THE ARISING · Markets & Strategy
South Korea Labor Minister Says Retirement Age Law Must Pass This Year
South Korea's labor minister says a law to raise the mandatory retirement age must pass this year, and that even discussing it now is late. The remark puts a deadline on a change that would reshape workforce costs for employers.
Speaking on October 13 at a National Assembly committee inspection, the Employment and Labor Minister said: "It must be processed within the year. I believe even discussing it today is late," according to Joongang Ilbo and JKN. Talks focus on raising the mandatory age from 60 to 65. The ministry said it intends to pursue a phased extension based on social consensus.
The government has not yet published its own plan. The minister said officials feared a government proposal could hinder social dialogue. He added that if only a decision remains, the government will present its proposal promptly. He noted that the ruling party has built up discussions through a task force over a long period.
People Power Party Representative Kim Wi-sang pressed the point. He asked how long the government would hide behind "social dialogue" and urged passage within the regular Assembly session. He also said an older retirement age alone is not enough. In his view, it must be linked to wage system reform. He argued companies should be able to choose between re-employment and a higher retirement age, whichever suits their sites.
The sources describe the tension plainly. Supporters want to keep older workers employed and protect their income as the working-age population shrinks from low birth rates and aging. Opposing concerns include the effect on youth jobs, labor costs for businesses and possible income gaps.
The minister also said he would push in the second half of the year to amend the law on the comprehensive wage system. That system folds overtime and night-work allowances into regular pay. Critics say it can produce "free overtime" when actual hours are not fully paid. He said long hours are often tied to low-wage structures.
On the 52-hour work week, he was cautious. Asked whether R&D staff in the Mega Special Zones could be exempt, he said many aspects need careful review. Productivity and workers' health protections must be balanced, he said. Advanced industries such as semiconductors have asked for exceptions. A social dialogue on the issue has run since September, with the government acting as facilitator.
Other items: the ministry reported an 11.8% drop in serious industrial accident deaths in the first half of this year compared with the same period last year. It plans tighter oversight of companies with repeat accidents.
For business planners, the sources support a narrow reading. A phased rise to 65 is the direction of the debate, and the minister wants it done this year. Timing, phasein schedule and any company-level flexibility remain unstated. Whether the final law pairs the change with pay reform would affect labor costs, but the sources do not say how.
Watch for the government's formal proposal and whether the Assembly votes within its regular session.
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