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South Korea: Amendments to workweek rules, overtime and public holidays

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April 20, 2018

New amendments to South Korea’s Labor Standards Act affect the workweek, parental leave, overtime pay, annual leave and paid public holidays for the private sector.

EMPLOYER ACTION CODE: Act

They reflect the government’s desire to change a culture of long working hours and improve work/life balance. Koreans worked an average of 2,069 hours in 2016, third highest among Organisation for Economic Cooperation and Development (OECD) member countries (OECD data).

KEY DETAILS

Workweek redefined and reduced from 68 hours to 52 hours

  • From July 1, 2018, the workweek will be defined as seven days (including Saturday and Sunday) replacing the standard (but undefined) five-day workweek of Monday to Friday. As a result, the maximum workweek will be reduced from 68 to 52 hours (40 hours of normal work + up to 12 hours of overtime) as rest days and Sundays will no longer be treated separately. The new law will initially apply only to corporations with 300 or more workers before being extended to smaller companies in 2020 and 2021.
    • Five industries exempted from maximum workweek legislation: From September 1, 2018, the number of industries where employers can negotiate agreements with workers to waive the existing 12-hour weekly overtime limit will be reduced from 26 to just five: marine, air, and land transportation (excluding bus services), postal delivery services and health care industries.

Overtime pay

  • Effective March 20, 2018, employees who work eight hours or less on a public holiday are paid 150% of ordinary wages, and 200% or more for working more than eight hours.

Annual leave for new employees and employees using parental leave

  • As of May 29, 2018, new employees will be entitled to up to 11 days of paid annual leave in their first year of service and 15 days from year two. Currently, workers accrue one day of leave per month in their first year but any leave taken in year one is deducted from year two leave. A separate amendment, to be promulgated shortly, will count periods of parental leave toward service for annual leave.

Paid public holidays applicable for private sector employees

  • Paid public holidays will become statutory entitlements for most private sector employees. Currently, only Labor Day is a statutory paid holiday. Observance of other holidays is based on internal work rules or collective bargaining. The law will apply to companies with 300 or more workers from January 1, 2020; those with 20 to 299 workers from 2021 and companies with five to 19 workers from 2022.

EMPLOYER IMPLICATIONS

Employers should review their policies and examine how these changes may affect them. Companies with employees who work more than 52 hours a week should expect increased employment costs due to the reduced working hours.

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