Minister Kim Young-hoon stated that the Samsung Electronics union's demand to allocate a certain percentage (N%) of operating profit as performance bonuses could now be considered illegal. He emphasized the need for flexible application of the 52nd-hour weekly work hour exemption for certain job categories, including research positions.
Kim spoke on SBS Radio's "Kim Tae-hyun's Political Show" on the 8th, saying, "I don't think it would be difficult to prioritize performance bonuses by deducting them first from operating profit." Under the Ministry of Employment and Labor's newly issued 'Implementation Guidelines for Labor Disputes Regarding Performance Bonuses,' unions that go on strike demanding N% of operating profit as performance bonuses could face legal consequences.
Kim explained, "The Samsung Electronics union has frequently demanded N% performance bonuses during negotiations. There was a concern about whether it is appropriate to deduct performance bonuses first from operating profit before covering interest payments, financial costs, taxes, and shareholder dividends."
He added, "If performance bonuses are deducted before even paying taxes, foreign observers might mistakenly believe that this country prioritizes union demands over all else. This could lead to reduced investment and weaken corporate competitiveness, which is why we aim to restrict such bonus structures."
However, Kim clarified that not all performance bonuses would be excluded from dispute targets. He noted, "Companies have historically reduced fixed wages while increasing the proportion of performance-based pay. If we now completely restrict this, it would be unacceptable to the labor sector."
When the host asked whether the recent strike by Samsung Electronics' early-career union could be considered illegal under the new guidelines even if not retroactively applied, Kim replied, "Yes. Although there was no agreement on a specific percentage of operating profit at that time, deducting performance bonuses first from operating profit would still be problematic under the spirit of the new guidelines."
Regarding the government's push for 'White Collar Exemption' through the Mega Special Zone Act — an exemption from working hour regulations for professional occupations — Kim stated, "It must be applied flexibly, but we cannot allow unlimited exemptions."
Kim pointed out, "For example, when inspiration strikes, researchers should work intensively. It wouldn't make sense to say, 'It's time to leave; let's do this much research and go home.' While I agree with the need for flexibility, allowing unlimited exemptions raises separate concerns."
He remarked, "In China, there is a practice known as 996 — working from 9 a.m. to 9 p.m., six days a week. It's true that China is rapidly catching up, but can any country surpass China through sheer quantity alone?"
Continuing, he said, "We must pursue more innovative approaches. If labor, management, and the government pool their wisdom, I believe we can find our own sustainable method that balances flexibility with protection of workers' health rights while boosting corporate productivity."
On the proposal to provide unemployment benefits for voluntary resignations among youth under 35, Kim explained, "While the form may appear voluntary, many cases are actually involuntary. The plan was designed to give young people one additional chance once. However, due to criticism of populism, it has been excluded from next year's budget."
To address youth unemployment, Kim emphasized expanding 'K-New Deal Academies,' where companies operate vocational training programs supported by the government.
Kim stated, "One major criticism of youth employment policies is that one-time cash support alone is insufficient. What young people truly want is to gain practical work experience."
He added, "The K-New Deal Academy started this year as a pilot program for 8,200 participants, offering hands-on experience in job training programs preferred by major corporations. If the government covers training costs and connects youth with companies, young people can understand real-world workplace dynamics immediately, while companies can observe and mentor them closely."
On the proposal to extend the statutory retirement age from the current 60 to 65 years, Kim expressed concern: "In an era of a 100-year lifespan, a retirement age of 60 is too low. Even Japan is moving toward a retirement age of 70. However, given that youth employment is already difficult, extending the retirement age could worsen the situation."
He continued, "If public sector jobs, large corporations, and financial institutions extend their retirement ages, young people may feel they have nowhere to turn. The President has also indicated that while this issue must be addressed jointly, extending the retirement age is necessary."
in ECONOMY
