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YONGSAN GARRISON, South Korea — South Korean employees on U.S. bases will get an average 2.5 percent increase in annual pay and benefits beginning July 1, according to an agreement between the Korean Employees Union and U.S. Forces Korea.

Officials signed a memorandum of understanding Thursday that addresses hourly pay rates, allowances and tuition assistance payments.

Kim Yong-tae, U.S. Forces Korea and 8th U.S. Army labor adviser from the civilian personnel directorate, said the memorandum is unrelated to recent labor negotiations between the union and the command, but rather was the conclusion of annual negotiations on “pay and benefit adjustments” as requested by the union.

The pay adjustments affect Korean General Schedule and Korean Wage Board employees.

Kim said schedule employees hold “white-collar” jobs in administrative and clerical positions while board employees work “blue-collar” manual labor jobs.

Kim explained that the payment-in-kind allowance, consolidated allowance payment and benefit allowance are provided to South Koreans who work for the U.S. military because their peers who work in the private sector receive similar compensation.

“It is … true that we do not provide many allowances when compared to employees in [the] private sector,” Kim said.

While a South Korean company might provide employees things like transportation, uniforms or meals — and in some cases housing — USFK instead provides the payment-in-kind and consolidated allowances to help offset such costs.

The hourly payment-in-kind allowance decreased from 898 won (about 87 cents) per hour to 882 won (about 85 cents) per hour while the consolidated allowance payment was increased from 11.76 percent to 12.01 percent of the hourly wage.

The benefit allowance represents things like annual leave, sick leave and family event leave, some of which USFK provides but not to the extent South Korean companies do, Kim said.

It remained at 5.1 percent of the hourly wage.

Employees also received an increase in tuition payments, which can be used to pay for children’s junior high school, high school and college education.

Effective with the 2006 school year, the maximum amount of tuition assistance climbed from 5,320,000 won (about $5,158) to 5,590,000 won (about $5,419) per year.

The agreement also states that if the South Korean government gives its employees a pay increase before Dec. 31, “USFK agrees to submit a supplemental wage increase” if the Korean government’s increase is greater than the 2.5 percent USFK and the union agreed upon Thursday.

Union president Kang In-shik said Friday he’s more concerned with job security for all of his employees than with the annual compensation agreement.

The union filed a grievance with the South Korean Labor Relations Committee on May 18 after USFK announced it might cut as many as 1,000 jobs.

Senior U.S. military leaders said the proposed cuts were necessary because the South Korean government reduced the annual amount it pays to help host the U.S. troops on the peninsula by 8.9 percent to 680.4 billion won (about $680 million).

USFK and the union came to an agreement on the grievance on June 17.

Kang said Friday he was disappointed the payment-in-kind allowance dropped and said most South Korean employees in the private sector receive an annual pay raise of 5 percent.

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