Medium-sized firms get break on 52-hour week

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Medium-sized firms get break on 52-hour week

The government has decided to give an extra year to medium-sized businesses to institute a controversial 52-hour workweek.

But the decision isn’t sitting well with unions and even the business community - for different reasons.

“Only 20 days is left before the enactment of the [52-hour workweek] law for companies with 50 to 299 employees,” said Lee Jae-kap, employment and labor minister, on Wednesday, announcing the year grace period. “But complementary steps that the government could administratively take are necessary to help the early settlement of the 52-hour workweek and resolve uncertainty in the field.”

There was speculation that the government might give an additional six-month grace period on top of the one year for some industries or types of businesses.

Lee said the government decided to give a one-year leniency period for the medium-sized companies to prepare for the shorter workweek.

“However, the leniency period does not simply mean that a crackdown or penalties are being suspended,” the labor minister said. Companies should still try to comply with the law as soon as they can, he said.

More than 40 percent of medium-sized companies are not prepared, Lee said.

“Half of the businesses that are unprepared said they have problems with higher labor costs and getting new employees,” Lee said.

During the one-year grace period, the ministry will do its best to help companies, including dealing with them individually, Lee said.

In a separate meeting on Wednesday, Finance Minister Hong Nam-ki said the government will expand its support for companies adjusting to the shorter workweek. He said the government will increase its support for companies hiring foreign workers.

“We will change the enforcement rule by January next year in approving special work extensions to include temporarily increased work forces as well as research and development,” Hong said.

The business community stressed the need for other legislation that will guarantee flexibility in the regulations and allow longer working hours for specific fields.

“In order to comply with the 52-hour workweek while still improving companies’ competitiveness, the working hour legislation needs to guarantee flexible working hours,” the Korea Enterprises Federation said in a statement.

The federation noted that companies’ efficiency will suffer if they need the approval of the government every time for special extensions.

The Korea Economic Research Institute, run by Korea’s leading business lobbying group, the Federation of Korean Industries, said in a statement that the government’s grace period is not a fundamental solution.

The institute noted that the grace period does not suspend penalties for violating the 52-hour workweek.

“There are still uncertainties that could make [small- and medium-sized enterprises, or SME,] owners criminals and threaten the competitiveness not only of SMEs, but also even conglomerates,” the research institute stated.

The Federation of Korean Trade Unions said in a statement that the grace period and any approvals to extend working hours go against the purpose of the shorter workweek legislation that passed in February 2018.

The Korean Confederation of Trade Unions said it denounced the government and National Assembly for backtracking on promises to shorten working hours.

In February 2018, a law that shaved off 16 hours from the previous 68-hour workweek to 52 hours was passed and was implemented on any businesses that had more than 300 employees in July 2018.

Under the initial schedule, that same law was supposed to be implemented on businesses with 50 to 299 employees in 2020 and businesses with five to 50 employees in July 2021.

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