On June 23, the Ministry of Employment and Labor announced that it would change government policies on working hours to allow workers to work more than twelve hours of overtime a week. The ministry claimed the purpose of the change was to modernize the labor system to meet the changing times, but such changes could make long hours of labor a permanent feature in our labor market, so controversy is expected. Last year, the annual working hour in South Korea was 1,928 hours, over 400 hours longer than the OECD average, which is slightly above 1,500.

This morning at the government office in Sejong, Labor Minister Lee Jeong-sik gave a briefing on the direction of government reforms to the labor market and said, “Currently, overtime is managed on a weekly basis, but we are considering a reasonable way to manage the total amount of overtime, such as a monthly management system based on an agreement between labor and management.”

According to the current Labor Standards Act, basically, working hours cannot exceed 40 hours a week, but when the employer and worker agree, working hours can be extended up to twelve hours a week. If working hours are managed on a monthly basis as the labor ministry suggested, as long as the total overtime does not exceed 48 hours a month (4 weeks), workers can work more than twelve hours of overtime in any one week. According to the math, it would be possible for a worker to work a total of 88 hours a week including the original 40-hour work week plus 48 hours of overtime.

The labor minister said, “Even in other major countries, a weekly-basis overtime management system is hard to come by, and basically, they respect the choices based on agreements between labor and management.” During the presidential election, President Yoon Suk-yeol had stirred controversy by telling workers to work 120 hours in one week and take the rest of the days off.

Minister Lee also said that the government would expand the unit period of flexible working hours. Flexible working hours allow workers to determine their daily working hours while maintaining an average 40-hour work week during the unit period. Lee said, “When it comes to flexible working hours, in other areas, the unit period is one month, while it is three months in the R&D sector. This has made the scope of the policy vague and triggered issues over fairness.” He further said, “We will consider measures to better utilize the policy, such as expanding the unit period to fit the original purpose of the policy, which was to allow workers to adjust their working hours to their convenience.” The minister also announced that the government would introduce a “working-hour savings account” policy.

Minister Lee explained that they were considering these changes to the working hour policy, because the 52-hour work week could not respond to various demands from worksites and to more flexibly utilize working hours at a time when business conditions were growing more complex according to each company and industry. However, the minister made it clear that the government would maintain the basic 52-hour work week. As for concerns that the latest changes could violate the worker’s right to health, the minister said, “To maintain harmony with the worker’s right to health, we will also provide measures to ensure the health of our workers.”

Minister Lee also said that the government would change the wage policy from the current time-based policy to one based on tasks and performance. Lee said, “The time-based wage system was appropriate to encourage long years of service during the days of fast economic growth, but in an age of slow growth, in a labor market with high turnover, it is no longer sustainable.” He explained, “A compensation system not linked to performance can trigger conflicts between employees of a company over fairness, weaken the productivity of the company, and weaken the worker’s will to work. We also discussed establishing a wage information system according to each task, which can provide plenty of information on wages, and expanding consulting services for individual corporations to revise their wage policy.”

The labor ministry will form a Future Labor Market Research Group of experts to discuss the specific tasks, and run the group from next month until October. Minister Lee said, “We will transparently disclose the results of discussions by the group,” and added, “We will also promptly promote follow-up measures, such as amendments.”

Labor protested, while businesses welcomed the latest announcement. The Federation of Korean Trade Unions said, “The direction of reforms to the labor market announced by the government is a declaration to permanently establish the low-wage, long-hour working system, which is a chronic problem in South Korea.” The Korea Enterprises Federation said, “We agree with the government’s direction of improvements to the working-hour system and the wage system and believe they will help overcome the economic crisis and create more jobs.”