Approximately half of South Korea’s self-employed businesses plan to lay off employees or cut back on hiring this year, according to a survey released Wednesday.

Incruit, an online recruiting service, conducted the survey with 240 self-employed participants, asking whether their business decisions in 2019 will be effected by the Cabinet’s decision to pass the revised Minimum Wage Act. 

The decree obliges employers to provide workers with paid leave depending on their weekly working hours.

An overwhelming 92.7 percent of respondents said the new wage system would affect their management decisions on various levels. In detail, some 17 percent said they are considering laying off employees or reducing working hours, while 12.5 percent said they would cancel new hiring plans for the year.

The overall data translates into about 47 percent of the entire self-employed population planning to “make safe bets on human resources,” Incruit said.

Those who plan to increase their own working hours were 15.5 percent, and 16.1 percent said they would hire family members.

Some 7 percent said they are actually thinking about shutting down their businesses.

The top concern among the self-employed was the increase in minimum wage, with 24.4 percent singling out the issue. This is a shift from last year’s top choice of increases in rent, which was 17 percent.

The survey is an indication that South Korean industries are likely to struggle in coming to terms with the new labor law, with various industries complaining of the “inefficiency” of the change.

By Jung Min-kyung (mkjung@heraldcorp.com)