North Korea is demanding a pay raise for workers at South Korean factories in a joint venture industrial zone, threatening to boycott overtime work unless the demand is met, a South Korean official said Friday.

About 16,000 North Koreans are employed at 26 South Korean factories in the factory park in the North Korean border city of Kaesong, receiving a minimum US$50 (€36) a month. An average salary amounts to about US$60 (€44), given overtime and other allowances, South Korean officials say.

The North's government is demanding a 15-percent raise in the minimum salary starting in August, although it had agreed to raise the wage by no more than 5 percent a year, a South Korean Unification Ministry official said on condition of anonymity citing the issue's sensitivity.

"The North appears to be seeking raises for the past three years altogether," the official said. "We haven't made any decision on this yet. We will discuss it with the North Korean side."

The minimum wage of North Korean workers have been frozen at the same level since the park's opening in late 2004.

Cheap labor has been considered a main strong point of the Kaesong complex.

International critics has often criticized the industrial complex, alleging that North Korean workers are being ill-treated, citing a lack of labor rights and low wages paid through the North Korean government rather than directly to the workers.