North’s effort to collect arrears charge is ignored

The South Korean government has said that it will not pay an arrears charge for March wages for the 54,000 North Korean workers at the Kaesong Industrial Complex, holding its stance against the unilateral demand to raise pay.

The two sides have been wrangling since February, when Pyongyang independently decided to raise the agreed upon monthly minimum wage for its workers from $70.35 to $74.

On Wednesday, Ministry of Unification spokesman Lim Byeong-cheol said during a press briefing that Seoul had no intention to pay overdue charges for South Korean companies that paid their North Korean employees the set wage of $70.35.

“The responsibility for arrears charges falls on the companies for failing to pay their workers at the proper time,” said Lim. “But in this case, we can’t view paying North Korean workers based on the minimum wage level [of $70.35] as overdue pay.”

He added that the government would not accept the North’s move to collect arrears based on the demanded $74 minimum wage.

The prospect that the North would demand the 124 South Korean firms to pay arrears arose last month after it unilaterally notified the South in February it would raise the monthly minimum wage by 5.18 percent.

South Korea has argued that the move violates the two governments’ joint operations agreement that calls for issues to be discussed and negotiated by both sides.

South Korean officials have also said the 5.18 percent increase is beyond the 5 percent ceiling the two sides agreed upon in 2013.

If companies were to pay arrears, it would add up to an extra 15 percent per its monthly payments.

Since the North’s notification, the Unification Ministry has repeatedly called on Pyongyang to come to the negotiating table to iron out their differences, going so far as to hint that it may agree to raise the minimum wage to some extent. The North, however, has refused to hold meetings and insisted upon the 5.18 percent hike.

The ministry warned that companies would be subject to administrative punishment if they raised the minimum wage without approval.

The deadline for South Korean companies to pay their workers for their March services is April 20.

BY KANG JIN-KYU [kang.jinkyu@joongang.co.kr]