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2 Mar 2018

Korea’s Maximum Weekly Working Hours to Be Reduced to 52

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Korea’s Maximum Weekly Working Hours to Be Reduced to 52

On February 28, 2018, Korea’s National Assembly approved a bill amending the Labor Standards Act (the “LSA”), Korea’s primary employment-law statute. The bill, once signed and promulgated by the President, will prospectively resolve a long-standing controversy over the treatment of weekend working hours, restrict the use of labor-management agreements allowing excess overtime, and make all Korean public holidays mandatory paid days off.

This bill will effect the following primary changes:

1) The maximum weekly working hours will be 52, consisting of 40 regular hours and 12 overtime hours. A 68-hour work week, consisting of 40 regular hours, 12 overtime hours, and up to 16 day-off (weekend) hours, will no longer be possible for most employers.
2) Premium pay will continue to work as it does under the current Ministry interpretation that has been challenged in the courts. For work on regular days off—which generally includes one or both days of the weekend—the premium will be only 50% for the first eight hours of each day, even if the employee has already reached the 40-hour weekly regular-hours limit. An additional cumulative 50% overtime premium will only be earned for work beyond eight hours on a regular day off.
3) The list of industries in which businesses are allowed to reach an agreement with a labor representative allowing more than 12 hours of overtime per week, will be significantly reduced. And workers in any of the remaining five special industries—which cover only certain transportation and healthcare industries—will be required to have a break of at least 11 continuous hours between their work shifts.
4) Governmental public holidays will now be mandatory paid days off for private employers in addition to Labor Day (May 1), though employers already very frequently offer public holidays voluntarily.

The new rules will become effective in several phases, with the first major change being enforcement of the 52-hours rule for employers with 300 or more employees beginning July 1, 2018. Please note that the change regarding premium pay for weekend work will become effective immediately upon promulgation.

Violation of the working-hours rules and failure to pay full wages (including overtime/day-off premium pay) were already subject to criminal penalties. But with these new changes, employers will have to pay special attention to their current practices. In particular, employers who have been making use of the extra weekend working hours, or who are not already granting all public holidays to their employees, will need to bring their practices into compliance by the effective dates above. And employers in special industries who have been relying on labor-management agreements to assign excess overtime to employees, and who will lose their industry exemption, will have to make other arrangements.

Adapting to the new working-hours rules, in particular, will in many cases require employers to revise their employment agreements, rules of employment, and/or collective bargaining agreements, which will quite likely involve labor-management consultation and may even require workforce consent. We thus strongly recommend that employers begin to carefully consider and prepare for these changes soon.

Please click the link below to see a more detailed explanation of these changes.
More details

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Kang, Hee-Chul Cho, Sang Wook
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Park, Jae Woo Lee, Soojung
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Mandel, Christopher    
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