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S. Korea to make work schedule more flexible, encourage performance-based pay model

Labor Minister Lee Jung-Sik (Yonhap)
Labor Minister Lee Jung-Sik (Yonhap)

The Ministry of Employment and Labor on Thursday announced its policy plans, which are expected to increase labor market flexibility.

During the first press briefing held after his inauguration at the government complex in Sejong, President Yoon Suk-yeol‘s first Labor Minister Lee Jung-sik focused on two issues, the country’s 52-hour workweek policy and seniority-based pay models adopted by the majority of companies in South Korea.

According to Lee, the government will review options to allow companies to calculate overtime on a monthly basis in the future so that certain industries can handle excessive workloads better than they do on a weekly basis. Under the new scheme, overtime can be potentially extended up to 92 hours a week, but employees will be compensated with day-offs, according to Lee.

The Moon Jae-in administration had limited the hours that people could work to 52 -- which included 40 regular hours and 12 hours of overtime. The government then regulated the overtime to be calculated on a weekly basis to enforce the new law.

Yoon, however, during his presidential campaign, criticized the 52-hour workweek policy and hinted that he would introduce changes that could allow a more flexible working schedule.

Whether companies adopt the new rule, however, will be up to individual management-labor negotiations, according to the ministry.

Lee explained that changes in the 52-hour workweek policy are needed as more industries, particularly those dealing with information technology and software, require a flexible working schedule based on industry demands and the nature of their jobs.

Lee also stressed that the country should move away from seniority-based pay models, in which employees naturally see pay increases as they progress through their careers.

Lee argued more companies should be able to introduce performance-based pay models so that management could better handle the increasing salaries of senior workers, which the country expects to expand further in the future due to a rapidly aging population.

Lee added that seniority-based pay systems do not fit with the current labor market‘s high turnover rate.

In South Korea, around 70 percent of the companies with over 1,000 workers currently adopt seniority-based pay models, while 55.5 percent of companies with over 100 employees use seniority-based pay models.

Meanwhile, Lee stressed that the government will in no way introduce policies that would increase layoffs.

By Shim Woo-hyun (
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Korea Herald daum