83% of Large Korean Firms Still Pay by Seniority

* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.

1. 83% of Large Firms Still on Seniority Pay, Holding Back Workforce Shifts to Future Industries

Key summary: Some 83.1% of unionized companies with 300 or more employees maintain seniority-based pay, and wages for employees with 30 or more years of service reach 3.08 times those of workers with less than one year. By contrast, the share of wages reflecting job skills such as numeracy and language ability stands at only about 2% in Korea, far below Germany's 14% and Japan's 10%. Analysts say the persistence of a structure that makes it hard to adequately reward high-performing new hires is blocking efforts to secure key talent and redeploy workers to strategic industries. As pressure grows to shift toward pay systems based on job value and performance, new employees increasingly need to check before joining whether a company uses seniority-based or job-based pay.

2. One in Four Young SME Workers Says They Did Not Even Know About Income Tax Break

Key summary: In a Korea Institute of Public Finance survey of 426 young workers at small and medium-sized enterprises, 27.9% had not applied for the income tax reduction and 24.4% were unaware the program existed, for a combined 52.3%. Under the current system, young workers can receive a 90% reduction in income tax for five years from the date they are hired, capped at 2 million won a year, and the government plans to extend the reduction period to as long as 10 years for young people hired at regional small and medium-sized firms starting next year. The problem is that workers must submit an application form to their employer themselves, and no reduction follows if the company does not inform them. With 42.9% of non-applicants saying they would have applied had they been told, checking eligibility directly while employed is essential.

3. LH to Supply 20,000 Purchased Rental Units in Central Seoul Over Three Years, Strengthening Youth Housing Ladder

Key summary: LH will supply 20,528 purchased rental units in central Seoul over the next three years, allocating 14,558 of them as youth rental housing. Rent for first-priority youth applicants is about 40% of market rates with residency of up to 10 years, extendable to as long as 20 years upon marriage. Last year, applications for youth purchased rental units in Seoul drew an average of 130 applicants per unit, far above the national average of 50 to 1, showing how concentrated demand has become. At a roundtable, some argued that supply focused on vulnerable groups alone cannot meet demand from the broader young population, including those starting their careers.

4. Youth Employment Policy Age Ceiling Raised From 29 to 34

Key summary: The Ministry of Employment and Labor has revised the enforcement decree of the Special Act on the Promotion of Youth Employment to widen the definition of youth from ages 15 to 29 to ages 15 to 34, effective on the 18th of this month. People aged 30 to 34 will accordingly be included as core recipients of youth employment programs such as vocational training, job placement and work experience support. Many programs had already applied the age-34 threshold — the social value-oriented youth work experience program, for instance, provides 1.7 million won a month in participation support to unemployed young people aged 15 to 34 — and the revision clarifies the legal basis. With policy benefits now extending to people in their early 30s whose job searches have stretched out, those in that age range should actively review programs they can apply for, observers say.

5. Jinhak Apply's Catch Tops 800,000 Active Resumes

Key summary: Active resumes on the recruitment platform Catch, run by Jinhak Apply, rose 19% over the past year to top 800,000, setting a new high each year after 500,000 in 2024 and 700,000 in 2025. By experience level, "M-level" candidates with three to seven years of experience, a group with active interest in changing jobs, accounted for about 49% of all members with work experience, while management and administrative roles drew the most interest at 171,000 people. Graduates of universities in Seoul and the surrounding metropolitan area made up 41%, but more than 50,000 came from regional flagship national universities, pointing to a widening talent pool. With competition in the job market intensifying, keeping resumes current and managing visibility on platforms works in favor of hiring prospects, observers say.

6. "Once Raised, It Never Comes Down": Labor and Management Repeat Standoffs With No Concessions

Key summary: Analysts say wage negotiations are growing more rigid as seniority-based pay systems combine with a bargaining structure centered on company-level unions. According to the Ministry of Employment and Labor, workplaces with 1,000 or more employees accounted for 41.5% of all labor disputes last year, up 11.2 percentage points from 30.3% in 2021, while strike participation rates jumped to 92.9% in 2023 from 52.5% in 2017. Revised labor union legislation that took effect in March this year also allows restructuring to become a subject of industrial action, adding to the burden on management. As disputes at large workplaces increasingly spread to subcontractors and suppliers, new employees need to look into the state of labor relations at companies they hope to join, observers say.