Parliament Debates Employment Extension Bill: Retirement Age Extension vs. Continued Employment
As South Korea grapples with an aging population and the need for structural changes in the labor market, the National Assembly is debating legislation to ensure job security for older workers. With labor and business circles divided over extending the retirement age versus mandating continued employment, a total of 12 related bills have been proposed. Of these, nine propose extending the statutory retirement age to 65. The remaining bill stipulates that employers can choose between extending the retirement age or re-employing workers after retirement.
In May, the Economic and Social Development Commission (ESDC), under the direct control of the President, announced a plan to maintain the current statutory retirement age of 60 but mandate continued employment up to age 65 for workers who wish to continue working after retirement. The ESDC's proposal is seen as an attempt to simultaneously address the labor shortage resulting from an aging society and ensure income security for the elderly.
The business community fears that extending the statutory retirement age could burden corporate management. Instead, they suggest alternatives such as re-employment after retirement or reforming the wage system, demanding measures that can alleviate the burden on companies.
South Korea's retirement age system was first legally defined in December 1991 with the enactment of the 'Senior Citizen Employment Promotion Act'. The law stipulated 60 as the retirement age. Subsequently, in May 2013, amendments to the Senior Citizen Employment Act strengthened employers' efforts to guarantee retirement age, requiring them to set the retirement age of workers at 60 or older. The mandatory retirement age of 60 was first implemented in large companies and public institutions with 300 or more regular employees in 2016. It was then expanded to all workplaces in 2017, and most companies now operate a retirement age system of 60.
In other major countries, Japan's 'Elderly Employment Stabilization Act' stipulates that if an employer sets the retirement age below 65, they must take one of the following measures: extend the retirement age to 65, abolish the retirement age system, or introduce a continued employment system up to age 65. This is interpreted as part of the Japanese government's policy to actively respond to an aging society.
The National Assembly sought ways to establish an employment system suitable for an aging society. Reaching a consensus was crucial due to the wide gap between the positions of labor and business circles. A National Assembly official stated that they would devise the best way to ensure employment stability for older people and strengthen corporate competitiveness.
