The Korea Employers Federation (KEF) on Wednesday criticized the Ministry of Employment and Labor's "Guidelines for Preventing Misuse of Inclusive Wages to Eliminate Unpaid Work," claiming it "violates the social consensus that was reached with great difficulty."
The KEF stated that through the working hour reduction roadmap committee agreement in December last year, labor, management, and government had agreed to improve the lump-sum pay system while not banning the fixed-allowance system and fixed overtime arrangements.
"The government's decision to essentially prohibit the fixed-allowance system through these guidelines violates the social consensus that was reached with great difficulty based on mutual trust," the KEF said. "The business community expresses strong regret over the government's guidelines that have nullified the hard-won tripartite agreement."
The ministry's guidelines stipulate that companies should not adopt a fixed-allowance system that calculates and pays various allowances—including overtime, night work, and holiday work allowances—as a combined lump sum without distinction.
"With the government issuing guidelines that do not align with the agreement, the business community is seriously concerned whether future social dialogue discussions can proceed normally," the KEF said.