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A system that reduces wages starting from a certain age or years of service in exchange for guaranteeing employment for those above a certain age. Since the foreign exchange crisis, as chronic restructuring and employment instability have intensified, it has been promoted as a system that can simultaneously meet workers' demands for employment security and companies' demands for cost reduction. In particular, recently, it has been gaining attention as a countermeasure by management against labor unions' demands for employment security. On the other hand, there are many concerns raised due to the fact that the relevant workers may suffer disadvantages in severance pay, national pension, etc., due to the reduction in regular wages and average wages, and that if it is abused as a means of reducing labor costs by companies, the purpose of guaranteeing employment stability may become meaningless. The recently amended Enforcement Decree of the Employment Insurance Act introduces a plan to pay wage peak system preservation allowance to the relevant workers for workplaces that temporarily introduce the wage peak system for 3 years from 2006, actively supporting the introduction of the wage peak system.

① Employment must be guaranteed up to at least age 55.

② The wage peak system must be implemented with the consent of the worker representative, and it must be verifiable through collective bargaining agreements, employment regulations, etc., and

① Must be 54 years or older and have been continuously employed for 18 months or more by the employer of the workplace where the wage peak system is introduced.

② The wage after application must be reduced by 10% or more compared to the wage in the year immediately before the application of the wage peak system. When calculating the wage reduction, the wage increase rate must be reflected in the wage immediately before the application of the wage peak system. The wage peak system preservation allowance is paid quarterly up to a limit of 1.5 million won for half of the wage difference between the peak point and the application point, and the support period is up to 6 years. Workers who wish to receive the wage peak system preservation allowance must attach documents proving that they are subject to the wage peak system under the Enforcement Decree of the Employment Insurance Act and documents proving that their wages have been reduced by 10% or more compared to before the introduction due to the introduction of the wage peak system, and apply for the allowance payment at the Employment Stability Center in charge of the workplace location, but the employer may apply on their behalf. The wage peak system is operated as a transitional wage system before the shift to performance-based wage system, so the preservation allowance system is temporarily operated only until December 31, 2008, but for workers to whom the allowance is applied until December 31, 2008, the wage peak system preservation allowance is paid up to the maximum support period (6 years).