Paying Bonuses in Local Currency? Bill Proposed to Boost Regional Economies Using Corporate Funds

A bill has been submitted to the National Assembly that would allow companies to pay a portion of performance bonuses or incentives in the form of local currency, known as local love gift certificates.

This proposal appears to be aimed at linking the large-scale performance bonuses recently seen, particularly in the semiconductor industry, to the revitalization of regional economies.

Representative Park Min-kyu of the Democratic Party of Korea proposed an amendment to the Labor Standards Act today (July 8), which would allow for a portion of wages to be paid in local love gift certificates, provided that the employee consents.

Under the current Labor Standards Act, the principle is that wages must be paid directly in currency. Payment in forms other than currency is only permitted if there are special provisions in laws or collective agreements.

The proposed amendment adds a clause allowing for such payments "when there is explicit consent from the employee" and explicitly includes "local love gift certificates" as a permissible non-currency payment method.

According to the bill, companies would have a legal basis to pay a portion of wages, such as performance bonuses or incentives, in local currency if the employee agrees when signing the employment contract.

Explaining the rationale behind the bill, Representative Park stated, "With the scale of performance bonuses at large corporations increasing recently, there is a need to create a virtuous cycle that allows these funds to lead to consumption within the region." He added, "As the local love gift certificate system is designed to promote consumption at small businesses and traditional markets and increase regional spending, this initiative aims to utilize corporate performance bonuses to revitalize the local economy."

He also cited concerns raised by some local governments that a significant portion of wages earned by foreign workers is remitted overseas, limiting the economic impact on local communities, as part of the background for the bill.

Reported by Kim Minjeong | Video by Hong Jin-young | Graphics by Lee Jung-ju | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.