Mid-sized Companies Express Concern Over Workplace Confusion Due to Invalid Wage Peak System Ruling

Opinions of Mid-sized Companies on the Supreme Court's Wage Peak System Ruling

[Asia Economy Reporter Kim Cheol-hyun] On the 26th, the mid-sized enterprise sector pointed out that following the Supreme Court's ruling that the wage peak system based on age is invalid, there is growing concern that confusion in workplaces that have implemented this system and the proliferation of wage lawsuits could escalate conflicts between labor and management.

The Korea Federation of Mid-sized Enterprises (KFME) issued a statement on the same day, saying, "The Supreme Court's ruling has shaken the foundation of the wage peak system, which has been in place for six years," and emphasized, "To effectively respond to the economic recession caused by the COVID-19 pandemic and the intensifying global inflation pressures, clear standards must be established so that confusion related to the wage peak system does not cause additional wage burdens and productivity declines for companies."

KFME also stated, "Beyond the short-sighted goal of balancing interests between labor and management, discussions on improving and expanding the wage peak system as an efficient measure to enhance productivity across industries?a fundamental element of sustainable development?address the declining working-age population, alleviate elderly poverty, and reduce social conflicts, as well as create youth employment, should be expedited."