40-hour Workweek to Apply to Workplaces With Fewer Than 20 Employees effective 01 July 2011
The 40-hour workweek will apply to workplaces with 5 to 20 employees starting 01 July 2011.
The Ministry of Employment and Labor (MOEL) said that an amendment to the Enforcement Decree
of the Labor Standards Act containing these provisions, has been approved and confirmed at the
cabinet meeting on December 21, 2010.
With the application of the 40-hour workweek to workplaces with less than 20 employees, the
process of introducing the 40-hour workweek, which has been brought into force in stages since it
was first applied to workplaces with 1,000 or more employees on July 1, 2004, has been concluded.
Target
Workplaces
Workplaces with 1,000
or more
employees
Effectivity
01 July 2004
Date
•
300-1,000
employees
100-300
employees
50-100
employees
20-50
employees
5-20
employees
01 July 2005 01 July 2006 01 July 2007 01 July 2008 01 July 2011
On July 1, 2004, the 40-hour workweek was introduced in financial and insurance businesses,
government-invested institutions, local public companies and corporations, public institutions,
etc.
The number of workplaces with 5-20 employees, newly required to introduce the 40-hour workweek,
is estimated to be 300,000 where a total of over two million employees are working.
•
Since workplaces with fewer than five employees are not subject to the provisions of the
Labor Standards Act concerning working hours and leave, the 40-hour workweek does not
apply to them.
However, applying the 40-hour workweek to workplaces with fewer than 20 employees does not
necessarily mean that these workplaces must implement a five-day work week. They may
introduce a six-day, five-day or four-day work week as long as working hours do not exceed 40
hours a week.
In addition, it is possible to ask workers to work up to 16 overtime hours a week under labormanagement agreement for three years after the introduction of the 40-hour workweek, and up to
12 overtime hours a week thereafter.
Along with the implementation of the 40-hour workweek, the working hour and leave system will be
changed accordingly. Monthly leave will be abolished, and menstruation leave made unpaid. The
method of calculating annual leave will be changed. Instead of earning 10 days of annual leave after
his/her first one year of service and accruing one day of leave for every year of service thereafter, an
employee will be entitled to 15 days of annual leave after completing his/her first year of service, and
accrue one day of leave for every two years of service thereafter.
Meanwhile, since 2004, MOEL has introduced the 40-hour workweek on a phased basis depending on
size of workplace, and provided working hour reduction subsidy for SMEs if a workplace voluntarily
reduces working hours at least six months before the effective date of the law. However, that subsidy
will expire at the end of this year as the 40-hour workweek will apply to workplaces with fewer than
20 employees from July 1, 2011.
When the 40-hour workweek is implemented, work arrangements, employment rules, employment
contracts, leave systems, etc., need to be changed accordingly, In this respect, workplaces with less
than 20 employees, which are not familiar with labor laws, may face difficulties in introducing the
40-hour workweek.
Under the circumstances, MOEL, in cooperation with employers' organizations, etc., plans to hold
information sessions all around the country in 2011 to educate these workplaces in matters they
should consider when introducing the 40-hour workweek. It will also provide online education to
workplaces unable to participate in such information sessions.
MOEL will also set up a counseling center which provides counseling on the phone, via the Internet,
or in person with regard to questions arising from the introduction of the 40-hour workweek.
Jeong Hyun-ok, Director-General of the Labor Standards Bureau, MOEL, said, "Korea still has the
longest working hours among OECD countries. But once the 40-hour workweek is fully
implemented, consequent shorter working hours are expected to greatly improve productivity and
workers' quality of life."
"There is concern in some quarters that the 40-hour workweek could increase the burden of labor
costs on small workplaces with less than 20 employees, but in practice, it will not cause a heavy
burden given the reduction in the overtime rate, the abolition of paid monthly and menstruation
leave, and so on." she added.
•
Rate of extra pay for overtime work (overtime rate) : For three years after the introduction of
the 40-hour workweek, the rate of extra pay for the first four hours of overtime worked can
be lowered from 50% to 25%.
•
About 80% of workplaces introducing the 40-hour workweek saw either no change or a fall in
the total monthly wages of their workers (Survey by the Korea Certified Public Labor
Attorneys Association, 2008).
URL: http://www.moel.go.kr/english/topic/working_view.jsp?idx=702