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People's Daily Online

S.Korea struggles to resolve wage issue with DPRK in economic zone

People's Daily Online

(Xinhua) 13:14, April 27, 2015

SEOUL, April 27 -- South Korea is struggling to resolve the wage hike issue with the Democratic People's Republic of Korea(DPRK) for workers employed by South Korean companies in the Kaesong industrial complex as the DPRK-proposed deadline went by last week.

Unification Ministry spokesman Lim Byeong-cheol told a press briefing Monday that the South Korean side plans to consult with the DPRK on the wage increase issue though detailed schedules had to be fixed yet.

Lim said the government will make utmost efforts to have consultations with the North side, with its focus on the written guarantee that the DPRK called on South Korean companies running factories in Kaesong to sign.

The row over the wage hike came as the DPRK unilaterally decided in February to raise minimum wage for DPRK workers in the inter-Korean factory park in Kaesong, just north of the inter- Korean land border.

South Korea raised objections, saying that the previous agreement between the two Koreas allowed employment conditions in the factory park to be adjusted only after consultations between the two sides.

Pyongyang set an April 24 deadline for an increased wage payment, saying that arrears charges will be levied on the companies that fail to pay it by the deadline.

However, the DPRK has reached compromises, allowing the companies to sign a written guarantee promising to pay the hiked portion of the wage later.

As of last Friday, 18 South Korean companies already paid the increased wages, or paid the existing level of salary and signed the guarantee for arrears charges.

It violated Seoul's instructions that any company would face administrative punitive action when complying with the DPRK's wage increase demand.

The spokesman said South Korea wants first to discuss the arrears charge with the DPRK to reduce possible losses and sense of uncertainty among South Korean companies, noting that the wage hike issue should be separately dealt with as it is a matter about overall institutional change in the Kaesong industrial complex, which should be resolve through inter-governmental talks.

The DPRK revised its labor regulations on the Kaesong factory park in November 2014 without consultations with South Korea, notifying the South of its decision in late February.

Under the revision, minimum wage for DPRK workers will be raised from 70.35 U.S. dollars to 74 dollars starting from March. The March wage was scheduled to be paid between April 10 and 20.

It was a 5.18 percent increase, surpassing the 5 percent ceiling, set by the two Koreas as a guideline for an annual wage hike. Including social security, allowances, overtime and welfare, the monthly wage would total 164.1 dollars, up 5.53 percent from the current 155.5 dollars.

The Kaesong industrial zone is the last remaining symbol of inter-Korean economic cooperation, where 125 South Korean companies are operating factories and hiring some 53,000 DPRK workers.

In 2013, the factory park was shut down for about five months as Pyongyang withdrew its workers amid rising military tensions on the Korean Peninsula.



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