Twelve-Hour Cap on Weekly Overtime to Be Removed

Kwon Soon-won, a professor at Sookmyung Women’s University, announces the recommendations of the Future Labor Market Research Association at the President Hotel in Seoul on December 12. Courtesy of the Ministry of Employment and Labor

The Future Labor Market Research Association, which has been researching improvements to the nation’s labor market upon request from the Ministry of Employment and Labor, recommended the government to change the unit for managing overtime from the current week to a maximum year on December 12. If the government accepts the recommendation, workers can work up to 69 hours a week, from the current 52 hours. The association also advised the government to change the wage system, currently based on the years of service, to one centered on tasks and performances. The Korean Confederation of Trade Unions criticized the latest recommendations as “advice for the worse, which leaves the decision on wages and working hours in the hands of the employer.”

Monday morning, the Future Labor Market Research Association released their final recommendations including these details at the President Hotel in Jung-gu, Seoul. The association announced, “The current working hour system is no longer suitable for technological innovations and the digital revolution,” and said, “The limitation of a universal system, such as reducing the legal working hours, is apparent. Therefore, we need to shift our way of thinking from square one.” The association said, “We also need to revise the wage system into one linked to the tasks and capabilities of the individual.”

The Future Labor Market Research Association was launched on July 18 to discuss labor reforms for the government. However, the opinions of labor, a concerned party, were never properly collected. All twelve members of the association are college professors and a meeting with labor was never held.

Last month, when the association met with businesspeople and experts, they said they would hold a separate meeting with labor, but the meeting never happened. The recommendations that the association released Monday are expected to be accepted in most parts by the government, so they could be seen as the big picture of labor reforms, which the Yoon Suk-yeol government presented as one of its three major reform tasks.

A key change is that they removed the 12-hour restriction on weekly overtime. The new system will manage overtime on a monthly, quarterly, half yearly, and yearly basis instead of the current weekly system. According to the association’s directions, when the unit for managing overtime increases, overtime restrictions will be set at 52 hours a month, 140 hours a quarter (three months), 250 hours a half year (6 months) and 440 hours a year. They advised the government to ensure eleven consecutive hours of rest between working hours as a measure to protect the workers’ right to health.

According to the current Labor Standards Act, weekly working hours, excluding break time, cannot exceed 40 hours. However, when there is an agreement between the employer and workers, working hours can be extended up to twelve hours a week.

If the standard for managing overtime changes from a week to a month as the association suggested, working hours can be extended up to 69 hours a week. Workers can work up to 29 hours of overtime, and the daily average work time can reach eleven hours and thirty minutes based on a six-day workweek.

The association argued that changes to the working hours would give workers the right to choose. Also, they said if the cap for overtime was set on a monthly, quarterly, half yearly or yearly basis, it would not be much longer compared to the monthly hours (52 hours). However, there are still concerns that work intensity is just as closely related to overexertion at work as working hours. The only measure to protect the workers’ right to health presented by the association was the guarantee of a consecutive eleven hours of rest. The association also left measures concerning nighttime labor in the hands of the labor ministry. They explained, “We reviewed the issue from various angles, but there was a limit to the recommendations that we could make.”

The Future Labor Market Research Association added the condition that the employer and labor representative must sign a written agreement in order to change the overtime standard from the current week to a month or longer unit, but since only 14% of workers belong to a union, it is doubtful as to whether labor and management can sign an agreement on an equal footing in Korea.

The association also suggested that the government expand the period and availability of the selective working hour system. The selective working hour system is a form of flexible working hours. It allows workers to select the working day and hours as long as they work an average 52 hours a week. In the past, only people in research and development (R&D) were given the choice for up to three months, while the system was available to workers in other fields for only a month. The association suggested that the system be available to workers in all fields for up to three months. They also recommended the government to improve the method of selecting labor representatives for each section to allow the introduction of flexible working hours according to various job types in the workplace.

As for the wage system, the association advised the government to change from one based on the years of service to one centered on tasks and capabilities. The association claimed that wage systems should be designed and established for SMEs and workers and according to industries as well. They said, “The government should seek legal improvements and clarify the scope of parties that need to consent to changes in the employment regulations, so that the wage system can reflect the diversity of the work, job, and job types.”

They also instructed the government to improve relevant policies, such as wages and job adjustments, to continue employing aged workers and to install and operate a wage committee for co-prosperity and to constantly supervise workers to prevent the misuse and abuse of the blanket wage system.

The association also told the government to improve the predictability of distinguishing between dispatched workers and contract workers and to review legal and policy improvements concerning the employment of substitute workers, and restrictions on occupying the workplace. Labor criticized the recommendations and said, “They are trying to ease the standards for dispatched labor and violating the right to strike guaranteed by the Constitution.” The association explained, “We were not suggesting a particular answer. We only mentioned that there was a need to seek additional reforms.”

The labor ministry will discuss whether to accept the latest recommendations or to further collect opinions. They are expected to announce the government reform proposal as well as plans for related legislation as early as the beginning of next year.

Minister of Employment and Labor Lee Jeong-sik wrote on Facebook Monday, “It will be hard for anyone to object to the expert diagnosis,” and added, “I will do my utmost to complete reforming the labor market. We will prepare the legislation as soon as possible.”