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Amendment to Labor Standards Act Reduces Working Hours

On February 28, 2018, the National Assembly approved an amendment to the Labor Standards Act (LSA) that made changes to South Korea’s working time laws. Among other changes, it will reduces the maximum number of hours in a workweek from 68 hours to 52 hours.

The main features of the amendment are as follows:

Weekends and Public Holidays

As a preliminary matter, the amendment clarifies that the reference period of “one week” includes Saturdays, Sundays, and public holidays. Prior to the amendment, some interpreted the LSA as allowing weekend work to remain outside the 52-hour-per-week limit, meaning an additional 16 hours of weekend work (8 hours on both Saturday and Sunday) could be included, which would result in a weekly total of 68 hours. It is now clear that weekend and public holiday hours must fall within the 52-hour maximum.

The implementation date for this change will be based on the number of employees a business has:

Until December 31, 2022, businesses with 30 or fewer employees may obtain a special extension to the workweek hours limit of up to 8 hours per week via written agreement with the employees’ representative.

Enhanced Pay for Any Work Performed During Holidays

There will also be a requirement to pay higher rates for work performed on holidays (including the weekly paid holiday). Employees will receive a 50 percent holiday pay premium for their first 8 hours of such work and a 100 percent pay premium (holiday premium plus overtime premium) for any hours worked beyond 8.

Private Companies to Provide Paid Public Holidays

A further change will require private companies to provide paid public holidays. This was previously a requirement limited to public agencies. There is a slightly different schedule for implementation of this part of the amendment:

Sector Exemptions Reduced

The number of sector categories excluded from workweek hours limits went from 26 to 5. The 5 remaining categories of sectors are land transportation (excluding passenger vehicle transportation with service routes), water transportation, air transportation, other transportation services businesses, and health services (such as hospitals). In these cases, workers are entitled to at least 11 continuous hours of rest between shifts. There is a small concession to the 21 sectors that are no longer included in the exemption in that they will have more time to comply with the 52-hour maximum workweek requirement; businesses with 300 or more employees must comply by July 1, 2019 instead of July 1, 2018.

Comment

Recognizing that this amendment will have a substantial impact on some businesses, the government has announced a six-month grace period for companies with 300 or more workers to come into compliance with the new working-hour requirements. During this grace period, the Ministry of Employment and Labor will not pursue audits or enforcement actions in relation to the new working hour requirements. As this is merely a pause on enforcement, not a change to the effective date of the amendment, employers may want to use the grace period to adjust their working-hour practices to bring them into compliance with the amendment.

Written by Robert R. Flemer (attorney) and Dr. Yanggyu Byun (labor economist) of Kim & Chang and Roger James of Ogletree Deakins