Post-Retirement Reemployment and Age Discrimination － A Critical Analysis of Wage Reduction under Article 21(2) of the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion －

As Korea experiences rapid population aging and a declining working-age population, post-retirement reemployment has become an important means of maintaining older workers’ participation in the labor market and securing experienced labor for employers. However, many reemployed older workers continue performing the same or similar work as before retirement while being hired under fixed-term contracts with reduced wages or less favorable working conditions. This raises concerns about whether such treatment constitutes unlawful discrimination. This article argues that Article 21(2) of the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion should not be interpreted as a blanket justification for wage reductions after retirement. While the provision allows employers to redesign wage systems upon reemployment, it does not exempt them from complying with anti-discrimination principles. Reviewing Korean court decisions and the Japanese Nagasawa Transport case, the article shows a growing emphasis on examining whether wage differences are objectively justified rather than relying solely on labor-management agreements or the special status of post-retirement workers. The article further contends that wage reductions in post-retirement reemployment involve both fixed-term employment discrimination and age discrimination, since the unfavorable treatment is closely tied to reaching retirement age. Accordingly, both legal frameworks should be applied together. Wage reductions should be considered lawful only when they are proportionate to actual changes in duties, responsibilities, working conditions, performance expectations, or income-protection arrangements. Otherwise, such practices risk institutionalizing lower wages for older workers and undermining the value of their labor.