Korea's minimum wage is set to increase by 16 percent next year to over seven,five-hundred won, or six-dollars-70 cents an hour, marking the biggest annual jump in almost two decades.
To help support small businesses cope with the increase in labor costs, Finance Minister Kim Dong-yeon unveiled the government's support plan on Thursday.
"Income inequality has grown rapidly recently, and it's holding back domestic consumption and growth. The minimum wage hike can foster income-led growth, and we've laid out a support fund worth three trillion Korean won to help small businesses."
The government plans to directly fund small businesses where around 80 percent of workers get paid less than the minimum wage.
Small businesses employing fewer than 30 people will get around 117 dollars per worker a month in government support.
It will be limited to workers earning less than 1,700 dollars a month, which would be less than 120 percent of minimum wage monthly income or 1,400 dollars.
Small businesses earning more than 550-thousand dollars a year in taxable income will not be eligible for the subsidies.
"For businesses that hire apartment security guards or cleaners, where layoffs are a concern due to the minimum wage hike, we will still provide them with funds, even if they employ more than 30 people."
To get the subsidy, businesses will need to meet two criteria: pay their workers the minimum wage and also apply for employment insurance.
The subsidy plan is set for 2018 only, and still needs to be approved by the budget committee at the National Assembly.
Kim Hyesung, Arirang News.