South Korea’s labor market is now engaged in an intense battle over the definition of fairness. The spark was a recent court ruling that found unlawful a private organization’s personnel regulation that had reflected military service experience in promotions, holding that the practice constituted indirect discrimination based on sex. Compensation for men who have completed compulsory military service is both a natural duty of the state and a moral value. However, the court’s judgment was that when such compensation is transformed into a means of preempting future opportunities within an organization, it becomes a glass ceiling that other groups cannot overcome.

Yet this raises one enormous question. If our society applies strict standards to compensation for men’s sacrifice by defining it as discrimination, why does it grant immunity to another sex-based policy, the women’s quota system, under the name of “affirmative action”? It is now time to take a deeper look at the entirety of our labor policy and ask whether the values of fairness and equality are being applied selectively depending on the interests of a particular sex.

1. After the Abolition of the Military Service Bonus Point System: A Shift Toward Post-Employment Compensation and Its Limits

The Constitutional Court’s 1999 decision declaring the military service bonus point system unconstitutional marked a major turning point in South Korea’s policy on compensating military service. The system of granting additional points to those who had completed military service at the hiring stage was abolished on the grounds that it undermined the equality of opportunity pursued by the Constitution. Since then, Korean society has shifted away from giving bonus points during recruitment and toward a post-employment compensation model, under which salary grades and wages are adjusted to reflect the period of military service after a person enters employment.

In 2023, through an amendment to the Act on Support for Discharged Soldiers, the government made it mandatory for state agencies and public institutions to include the period of compulsory military service of discharged soldiers as work experience when determining salary grades and wages. This was an expression of the state’s commitment to financially compensate for the roughly two-year career gap experienced by those who fulfilled military service obligations. Up to this point, social consensus is possible.

The problem arises, however, when this compensation goes beyond wage levels and begins to determine the speed at which an employee climbs the ladder of status known as promotion. The court viewed this as going beyond legitimate compensation for those who fulfilled military service and instead functioning as structural exclusion against those who did not.

2. The Trap of Linking Military Service to Promotion: The Public Sector Avoids It, While the Private Sector Is Caught in It

In the public sector, the salary grade system and the promotion system are relatively clearly separated. Salary grade is merely a standard for calculating wages, while promotion is determined by the minimum required period for promotion and by a performance evaluation system. In other words, even if military service experience is reflected in salary grade and monthly pay increases as a result, this does not automatically move an employee ahead in the order of promotion.

However, private companies and some incorporated associations have used the simple equation of years of service salary grade promotion period for administrative convenience. Under the pretext of labor-management agreements, the practice of adding military service experience directly to the period required for promotion became entrenched. As a result, male employees are granted eligibility for promotion two years earlier than female employees from the moment they enter the organization. This goes beyond the dimension of wage compensation and imposes on women a structural opportunity gap that they cannot catch up with.

What the court put a brake on in this case is the fact that such practices within private companies have become tools of indirect discrimination prohibited by the Constitution. Companies are now faced with the task of completely separating salary grade from promotion and reforming their personnel systems toward performance-based management.

3. The Women’s Quota System: A Distorted and Compulsory Policy Unique to Korea and Its Reality

Then what about Korea’s women’s quota system? What is commonly referred to in Korea as the women’s quota system is the “Affirmative Action” system based on Article 17 of the Act on Equal Employment Opportunity and Work-Family Balance Assistance. Although the number 30 percent is not explicitly stated in the law, the Ministry of Employment and Labor designates companies whose female employment ratio falls below 70 percent of the average female employment ratio for their industry as underperforming workplaces. This 70 percent standard effectively functions as a social guideline of 30 percent.

What is surprising is that among OECD countries, there are virtually no countries that forcibly allocate a specific sex ratio from the hiring stage in private companies. European cases are mainly at the level of recommending the proportion of women on boards, and governments do not excessively intervene in private-sector hiring. Japan, too, uses a transparency strategy under the Act on the Promotion of Women’s Active Engagement in Professional Life, requiring companies to disclose employment data, rather than forcing quotas.

By contrast, Korea pressures private companies through strong penalties such as public disclosure of company names, point deductions in public procurement bids, and ESG evaluations. For companies, restrictions related to public bidding are directly connected to their survival, creating a structure in which they are effectively forced to comply. This is excessive administrative intervention that infringes on corporate management rights and the autonomous right to select talent, and it also runs counter to the principles of a market economy.

4. The Paradox of Quotas: A Painkiller That Actually Hinders Work-Family Balance

Quotas do not function as a ladder that helps work-family balance. Rather, they act as a painkiller that obstructs such balance. From the perspective of corporate management, employees hired under quota systems are classified as replaceable workers. This is because, for companies, it is a more economical choice to pressure such employees into voluntary resignation than to pay the costs of supporting childcare leave or flexible work arrangements.

As long as companies meet the quota figures, they can avoid government sanctions, so they do not care whether the female employees in question continue their careers. Although the systems exist, the corporate strategy becomes one of creating an atmosphere in which using those systems marks an employee as someone who does not fit into the organization. Ultimately, quota systems fundamentally weaken companies’ willingness to invest in institutional improvements for work-family balance. A vicious cycle becomes entrenched: capable women are pushed to prefer jobs from which it is easier to resign rather than jobs in which they can build expertise, while companies stop investing in them on the assumption that they will leave anyway. As a result, quotas paradoxically come to obstruct the very work-family balance that is essential to raising the birth rate.

5. The Results of Quotas: Career Interruptions, the Rise of Non-Marriage, and the Gender Wage Gap

Why are companies that hire women under quota systems so reluctant to retain them? From a company’s point of view, quotas are a kind of ceremonial cost required to pass government regulation, while support measures such as childcare leave and flexible work are regarded as permanent risks. In Korea’s rigid labor culture, where long working hours and performance-based pressure are seen as signs of diligence, women who combine work with childcare are classified, from the company’s perspective, as workers with lower productivity.

In such an environment, some women sense that marriage and childbirth will destroy their careers and choose non-marriage as a rational survival strategy. Meanwhile, women who do choose marriage are pushed to the edge of career interruption because of insufficient institutional support. In the end, quotas merely raise the numerical figure for female hiring, while in reality producing more women whose careers are interrupted.

This directly leads to the gender wage gap. When the media report that Korea has the highest gender wage gap in the OECD, most women, without fully understanding these structural issues, simply think, “Women are still discriminated against this much in society,” and feel rising anger. We must face the fact that the gender wage gap in Korea is not primarily the result of discrimination within the same company and the same job, but is largely a statistical outcome arising from career interruptions, movement into low-wage jobs, and lack of seniority.

Already, Korean women in their 20s and 30s have higher educational attainment than men, and women who do not perform compulsory military service spend nearly two years preparing for employment. In this environment, men become angry about the women’s quota system, while women become frustrated by career interruptions, creating a zero-sum game in which everyone is unhappy.

6. A Fundamental Solution: Making Childcare a Male Obligation and Shifting Toward an Employment-Retention System

The future labor environment will be even harsher than it is now. Advances in AI and IT are rapidly reducing the number of jobs themselves. Companies will now seek to select workers based on actual productivity rather than on regulations such as sex-based quotas. In an era when jobs are becoming scarce, government-imposed quotas will only become a poison that intensifies the fierce struggle for survival between men and women.

The policy paradigm must now be fundamentally changed. Hiring policies centered on quotas have already reached their limits. As in foreign cases, companies should be required to transparently disclose their hiring status and wage gaps, and we should trust the market’s capacity for self-correction. If it is difficult to abolish the women’s quota system immediately, it should be operated with limits on its scope and duration, and with mechanisms that allow for its gradual reduction.

The only way to prevent companies from avoiding the hiring of women is to eliminate differences in risk based on sex. Childbirth leave, childcare leave, and reduced working hours must now be shifted from “women-only” systems to “joint parental obligations.” The government should legislate mandatory use of childcare leave by men and improve the contact systems of daycare centers and schools, which currently call only mothers when a child is sick, so that both parents are jointly responsible for being contacted. Only when all male and female workers bear the same level of childcare risk will companies lose any reason to discriminate based on sex in their personnel decisions.

In addition, the government must stop relying on easy regulations that constrain companies and instead focus on infrastructure investment, such as building a social supply network for substitute workers and dramatically increasing childcare leave benefits. Rather than forcing hiring numbers, the government should make post-childbirth return-to-work rates and retention rates the top indicators in corporate evaluation. Only then will companies begin to make real investments in talent retention, rather than pressuring employees to leave.

It is now essential to move beyond the outdated numbers game of quotas and build an employment-retention ecosystem in which women who are hired can grow without career interruption. This is true gender equality that both men and women can accept, and it is the only path toward a fair labor market. We must no longer rely on stopgap measures that meet numerical targets at the expense of women’s careers. Designing a personnel system that respects performance and capability is the most urgent reform now needed in South Korea’s labor market.

This article may differ from the views of the Hansun Foundation

(※ It's a translation based on machine translation)