Gov’t to propose bill allowing flexible working hours in chip industry

(MK database)

Major semiconductor companies in Europe such as Siemens AG and Infineon Technologies AG once had significant influence, but they lost competitiveness amid a growing trend of reducing working hours, according to Representative Koh Dong-jin of South Korea’s ruling People Power Party.

“There were many semiconductor companies in Europe, but if you look into why they lost competitiveness, a major reason is the reduction in working hours,” Koh, a former chief executive officer of Samsung Electronics Co., told reporters.

“Even developing a mobile phone requires about three months of intense work, which is not feasible under current (52-hour workweek) regulations in our country,” he said.

Koh’s remarks come as the government and the ruling party plan to propose a special semiconductor bill aimed at excluding certain jobs from the country’s 52-hour workweek system if labor and management agree when necessary.

The ruling party plans to officially introduce the bill on Monday, according to Kim Sang-hoon, chairman of the party’s policy committee, on Sunday.

The proposed bill will limit exceptions strictly to high-tech industries engaged in “new product or technology research and development.”

Even if they are engaged in research and development, specific income criteria and other details will be regulated by presidential decree, which means that workers below a certain income threshold will still be subject to the 52-hour cap, even if the employees and their company agree otherwise.

The government is also showing a more flexible stance as there have been criticisms of its uniform working hour regulations.

It remains uncertain, however, whether the main opposition Democratic Party will agree to pass the proposed bill.

Major countries are actively running systems providing labor regulation exceptions for high-income or specialized workers.

The United States has a “White Collar Exemption” system that allows high-income senior managers, administrators, and professionals earning over $107,432 per year to operate free of work-hour restrictions.

Japan also implemented a “highly qualified professional” system in 2018 to exempt R&D professionals, certified accountants, and lawyers who earn more than 10.75 million yen ($70,377) per year from work-hour restrictions.

China’s information technology (IT) sector also has a practice of working from 9 a.m. to 9 p.m., six days a week, while Germany has a flexible working hour system that guarantees time off or extra pay for professionals who work overtime.

In Taiwan, laws guarantee a certain number of hours of overtime and compensation if employers and labor unions agree, enabling continuous R&D shifts at Taiwan Semiconductor Manufacturing Co. (TSMC), the world‘s No. 1 foundry company.

“Our talented R&D professionals in highly competitive industries are limited in their performance due to our work-hour restrictions,” said an official from the business circle. “If our semiconductor sector loses competitiveness, it could lead to an irreparable technological gap.”

The ruling party also plans to include a provision that will allow the government to provide direct subsidies to semiconductor-related companies in the belief that the semiconductor ecosystem would be healthier if not only large corporations such as Samsung Electronics but also small and medium-sized companies that specialize in R&D received support.

The current government support is mainly based on tax benefits, which do not actually benefit SMEs that have yet to generate sales, experts said.