Questions/Answers

According to the OECD, the gender pay gap in Korea in 2018 was 34.1 percent. Based on this figure, Korea has the dishonor of having the highest gender pay gap among OECD member nations, having recorded a decrease of just 7.9 percent (1998: 42.0%→2018: 34.1%) over 20 years. Seoul Metropolitan Government (SMG) reviewed the efforts of European countries to enact/amend relevant laws and determined that solving the problem would require the public sector’s willingness to make improvements and become directly involved in the implementation process. Following a recommendation by the UN Committee on the Elimination of Discrimination Against Women regarding the introduction of a pay disclosure system for public and private corporations (March 12, 2018) to eradicate discrimination against female workers, in 2019, SMG became the first local government in Korea to implement a gender-equal pay disclosure system. To expand this system across both the public and private sectors, the city required selected institutions to create plans for reducing gender pay gaps. The city laid the grounds for its policy to address the gender pay gap in three ways: 1) revising the Seoul Metropolitan Government Framework Ordinance on Gender Equality in 2019 to establish a legal basis, 2) creating a policy screening committee (comprising experts and stakeholders from diverse fields) and exclusive administrative body (Gender-Equal Labor Team), and 3) establishing the foundation for the operation of a gender-equal pay disclosure system. In 2020, selected institutions and companies were visited three times each to convince them to participate. Consultation services were also provided to encourage institutions to voluntarily create plans for improving gender pay gaps. In 2021, SMG will enact laws requiring private companies (of a certain size) to adopt the gender-equal pay disclosure system, encouraging their management and labor to work together to design plans for reducing gender pay gaps.

A gender pay gap is caused by a labor environment characterized by gender inequality. SMG’s gender pay gap improvement policy aims to create a gender-equal labor environment and promote women’s rights for all forms of employment. The city’s first goal is to implement a gender-equal pay disclosure system, which will transparently display the gender pay gap at various government-funded bodies, and have these institutions develop plans to address them based on an analysis of the causes of said gender pay gaps. Ultimately, the goal is to expand this effort to the private sector to ensure the protection of women’s rights.

By pursuing policies that pursue gender equality throughout the entire hiring process, SMG hopes to achieve gender equality in labor (decreasing the gender pay gap, etc.). These efforts are related to the fifth of the 17 SDGs (Gender Equality). In particular, SMG is providing public services that promote women’s rights by creating a gender-equal labor environment. A gender pay gap caused by sexual discrimination in the labor market not only causes financial hardship for individuals, but also forces women into the economically inactive population, which prevents them from realizing their full potential and ultimately results in society-wide economic loss. If female labor is properly valued based on the premise of gender-equal labor, this will protect women’s rights in the workplace and society overall as well as decrease social losses, thus enabling sustainable economic development and alleviating inequalities within nations. Ultimately, SMG’s policy aims to achieve not only gender equality but also two more SDGs: Goal 8 (Decent work and economic growth) and goal 10 (Reduced inequalities).

Social interest in the form of demands to decrease gender pay gaps (through Leave Work Early Demonstrations (3PM STOP), PayMeToo, etc.) is the key factor that ensures the policy’s sustainability. However, to guarantee that sustainability, a clear legal basis is necessary. It is important to note that the gender pay gap is much more than a discrepancy in wages—it is a reflection of social inequality revealed in the division of occupations by gender and excessive concentration of women in the secondary labor market. To realize true social equality, ongoing effort must be made to decrease the gender pay gap.

Despite the lack of public consensus on this issue, SMG pursued its policy on reducing the gender pay gap in three ways. Firstly, legal grounds were prepared by amending ordinances to establish a policy on improving the gender pay gap. An administrative system was established by: creating a team at SMG exclusively for overseeing gender-equal labor (Gender-Equal Labor Team), and by hiring expert personnel (discrimination inspectors) to be responsible for investigating potential cases of gender discrimination. Secondly, a committee comprising experts (from academia, women’s rights, and labor) and stakeholders was formed to assess the policy’s direction through communication with the private sector. Thirdly, given the intense opposition from both management and labor at the government-funded institutions, which were subject to SMG’s gender pay gap improvement policy, the policy’s key features (subjects of the disclosure system, content of disclosures, etc.) were decided based on extensive negotiations (10 meetings), while three consultations were provided per institution through communication efforts (government-labor-management advisory meetings, etc.). These efforts increased institutions’ willingness to cooperate with SMG’s policy and voluntarily create improvement plans. SMG will continue creating policies not only for public institutions but also other areas of society where female laborers’ rights are largely disregarded.

To encourage companies to take the initiative in efforts to address gender equality issues including the gender pay gap in public institutions and the private sector, SMG created and distributed a pamphlet entitled “Guidelines by Seoul Metropolitan Government on Gender-Equal Pay”. SMG will also develop and distribute a pamphlet showing how its policy for addressing the gender pay gap for government-funded institutions may be adapted for application by the private sector in the future.

The targets of SMG’s policy on improving the gender pay gap were, in 2019, regular employees of government-funded institutions receiving financial support from SMG. In 2020, the scope was broadened to include the irregular employees at those institutions and certain private organizations operating projects on behalf of SMG. Ultimately, the scope will be expanded to include the entire private sector. As this policy encourages institutions and companies to analyze and reflect on their own previously unrecognized internal gender pay gap issues, progress has been made on recognizing the need for improvements and proposing measures to do so. Through such processes, SMG is designing its own projects related to the gender pay gap and developing ways to apply these projects to all SMG-related institutions and, ultimately, the private sector. The distribution of “Guidelines by Seoul Metropolitan Government on Gender-Equal Pay” allowed private companies to become aware of their own gender pay gaps and diagnose the causes. Later, SMG will be supporting companies’ in their efforts to design their own improvement strategies by providing resources for gender pay gap improvement and professional consulting services.

1. Collection/analysis of gender-based salary data (annually) and introduction of biennial gender-equal pay disclosure system (scope of targets is being expanded) Each year, SMG will collect and analyze the gender-based salary data of subject institutions, with results being published biennially. In 2019, only data on regular and unlimited-contract employees of SMG-funded institutions was collected. For 2020, the scope of data has been broadened to include irregular employees at these institutions and employees at certain private organizations that operate projects on behalf of SMG. In 2021, the scope for the second release of findings will be further expanded, ultimately with the aim of including private companies. 2. Annual consulting and monitoring of gender pay gap improvement plan To facilitate SMG-funded institutions to design their own plans, the city conducted a three-phase process through its Gender-Equal Pay Advisory Panel, made up of a discrimination inspector and external experts. [Phase 1] Inspection of institutions’ basic data and causes of gender pay gap (Oct. 2019~Feb. 2020) ▸ Determine current situation and cause(s) of gender pay gap through analyses of regulations/pay data and on-site meetings with labor and management [Phase 2] Consultation on addressing gender pay gap (Mar.~Jul. 2020) ▸ Consultations offered to subject institutions to help establish improvement plans [Phase 3] Monitoring of implementation of improvement plan (Dec. 2020) ▸ Verification of implementation of finalized improvement objectives (short, mid-, long-term), and reporting on inspection outcomes Each of the 23 institutions receiving funding from SMG created its own plan for decreasing its gender pay gap (August 2020). Starting in December 2020, SMG will conduct an annual inspection on the implementation of the plans. Consultations on designing gender pay gap improvement plans will be offered to additional institutions falling under the broadened scope of gender pay data collection/analysis for 2020 (30 public private partnership institutions, etc.).

It was difficult to establish a consensus around the policy’s objectives. Both labor and management of most institutions objected to the gender-equal pay disclosure system and consulting services. They were concerned that such services would give third parties the distorted impression that they are sexually discriminatory rather than encouraging them to find out the reason(s) for their high gender pay gaps. The approach that SMG chose was communication and negotiation. After 10 meetings, the city implemented its disclosure system. Each institution was visited three times to convince them of the need for a gender pay gap improvement plan.

Although the disclosure system is part of the Korean government’s Five-year Plan (2017), the central government had been unable to implement it due to conflicts of interest. Despite resistance, SMG became the first local government to introduce this system, based on social consensus gained through communication. The city did not limit itself to implementation of the system, but also funded consultations for institutions so that efforts could be made to eliminate the gender pay gap. Based on SMG’s success with its innovative policy, other local governments and public institutions are making efforts to adopt similar systems.

The UK reduced its gender pay gap by approximately 19.8 percent over 40 years. However, it did not stop there, going on to amend its Equality Act to require all public sector parties to disclose their gender pay gaps. Several European countries, including Belgium and France, are also actively striving to reduce the gender pay gap by enacting/amending laws. Due to its dire need to improve its gender pay gap, which is the greatest among OECD nations), Korea has benchmarked leading policies from Europe. Within Korea, provincial governments continue to benchmark SMG’s policy.

No new technologies were utilized.

Various local/provincial governments have benchmarked SMG’s pioneering policy on closing the gender pay gap. After the city’s introduction of the disclosure system in 2019, marking a first in Korea, Goyang City enacted an ordinance in 2020 on the implementation of its own disclosure system. Additionally, several provincial governments including Gyeonggi-do, Gangwon-do, and Jeollanam-do are preparing their own ordinances. With this, SMG’s disclosure system is serving as a model for and being adopted by other regions. SMG is also consistently voicing the need for an environment in which this disclosure system can be operated in a stable manner through the enacting/amending of relevant laws. The National Assembly and central government (Ministry of Gender Equality and Family, Presidential Committee on Aging Society and Population Policy, etc.) are searching for ways to legalize the city’s disclosure system, with ordinance bills being submitted. SMG will continue asking the central government to legalize its disclosure system in order to allow the expansion of its model on gender-equal pay disclosure as well as disclose pay data by gender through a pay data disclosure system.

To include the private sector and ultimately everyone in Korea, clear legal measures on the establishment and implementation of a gender pay data disclosure system and improvement plan for gender pay gaps need to be in place. Relevant bills are currently in limbo but are expected to be passed in the long run. Before that, however, the interest of multiple local governments will likely result in SMG’s disclosure system and improvement plan on the gender pay gap spreading nationwide.

For the implementation of its disclosure system, SMG launched a Seoul Metropolitan Committee on the Elimination of Gender Pay Gap, comprising approximately 20 academics in the fields of women’s studies and labor, civic group representatives, labor organizations, government employees. The committee screened the targets, scope, and procedures of the disclosure system. SMG also hired a discrimination inspector to offer consultations to SMG-investing institutions to help them reduce their gender pay gap. The city’s gender-equal pay advisory panel, which is made up of six external experts (labor lawyer, attorney, etc.) also provided in person-visit consultations for each institution.

Firstly, amendments to the SMG Framework Ordinance on Gender Equality will establish the legal basis to ensure a sustainable administrative environment. Secondly, SMG’s policy was formulated with input from a committee of experts and stakeholders and enhanced by an advisory panel on gender-equal pay comprising external experts. A dedicated team was established to ensure smooth implementation. Thirdly, ten meetings were held with the labor and management of target institutions to ensure effective communication. Three advisory meetings were held for each institution on improvement plans, while a policy debate created a social consensus through dialogue among private sector experts and citizens.

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At the policy debate on the gender-equal pay disclosure model, the gender-equal pay advisory panel proposed “10 suggestions for SMG to reduce the gender pay gap.” Also, the Seoul Foundation of Women and Family’s research staff gave a presentation (Significance and Future Tasks of the Gender-Equal Pay Disclosure System), pointing out that the system’s foundation needs to be strengthened. Other academics and labor/women’s rights groups that attended the debate also gave suggestions on how the disclosure system should be assessed. SMG’s disclosure system is regarded as a model example by the National Assembly, central government, and provincial governments.

No index was available to conduct a qualitative assessment.

SMG decided to implement the advisory panel’s “10 suggestions for SMG to reduce the gender pay gap.” It will also be reflecting suggestions from the debate made by presenters and participants on strengthening the disclosure system’s implementational foundation as well as systemizing and enhancing the support given to SMG-funded organizations working toward improving their gender pay gaps. Also, based on feedback from multiple external experts that the disclosure system needs to be enacted, SMG will be continuing its efforts toward that end.

Because this policy is the first of its kind in Korea, central government players and provincial governments are very interested in it. SMG is continuing to exchange opinions with interested parties on the implementation of the disclosure policy and to establish the policies necessary for the proliferation of the gender-equal pay model. Currently, most parties agree on the need to legalize the disclosure system and make it applicable nationwide. One of the first functions of SMG’s policy was to motivate the central government to improve its efforts toward realizing gender-equal pay. More specifically, SMG is clarifying its position to local governments and central government bodies (Ministry of Gender Equality and Family, Presidential Committee on Aging Society and Population Policy, etc.) on the need to create policies on decreasing the gender pay gap in order to expand/legalize its gender-equal pay disclosure system. Such exchanges of information have also had a positive impact on enacting/amending ordinances that enable local and provincial governments to implement their own disclosure systems.

Firstly, a committee of experts from various fields (academia, women’s groups, female labor groups, etc.) and stakeholders (labor-management of SMG-funded institutions) was formed to participate in the process of establishing the policy’s direction and methodology. Secondly, the disclosure system was operated based on the designated direction (targets to disclose gender pay data, content of disclosure, etc.) after extensive communication (10 meetings) with stakeholders (labor-management of SMG-funded institutions). Thirdly, a team of SMG employees and external experts (labor lawyer, attorney, etc.) visited each institution three times to hold advisory meetings with labor and management and offer consultations on how the institution could make a plan to reduce its gender pay gap. Fourthly, the policy has become the jumping-off point for the expansion of the disclosure model (through consistent communication and exchange of information)—namely, by influencing the creation of gender pay gap improvement policies at the central government level and enacting/amending of relevant ordinances by provincial governments. Finally, feedback from experts on the expansion of the model was applied to the policy. The 10 project proposals made by the advisory panel were accepted and later reflected in the policy. Other suggestions by academics and women’s rights/labor sectors will also be applied.

Firstly, a systemic revamping is needed at governmental level. To ensure that SMG’s policy generates tangible effects, laws need to be enacted that compel private companies to operate disclosure systems and create (and actually implement) improvement plans. The city will be continuing its efforts to enact the policy through discussion with central government. Secondly, a gender-equal labor environment is necessary. Because the gender pay gap’s biggest cause is widespread sexual discrimination in hiring, various measures must be put in place to address it. Starting in October 2020, SMG’s discrimination inspector will conduct a survey on violations of laws on gender equality and labor relations, based on which corrective recommendations will be made. After 2021, more discrimination inspectors will be hired to implement various preemptive measures (enumeration survey, etc.) for SMG-affiliated institutions. Thirdly, policies are needed that help create a consensus on gender-equal labor. To successfully close the gender pay gap, an agreement is needed on the necessity for and objectives of gender pay gap improvement policies among target institutions, laborers, and the general public. The city will also devote significant effort to educational programs to improve the public’s acceptance of the policy (e.g. labor rights education focused on gender equality).