Sticking up for the little guy

The National Assembly environment and labor committee on Tuesday approved a bill revision to cut weekly working hours to 52 from the current 68. The rivaling parties came to an agreement to reduce the notoriously rigorous work hours after five years of debate.
Korea’s labor conditions could drastically change after the bill passes the National Assembly. Korean salaried employees worked an average of 2,069 hours a year in 2016, 305 hours longer than the average among members of the Organization for Economic Cooperation and Development. The government believes Koreans could gain quality evening time and more jobs could become available to help reduce work hours.

That is all theory. The reality could end up being the opposite. Small workplaces are already struggling with increased labor costs from a spike in the minimum wage. The additional burden of reduced working hours could eat into their bottom line.
According to the Korea Economic Research Institute, companies would have to spend an additional 12.1 trillion won ($11 billion) a year to keep to legal working hours of 52 per week.

About 70 percent of the amount would be billed to small and mid-sized companies as they would have to hire an extra 266,000 employees to make up for labor shortages and pay employees more for working on legal holidays.

The new legislation will be imposed on workplaces employing 300 people or more from July, but the government will permit a grace period for smaller companies and apply the bill to workplaces of 50 or more employees from January 2020 and five or more from July 2021. Workplaces employing 30 or fewer will be granted unpaid overtime of eight hours. But that may not be enough. Small and mid-sized manufacturers must run factories throughout the year to meet the delivery schedules and demands of large clients.

If they cannot afford to hire more, they may have to turn to automation. Wages of workers at small workplaces could be reduced from the cut in working hours. The National Assembly should give more thorough study and include flexible exception clauses so that small and mid-sized firms are no longer damaged by rash transitions.

JoongAng Ilbo, Feb. 28, Page 30