Legal News

[Taxation] Things employers should pay attention to when raising minimum wages by region

2024/01/18

Following the news of the National Wage Council’s proposal to raise the minimum wage by 6% from July 2024, which was distributed on December 21, 2023, companies will be asked to raise the minimum wage by region before the government announces the official decision. This article explains things that companies should know.

1. Impact on wage table:

If the wage table minimum salary is lower than the new regional minimum wage, the employer must adjust the wage table minimum salary to be at least equal to the new regional minimum wage.

Employers must also disclose and disseminate the revised wage table to the workplace. If the company has a labor union, it is necessary to discuss changes to the wage table with the union in advance and take their opinions into account.

2. Impact on labor-related procedures, increase in personnel costs:

If the salary under the labor contract is less than the minimum wage, the wage must be changed to be equal to or higher than the minimum wage. Along with this, social insurance premiums, health insurance premiums, unemployment insurance premiums, and labor union fees will also rise. Additionally, since the upper limit on unemployment insurance premiums is 20 times the local minimum wage, the upper limit on contributions will need to be adjusted.

Furthermore, the rate of increase in the minimum wage is often referred to by both labor and management during salary negotiations, and when the regional minimum wage increases, the labor costs of each company tend to increase as a whole.

The above has explained the main matters that employers should pay attention to and consider in advance when raising the local minimum wage. When the government officially issues a government ordinance regarding the regional minimum wage increase from July 1, 2024, we will continue to distribute it via newsletter.