Samsung Electronics' largest union urges withdrawal of local voucher wage bill

Samsung Electronics Labor Union leader Choi Seung-ho, right, Yeo Myung-koo, head of the People Team at Samsung Electronics' Device Solutions (DS) Division, left, and Labor Minister Kim Young-hoon pose after the union and management signed a tentative wage and collective bargaining agreement at the Gyeonggi Regional Employment and Labor Office in Suwon, Gyeonggi Province, May 20. Joint Press Corps

Samsung Electronics' largest labor union on Friday called for the withdrawal of a proposed revision to the Labor Standards Act that would allow employers to pay part of workers' wages with local gift certificates, arguing that the bill undermines the principle that wages should be paid in legal currency.

According to a wage agreement reached in May, employees in Samsung Electronics' Device Solutions (DS) Division could receive performance-based incentives of up to 600 million won ($397,000) each if earnings meet expectations, while employees in the Device eXperience (DX) Division, the company's consumer electronics business, are expected to receive company shares worth about 6 million won.

The Samsung Electronics Labor Union (SELU) criticized proposed legislation, introduced Wednesday by Rep. Park Min-kyu of the ruling Democratic Party of Korea, which would amend the Labor Standards Act to allow employers to pay part of workers' wages, including performance bonuses, in local gift certificates or other non-cash forms with employees' explicit consent or under a collective bargaining agreement.

“The proposed amendment is a dangerous attempt to undermine the very foundation of the wage payment system,” SELU said. “It should be withdrawn immediately.”

The proposal has also drawn opposition from the nation's two largest labor umbrella groups. The Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU) have both called for the bill to be withdrawn.

SELU also criticized lawmakers backing the proposal, saying that if they truly believe local gift certificates are equivalent to cash, they should accept their own salaries and allowances in vouchers instead of using workers' wages as "an experimental test."

The union's opposition comes as the semiconductor industry is already voicing concerns over government discussions of possible excess profits recovery policies, warning that additional regulatory measures could undermine corporate competitiveness.

Employees at Samsung Electronics and SK hynix have joined a National Assembly public petition urging the government to halt discussions on recovering semiconductor excess profits and withdraw policies they say could undermine the industry's competitiveness.

According to securities analysts, Samsung Electronics' Device Solutions (DS) Division and SK hynix are expected to post operating profits of about 40 trillion won ($29 billion) and 30 trillion won, respectively, this year. As a result, industry officials expect semiconductor employees to receive performance bonuses worth an average of several hundred million won when they are paid early next year.