SK Hynix Workers Reject Tentative Wage Agreement by Narrow Margin

SK Hynix's tentative wage and collective bargaining agreement has been rejected by its union members following two months of negotiations. The vote against the agreement was decided by a narrow margin of just 25 votes, prompting both sides to prepare for further negotiations regarding the distribution of performance bonuses, known as PS.

According to industry sources, the SK Hynix labor union conducted an electronic vote from August 24 until 9 a.m. on August 25, resulting in 50.08% (7,535 votes) against and 49.92% (7,510 votes) in favor of the 2026 wage agreement. A total of 15,045 out of 16,083 union members participated in the vote, yielding a turnout of 93.81%. With a majority voting against the agreement, both parties will return to the negotiation table.

The main point of contention in this wage agreement was the method of PS distribution. On August 20, the two sides had reached a tentative agreement that included a 6.3% wage increase and a distribution of 40% of the PS in cash, with the remaining 60% to be paid in company stock.

Of the stock portion, 40% would be paid in the current year, while the remaining 20% would be deferred over the next two years in 10% increments. However, for the PS to be paid in early 2026, employees would have the option to receive the stock portion in cash, allowing for a maximum of 80% to be received in cash.

To mitigate potential losses for employees due to stock price fluctuations, a safeguard was established. The number of shares to be issued will be calculated based on the lowest closing price among three key dates: the annual provisional performance announcement date, the PS cash payment date, and the stock payment date.

Despite these measures, there remains significant opposition within the union advocating for the PS to be paid entirely in cash, as per previous agreements. Notably, the newly formed unified union, which encompasses both production and administrative staff, has expressed its opposition to converting any portion of the PS into stock.