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Korean Top 11 Business Groups Adopt Wage Peak System
Spread of Wage Peak System
Korean Top 11 Business Groups Adopt Wage Peak System
  • By Jung Min-hee
  • February 22, 2016, 01:00
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Workers of large businesses demonstrate against adoption of wage peak system.
Workers of large businesses demonstrate against adoption of wage peak system.

 

Out of the nation’s top 25 business groups, 11 groups, including Samsung, Hyundai Motor, LG and SK, have introduced the wage peak system in all affiliates.

According to the research data for the “introduction of domestic major groups’ wage peak system” revealed by the Federation of Korean Industries (FKI) on Feb. 21, a total of 11 groups, such as Samsung, Hyundai Motor, LG, SK, Hanjin, Doosan, Daelim, Hanjin Heavy Industries & Construction and Hankook Tire, are implementing the the wage peak system in all affiliates as of Jan. LG Group, Hanjin Group and Hanjin Heavy Industries & Construction are said to be adopting the program in some affiliates with less than 300 employees in 2017.

Hankook Tire has introduced the wage peak system that extends the retirement age from 57 to 60 from 2014, while Samchuly has extended the retirement age from 56 to 60 this year, implementing the system from Jan. 1.

GS, LS, Hyundai Development Company plan to expand the program in all affiliates by the end of the year. For GS Group, GS Caltex, GS Energy, GS Retail, GS Homeshopping, GS E&R and GS Engineering & Construction are already operating the system and the group will expand the wage peak system in all affiliates from this year. Starting with LS Cable & System in 2007, LS Group has completed the introduction of the system in 17 affiliates as of Jan. and it will expand the program in all affiliates this year and help create jobs for younger people.

The FKI conducted a survey of 49 business groups, excluding public corporations, among mutual investment limited conglomerates as of 2015, but only 25 of them responded to questions.

Chung Jo-won, head of the Environment and Labor division at the FKI, requested the cooperation of labor unions and other parties, saying, “During difficult economic times due to the economic slowdown in China, the rise in interest rates in the U.S. and low oil prices, the retirement age has been extended from this year. In order to help companies hire more new employees, it is urgent to introduce the wage peak system.”