North and South Korea have agreed on increasing the minimum salary of Kaesong Industrial Complex workers by 5 percent from $70.35 a month to $73.87.
Wages for July will be paid according to the new agreement.
“The payment since last March will be paid by retroactive application,” staff from the South Korean Ministry of Unification said.
The controversy over wages has been ongoing since last November, as North Korea unilaterally disregarded the annual 5 percent limit on wage increases, prompting the South to insist that the North not change the wage increase without negotiating with them.
North Korea had in February, prior to negotiations with the South, demanded a 5.18 percent to $74 per month.
The regulation regarding social welfare insurance has been reformed. Originally social welfare fees were calculated based on basic wages.
According to the agreement released today, social welfare fees will be calculated according to basic wages and bonuses added together, which will increase the actual payment for each worker.
The two parties will engage in further discussions to set up regulations regarding bonuses and overtime wages, which currently vary by company.
The South and the North agreed on May 22 to maintain the minimum wage at $70.35 before a further agreement could be signed. The payment from March to June was paid accordingly.
“The social insurance fee, which takes 15 percent of the payment, will be paid based on the minimum wage ($70.35), not including overtime payments,” MoU staff told NK News on May 22, after the confirmation of the negotiations.
Negotiations over the pay increase had, until very recently, appeared to be going nowhere.
In July, North Korea accepted a suggestion of dialogue from the South, while the Ministry of Unification (MoU) stated that the “wage increase of more than 5 percent is possible.” However, that meeting, held after a gap of more than a year, did not result in any progress.
“After the rupture of the last negotiation, the South and North were continuing to negotiate this issue through the secretariat located in Kaesong,” MoU staff told NK News.
Featured Image: Workers in North Korea by Eric Lafforgue on 2009-05-17 05:50:56
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