Home > Opinion > Editorials

Labor minister’s proposal risks deepening contract work paradox

Published: 28 Apr. 2026, 00:00

Kim Young-hoon, minister of employment and labor, delivers opening remarks at a meeting held at the aviation safety center at Gimpo International Airport in Gangseo District, Seoul, on April 27. [NEWS1]

Labor Minister Kim Young-hoon has indicated plans to narrow the scope of fixed-term contract workers who can be employed for more than two years, reigniting debate over labor market reform. In a recent media interview on revisions to the Act on the Protection of Fixed-Term and Part-Time Employees, Kim said there are “too many exceptions” that allow employers to use fixed-term workers beyond two years and that these should be reduced.

Under current law, employers must convert fixed-term workers into permanent employees after two years. However, exceptions exist, including for ultra-short-hour workers who work fewer than 15 hours per week and for workers aged 55 or older. The Ministry of Employment and Labor is reportedly reviewing whether to revise these provisions and reduce their scope.

Discussion of reform gained momentum following a meeting on April 10 between President Lee Jae Myung and the Korean Confederation of Trade Unions. At the time, Lee pointed to what is often called the “paradox of contract worker regulation.” While the two-year conversion rule appears reasonable on paper, he noted that employers tend to end contracts at one year and 11 months to avoid the obligation, leaving workers in a cycle of instability.

The president called for a pragmatic solution to this problem. Yet the minister’s initial response has been to tighten regulations, a move critics say reflects the stance of organized labor rather than addressing the root causes. The spread of short-term contract jobs is closely tied to structural rigidity in Korea’s labor market. Companies are often reluctant to hire or convert workers to permanent status because dismissal is difficult and the cost of regular employment remains high.

Without improving labor market flexibility, businesses argue it is difficult to provide stronger protections for nonregular workers. In this context, simply reducing exceptions to the two-year rule may not lead to more stable employment and could instead reinforce incentives to keep contracts short and avoid long-term commitments.

Kim has also proposed introducing a so-called fair allowance, a form of severance-like payment for short-term contract workers. The policy was first introduced when Lee served as governor of Gyeonggi. Expanding it to public institutions nationwide would require considerable fiscal resources. If extended to the private sector, it could place additional burdens on small businesses and self-employed workers, potentially disrupting hiring decisions.

Reforming the fixed-term employment system is not an issue that can be addressed through unilateral announcements. It requires broad social dialogue and compromise among stakeholders. If reforms continue to lean toward established union interests without addressing structural constraints, market distortions could deepen and efforts to expand stable employment may become even more difficult.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.