South Korea’s commercial banks will implement the 52-hour workweek starting Jan. 1 ahead of the obligated July 1, according to an agreement between employers and unions of the banking sector.

The labor union and business association of finance industry in Korea said Tuesday that the two parties have agreed on complying with the legal maximum workweek of 52 hours from Jan. 1 2019. The law that cut workweek hour from 68 hours to 52 becomes binding for the banking sector from July next year.

Woori Bank, one of the country’s top commercial lenders, in August announced it would implement the new work hour from October this year.

The labor union and business association also agreed on pushing back the starting year for senior employees entering the wage peak system, under which employees getting paid less in return for extended retirement age, by one year. For example, a 55-year worker who works at a company that has implemented a wage peak system for 55-year-old or older employees will be paid fully for another year. The change will take effect next year.

The labor union had pursued two-year extension, arguing the legal retirement age currently set at 60, but two parties settled on one year.

Also on the same day, the labor union and business association agreed on establishing a social contribution fund of 200 billion won ($177.6 million). Two parties will raise 100 billion won with labor union yielding 0.6 percent off this year’s salary increase and their management coming up with the matching fund. The rest would be pulled out from other savings raised so far.

The foundation will officially be launched on October 4 and devoted to social contributions.

By Kim Tae-sung and Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]