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Hyundai Motor Group Headquarters (Photo = Hyundai Motor Group) |
[Alpha Biz= Kim Jisun] Seoul, September 23, 2025 – Hyundai Motor Company announced that it will include allowances such as vacation pay and holiday support payments (commonly known as homecoming allowances) in ordinary wages, following its latest wage and collective bargaining agreement with the labor union. This marks the first time among Korea’s top four conglomerates that such allowances—previously considered disputable—are proactively recognized as ordinary wages.
Under the agreement, Hyundai will add five items to the scope of ordinary wages: vacation pay, holiday support allowances, research efficiency incentives, extended work bonuses, and wage system adjustment payments. The union estimates that each employee will receive an additional average of KRW 3.18 million. Applied to Hyundai’s 65,074 full-time employees (as of last year), this translates into an additional annual labor cost of KRW 206.9 billion.
Including the Supreme Court’s ruling at the end of last year, which required Hyundai to factor 150% of regular bonuses into ordinary wages beginning this year, the company’s total additional burden is expected to reach KRW 352 billion annually. Because severance pay is also tied to ordinary wages, the actual cost impact could be even greater.
Hyundai faces this rising labor cost amid an already challenging business environment, including U.S. tariff pressures. Industry observers warn that the union may demand inclusion of other ambiguous items in ordinary wages, adding further financial strain.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
