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DPRK allows delayed wage payment from S. Korea in economic zone

Xinhua, April 22, 2015 Adjust font size:

The Democratic People's Republic of Korea (DPRK) has allowed South Korean companies running factories in the inter-Korean factory park to delay their hiked wage payment until Friday.

The DPRK's General Bureau for Guidance to Central Special Economic Zone Development in charge of managing the Kaesong industrial complex verbally notified its South Korean counterpart of the delay at 11:30 a.m. local time, South Korea's Unification Ministry said Wednesday.

The original deadline was April 20 for the March wages for DPRK employees working for South Korean companies at the joint factory park in the DPRK's border town of Kaesong.

South Korea's management committee for the industrial zone formally asked Tuesday for the delay in payment of the wages unilaterally increased by the DPRK.

Unless the increased wages are paid until Friday, the DPRK is expected to put severe pressure on South Korean companies by imposing arrears charge, which amounts to 15 percent of the arrears per month.

The DPRK revised labor regulations on the Kaesong industrial complex in November 2014 without consultations with South Korea, notifying the South side of its decision in late February.

Under the revision, the minimum wage for DPRK workers in Kaesong will be raised from 70.35 U.S. dollars to 74 dollars starting from March. The March wage should be paid by April 20.

It was a 5.18 percent increase, surpassing the 5 percent ceiling that the two Koreas agreed to set as a guideline for an annual wage hike. Including social security contributions, average monthly wages for DPRK workers would total 164.1 dollars, up 5.53 percent from the current 155.5 dollars.

Seoul instructed companies in Kaesong not to pay the increased wages, warning an administrative penalty unless the companies follow the instruction.

The Kaesong industrial zone is the last remaining symbol of inter-Korean economic cooperation, where some 120 South Korean companies are operating factories and hiring 53,000 DPRK workers. Endi