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Cabinet to endorse revision to minimum wage act despite labor protests

All Headlines 08:44 June 05, 2018

SEOUL, June 5 (Yonhap) -- The Cabinet was to endorse a revision to the minimum wage act Tuesday despite strong protests from labor groups that the law offsets the effect of a rise in the legal wage threshold by including bonuses and benefits into its calculation.

Labor groups have urged President Moon Jae-in to veto the legislation that passed through the National Assembly last week. But Moon is unlikely to do so as the government has taken no preparatory steps to exercise the veto right ahead of Tuesday's Cabinet meeting.

Prime Minister Lee Nak-yon was to preside over the meeting.

The legislation calls for newly counting in some regular bonuses and welfare allowances when calculating the minimum wage. Businesses have demanded the inclusion as it cuts the effect of the minimum wage hikes.

South Korea raised the hourly minimum wage by 16.4 percent to 7,530 won in January, the biggest hike in nearly two decades and plans to increase the threshold to 10,000 won by 2020. Businesses have complained such a sharp rise would put too much financial burden on them.

After last week's passage of the bill, the country's two umbrella labor organizations -- the Federation of Korean Trade Unions and the Korean Confederation of Trade Unions -- have walked away from a government commission on the minimum wage in protest.

The commission is charged with coming up with the minimum wage levels through three-way discussions between labor, management and government. The two labor groups' decision to boycott the commission would lead to the suspension of a discussion on determining the minimum wage for next year.

Cabinet to endorse revision to minimum wage act despite labor protests - 1

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