Korea's new minimum wage took effect Monday, increasing to 9,860 won ($7.60) per hour, which is equivalent to about 2.1 million won a month, based on a 40-hour workweek.

The new minimum wage level increased by 240 won compared to 2023's level of 9,620 won per hour, corresponding to a daily wage of 78,880 won and a monthly wage of nearly 2.07 million won, based on the same measure.

The 2023 figure monthly wage was equivalent to about two-thirds of South Korea's average salary of 3.33 million won in 2021, according to data published by Statistics Korea.

In July last year, the Minimum Wage Commission, made up of experts and representatives from labor and business sectors, decided to raise the minimum wage by 2.5 percent from the 2023 level.

The increase represents the second-lowest rate hike seen since 1987, and is lower than the 2.6 percent consumer price growth rate for this year projected by the Bank of Korea.

The minimum wage experienced its smallest hike in 2021, with an increase of just 1.5 percent amid the COVID-19 pandemic. The minimum wage level then rose by 5.05 percent in 2022 and by 5 percent in 2023. Specifically, the minimum wage level was 8,350 won in 2019, 8,590 won in 2020, 8,720 won in 2021 and 9,160 won in 2022.

The minimum wage applies equally to all business entities that employ workers under the Minimum Wage Act. The act applies to all those employed in a workplace who are defined as "workers" under the Labor Standards Act, regardless of their employment type and nationality, and includes not only permanent workers, but also temporary, daily and part-time workers, as well as workers who are foreign nationals.