Seoul: The South Korean government has announced plans to implement a "fair allowance" scheme for temporary workers in the public sector starting next year. Aimed at workers with contracts of less than one year, this payment is designed as a form of severance compensation. This decision is part of an initiative by President Lee Jae Myung, following his directive in December 2025 to enhance the pay for nonregular workers who face job insecurity, gradually aligning it closer to that of regular employees.

According to Yonhap News Agency, relevant ministries, including the Ministry of Employment and Labor and the Ministry of Finance and Economy, established a task force late last year to evaluate conditions for nonregular public sector workers. After conducting a comprehensive survey, the task force presented their plan at a Cabinet meeting. This initiative builds on a policy first introduced in 2021, when Lee, then governor of Gyeonggi, implemented a similar allowance for temporary workers in the province.

The survey revealed that around 73,000 temporary public sector workers last year, accounting for nearly half of the total, were on contracts shorter than one year. Their average monthly salary was 2.8 million won ($1,900), which is lower than the overall average of 2.89 million won. Additionally, these temporary workers were less likely to receive benefits such as welfare points, meal allowances, and holiday bonuses compared to their regular counterparts.

While the initiative to reduce discrimination against nonregular workers and encourage the public sector to be a model employer is widely supported, several concerns have been raised. Fiscal planning remains a significant issue, as it is unclear whether the task force adequately deliberated the financial implications in their swift response to the presidential directive. In Gyeonggi, the annual budget for the allowance was 3.1 billion won for 2,300 workers. Implementing a similar scheme nationwide for over 70,000 eligible workers at a higher compensation rate would significantly increase costs.

There are also apprehensions about extending this policy to the private sector through legislative changes, which could potentially reduce nonregular employment opportunities. In France, where a similar system was introduced, the share of temporary employment increased rather than declined.

Furthermore, while the allowance may offer temporary relief, it is unlikely to address the root structural issues. Without reforming the entrenched wage systems and addressing the strong influence of regular workers' unions, significant improvements in working conditions for temporary workers remain challenging. Policymakers might need to focus on enhancing skills and employability through market-oriented approaches, expanding opportunities for stable employment as a more sustainable solution than compensation alone.