Wage Peak Spreading Fast among Major Business Groups

It has been found that 11 out of the 21 largest business groups in Korea have decided to bring in wage peak for each of their subsidiaries with retirement at 60 scheduled to become effective next year and the new wage system is currently in effect in major subsidiaries of the other 10 groups while negotiations are going on to the same end in those subsidiaries other than the major ones.

According to the Federation of Korean Industries’ recent survey on the introduction of the wage peak in the 21 business groups, Samsung, LG, Lotte, POSCO, GS, Hanjin, Doosan, Shinsegae, CJ, LS and Daelim will implement a wage peak in each of their subsidiary companies from the beginning of next year. The 10 groups in which labor-management talks are underway with regard to the introduction of the new system in 2016 are the Hyundai Motor Group, SK, Hyundai Heavy Industries, Hanwha, KT, Kumho Asiana, Dongbu, Hyundai, OCI, and Daewoo Engineering & Construction.

“Both employees and employers are encouraged to work closely together with each other for the introduction of wage peaks, so that the issue of a youth unemployment cliff resulting from the extension of the retirement age can be dealt with properly,” said Lee Chul-haeng, head of the Employment & Welfare Team of the FKI.