SEOUL, Aug. 17 (Korea Bizwire) — South Korea’s No. 3 conglomerate SK Group said Monday it plans to have all its affiliates adopt a new wage system by next year, in line with the government’s effort to boost the labor market.
Under the wage peak system, employees accept a reduced salary in exchange for working for an extended period of time until retirement. Around 90 percent of SK Group’s affiliates already have begun steps to adopt the new policy.
The South Korean government has been urging local conglomerates to join the system, claiming that the money saved by this wage arrangement can be used to hire new employees, leading to increased job security for both the younger and older generations.
In other efforts to revitalize the country’s slowing economy, the government granted special pardons to business leaders and other people on Friday ahead of Liberation Day, with SK Group Chairman Chey Tae-won being released from jail.
Adopting the wage peak system has also gained urgency, especially as the retirement age for local private and public companies with more than 300 employees will be extended to 60 starting in 2016 in South Korea.
Other South Korean conglomerates have also been joining the trend, with Samsung Group earlier deciding to have all its affiliates adopt the wage peak system by 2017.