KCCI "Comprehensive Wage System Ban Law, Backward Step... Weakening Corporate Competitiveness"

As discussions on comprehensive wage contracts intensify among the government, the National Assembly, and labor groups, the business community expressed concerns that legally banning comprehensive wage contracts could weaken corporate competitiveness.

The Korea Employers Federation and the Korea Federation of Small and Medium Business held a forum on the 17th at the Press Center in Jung-gu, Seoul, under the theme "The Usefulness and Limitations of Comprehensive Wage Contracts." A comprehensive wage system is a wage calculation method based on labor-management agreement, where overtime, night, and holiday allowances are predetermined and paid together with the monthly salary. Labor groups have raised their voices demanding the abolition of this system, arguing that it causes long working hours and "free overtime." On the other hand, the business community worries that it could lead to side effects such as labor-management conflicts arising from excessive work hour recording and management.

The presenters and panelists attending the forum also emphasized the practical necessity of the comprehensive wage system. Professor Kwon Hyuk of the Law School at Pusan National University, who was the first presenter, said, "Comprehensive wage contracts have functioned to bridge the gap between the system and reality under the rigid Labor Standards Act, thereby alleviating conflicts between labor and management."

Professor Kwon pointed out that the system is widely used in fields where it is difficult to calculate working hours or to uniformly evaluate performance based solely on time, and stressed that if work hour recording and management are legally enforced, the side effect of stricter attendance management on workers must also be considered.

The second presenter, Professor Lee Jeong-min of the Department of Economics at Seoul National University, argued that the comprehensive wage system actually plays a role in preventing unnecessary overtime and long working hours. Professor Lee said, "Under the comprehensive wage system, workers strive to complete their given tasks within regular working hours, thus removing incentives for overtime work."

Lee Dong-geun, Executive Vice Chairman of the Korea Employers Federation, is delivering opening remarks at the discussion on "The Usefulness and Limitations of Comprehensive Wage Contracts" held on the 17th at the Press Center in Jung-gu, Seoul.
[Photo by Korea Employers Federation]

Lee Dong-geun, the full-time vice chairman of the Korea Employers Federation, and Jeong Yun-mo, the full-time vice chairman of the Korea Federation of Small and Medium Business, who attended as hosts of the forum, also expressed opposition to the bill banning comprehensive wage contracts. Vice Chairman Lee said, "While work methods that improve efficiency are spreading due to changes in the industrial environment and working styles, our labor law still remains stuck in the uniform time regulation method from 70 years ago," adding, "The controversy over banning comprehensive wage contracts is a representative example of regressive thinking."

Vice Chairman Jeong also emphasized, "If comprehensive wage contracts are completely banned, issues such as a reduction in total wages, an increase in labor-management disputes, and unnecessary overtime work for some workers will arise," and added, "It is necessary to distinguish between areas where comprehensive wages are abused and areas where they are used appropriately according to business characteristics, as well as to discuss reforming the wage system."

This content was produced with the assistance of AI translation services.