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  • 60 % of public firms adopt wage peak system
    60 % of public firms adopt wage peak system
    Slightly over 60 percent of public corporations and organizations have adopted the wage peak system as the government pushes for broad social and labor reforms, the finance ministry said Tuesday.Out of the 316 public sector corporations, 191, or 60.4 percent, had reached an understanding with workers to introduce the novel wage system as of Monday, according to the ministry.Thirty-four other public organizations plan...
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60 % of public firms adopt wage peak system

Oct. 20, 2015 - 16:30 By KH디지털2

Slightly over 60 percent of public corporations and organizations have adopted the wage peak system as the government pushes for broad social and labor reforms, the finance ministry said Tuesday.

Out of the 316 public sector corporations, 191, or 60.4 percent, had reached an understanding with workers to introduce the novel wage system as of Monday, according to the ministry.

Thirty-four other public organizations plan to hold board of directors meetings within the month to approve the wage peak system, bringing the total to 225, or 71.2 percent of the total, it said.

The government-led wage peak system pushes the retirement age of workers back, giving them greater job security. The same people benefiting from this, on the other hand, must accept lower wages just before retirement, with the money saved used to hire new employees.

Boosting employment for young people has become a top priority for the Park Geun-hye administration, since youth unemployment is roughly three times higher than the national average.

The finance ministry said the average period of wages being affected was 2.6 years.

The ministry said that while many corporations have been cooperative, some large public corporations, state-supported laboratories and hospitals, have been slow to make the transition.

"Some labor unions have been demanding an extension of the retirement age past 60 and making other demands that are not acceptable to the government," said Noh Hyeong-ouk, head of the finance ministry's fiscal affairs office.

He warned that if public corporations do not comply, they will be at a disadvantage when it comes to bonuses and wage hikes.

The finance ministry has urged public sector companies to accept the wage peak system by the end of October.

Besides prodding the public sector, the government has been encouraging private companies to follow suit.

A large number of affiliates belonging to the country's biggest family-run conglomerates, such as Samsung, Hyundai Motor, SK, LG and Lotte, have already said they will adopt the system. (Yonhap)

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