Working on the work week
The work week will be capped at 52 hours
— 40 in basic time and 12 overtime. Koreans have so far worked 68 hours a week since working during holidays did not count as overtime.
The new hours will be imposed incrementally as capping overtime to 12 hours could aggravate a chronic labor shortage at small and medium-sized businesses. The guideline will be rolled out in four stages and categories.
The new regulation will take effect July 1 starting with companies employing 300 or more workers. Midsize companies with 50 or more employees will adopt the new work hours starting Jan. 1, 2020, and small businesses with fewer than 50 people will start from July 1, 2021.
Still smaller workplaces with fewer than 30 workers will be granted eight additional hours of overtime a week from July 1, 2021 to Dec. 31, 2022.
There will be no premium for working on a day off. In principle, anyone who works on a weekend shall be compensated with 50 percent of basic pay, and this work should not exceed eight hours. Any work beyond eight hours during a weekend must be fully compensated with 100 percent of basic pay.
The new law also expands the scope of holidays. Starting Jan. 1, 2020, companies will have to start paying employees for working on public holidays. Before, only public-sector workers enjoyed such benefits. As result of the new law, private-sector workers will get paid additionally for a minimum 15 days a year. The state is ensuring additional holiday pay to compensate for the ban on premiums for working on days off.
The revised law could affect the lawsuit over overtime and premium pay pending at the Supreme Court. The heart of the dispute over premiums is that if a worker showed up on a weekend, he or she could be entitled to overtime pay plus pay for working on a holiday.
The design of the new legislation could be undermined if the Supreme Court delivers a different interpretation. Under the new law, premiums are not allowed for holiday work, and the work week’s length differs by the size of the company starting July 1, 2018.
The bipartisan law, born despite strong protests from concerned interest groups, leaves much to be desired. It should have given more room for exceptional overtime. To minimize confusion in industrial sites from reduced work hours, the law should have allowed exceptions in overtime beyond legal work hours to enable continuation of work under special cases.
It is also unrealistic to demand small and medium-sized enterprises and manufacturers that cannot afford scaling up automation to reduce work hours within the next two years. Employees might also be disgruntled by pay cuts. If the government cannot change the timeline for imposing the new work hours, it should consider extending the scope and target of grants in exceptional overtime.
The new law also does not include flextime. In the appendix, the law recommends the Minister of Employment and Labor consider improving flexible work schedules and allowing workers to alter their start and finish times during the day by Dec. 31, 2022. In short, the incumbent administration can transfer the task of making legal grounds for flextime onto the next government.
Flextime must be allowed in order to offset negative effects from reduced hours. Standard and rigid work hours will only aggravate the labor shortage and increase costs for employers. In the age of the fourth industrial revolution, workers need more breaks and retraining to come up with innovative ideas.
The government must provide various support for small and medium-sized companies to adjust to the new work hours during the grace period so that they do not suffer additional damage, especially after the minimum wage was raised this year by a record amount.
The National Assembly’s Environment and Labor Committee, too, should not think its work is done by passing a bill to shorten work hours. It must go on discussing alternative measures to hone corporate competitiveness and productivity.
Translation by Korea JoongAng Daily staff
JoongAng Ilbo, March 6, Page 29
*The author is a professor at the Korea University School of Law.