Samsung, labor union set to sign 1st official wage deal this week

SEOUL, Aug. 8 (Yonhap) -- Samsung Electronics Co.'s management and its union were set to sign an annual wage deal this week, which includes a 9 percent pay raise for 2021-2022, following a recent endorsement of the deal by unionized workers, company and union representatives said Monday.

The world's largest memory chip and smartphone maker and its union struck a deal over the tentative agreement, which cover wages and other labor policies, including paid leave, in April. The union recently voted to approve the deal.

The signing ceremony, set to take place on the company's Giheung Campus, about 40 kilometers south of Seoul, will mark Samsung Electronics's first such event since its foundation.

The pay raise is higher than the previous 7.5 percent wage hike, the highest in a decade.

The final deal includes slightly more incentives for employees who work on the Chuseok and Lunar New Year holidays, and calls for the formation of a task force to improve its wage system, including its peak wage policy, which gradually reduces salaries for senior workers several years before retirement.

Samsung employees initially demanded the tech giant raise their annual wages by more than 15 percent. But both sides reached a compromise, given the unfriendly macroeconomic environment.

The tech giant had been widely criticized for its attempt to prevent workers from forming a labor union. The company's first labor union was created in 2018.