Policy Adoption

 

The Ministry of Employment & Labor announced on Sept. 2 that 212 out of the 378 subsidiaries of the 30 largest business groups in Korea have adopted a wage peak system as of the end of last month. The number of such companies increased by 35 when compared to the end of June.

Four Doosan Group subsidiaries recently decided to adopt a wage peak, and the rest of the subsidiaries are planning to follow suit next year. Likewise, Lotte Chilsung Beverage and Kirin opted to adopt the system ahead of the others in the Lotte Group.

In the LG Group, LG CNS and G2R gave a nod. Every subsidiary of the Hyundai Motor Group, SK Group, Nonghyup and many others will implement the system next year.

In the meantime, the ministry is planning to provide full support so that wage peak can be spread to smaller companies. Its assistance is expected to include tax incentives, financial assistance, sharing of case studies, on-site guidance, etc. Also, wage peak role models are selected and customized consulting services are provided in the five sectors that have higher employment effects – automobile, shipbuilding, pharmaceutical, distribution, and financial.

“Thirteen groups said recently that they would hire 89,000 people by 2017, but the feasibility of their plans cannot be ensured unless the government’s labor market reform plan, which covers the implementation of the wage peak, is finalized within this year to back them up,” Minister of Employment and Labor Lee Ki-kwon remarked, adding, “The tripartite talks will have to reach an agreement before Sept. 10, the deadline of the submission of the 2016 budget bill to the National Assembly.”

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