

The city government said this is the first time a local government is shifting its permanent contract workers to salaried positions.

“The transformation will cost the city government 7.6 billion won,” he added. “Until early next year, the city will be coordinating meetings between its subsidiary companies and workers’ unions to determine the terms of employment for the 2,442, including employee benefits and salaries.”

If all goes as planned, the Seoul Metropolitan Government and its subsidiary companies will not have any employees working on permanent contracts by early next year.

The city government and its subsidiary companies have 1,087 short-term contract workers.

“We will have to hire short-term contract workers from time to time as the need arises,” Kim said. “For example, if some female employees decide to take maternity leave, we will need to hire short-term contract workers to fill their posts in the meantime.”

President Moon Jae-in said in May he will scrap the contract employment system in the public sector.

“The Seoul city government’s policy was somewhat influenced by Moon’s policy,” Kim said. “We can’t say our decision was completely irrelevant to the Moon administration’s plans.”

In announcing the plan to transform its permanent workers into salaried employees on Monday, the city government also said it will raise the hourly minimum wage in Seoul from 8,197 won to 9,000 won in 2018 and to 10,000 won by 2020.

“This will help more residents of Seoul lead fuller lives in the city,” the city government said in its press release. “Those who are subject to the hourly minimum wage in Seoul are contracted workers and subcontracted workers, as well as short-term employees at the city government -- they number some 15,000 this year.”

Currently, the hourly minimum wage outside Seoul is 6,470 won.

BY ESTHER CHUNG [chung.juhee@joongang.co.kr]