South Korea proposes a flexible hours system

On 23 June 2022, the Ministry of Employment and Labour released a series of proposals to the working hour and the wage system in South Korea, aiming to give to give employers and workers more flexibility post-covid.
Among the proposed measures there is a plan to increase the period for calculating overtime under a so-called flexible working hours system.

South Korea already has one of the longest working hours among member states of the Organization for Economic Cooperation and Development. The country had the fourth longest working hours in 2020, with 1,908 hours per year on average.

The ministry announced that it will consider managing the overtime limit, currently set at 12 hours per week, on a monthly basis and there would be no weekly working-hours limit.

As the current 12-hour weekly limit for overtime work, calculated for all the weeks in a month, leads to 52 hours, this mean the proposal would lead to a maximum of 92 hours in a week if one employee uses up all his overtime work hours in a single week (40 regular work hours + 52 hours of overtime work).

Another proposed reform is to expand the categories of workers excluded from the working-hours and overtime rules, covering also new industries and highly paid professionals.

Moreover, the administration wants to change the nation’s minimum wage system from a seniority-based pay models to a pay based on regions and industries around job function and performance.

The proposed new working-hour scheme requires amending existing labour laws and the Ministry of Labour and Employment has set concrete legislative and policy tasks for a research group of experts, called to conduct activities from July to October, to discuss the future of the labour market.

The Korea Enterprises Federation had called on the new government to eliminate regulations that 'hinder entrepreneurial activity' to facilitate post-pandemic recovery: “Labour flexibility needs to be improved for enterprises to adequately respond to rapidly changing business environment” said the Chairman, Sohn Kyung-shik.

In a recent statement, the Federation welcomed the Labour Ministry’s plans to revise the current policy on working hours and wages and said the move would “help create jobs” and “solve the economic crisis.”

The Federation of Middle Market Enterprises of Korea has also said that managing overtime work hours on a monthly basis would “help solve the issues faced by companies and workers.”