Subscribe
E-Paper
 |
| Thousands of young jobseekers are seen at a job fair expo at Bexco Convention Center in Busan. / The Korea Times file |
By Kim Hyun-bin
The government has pushed forward with a labor reform policy that aims to drastically reduce the maximum statutory working hours from 68 hours to 52 a week, which includes weekends and holidays within the scope of a working week.
Under the revision, working hours per week will be limited to 40 with 12 hours of overtime.
The revision will be applied in stages starting with companies employing 300 or more workers July 1, workplaces with 50 to 299 and small companies with five to 49 employee's will adopt the reduction of work hours from Jan. 1, 2020 and Jul. 1, 2021 respectively.
Koreans worked an average of 2,069 hours in 2016, 300 hours more than the OECD average of 1,700 hours.
President Moon Jae-in said that the labor reform is a valuable opportunity to increase the number of jobs as the reduction can lead to job sharing.
"A recent study conducted by the Korea Labor Institute shows, the reduction of maximum statutory working hours is expected to create 11,000 to 17,000 new jobs," said an official from the Ministry of Employment and Labor (MEL).
The government hopes the reduced working hours could be used to increase youth employment.
The unemployment rate for people aged 15-29 stood at 9.8 percent at the end of last month, more than double the overall rate, which stood at 4.6 percent, according to data from Statistic Korea.
"We expect a good portion of the new jobs will be used to hire young people and in turn reduce youth unemployment," said an official from MEL.
The Ministry of Strategy and finance rounded up a supplementary budget of 4 trillion won ($3.75 billion) to aid various programs to boost youth employment at small- and medium-sized companies.
The government plans to use the funds by subsidizing wages and offering tax exemptions for companies.
The country's SMEs have been suffering from chronic shortages of manpower and hope the funding could help encourage 200,000 young job seekers get jobs.
The program gives entry level workers at SMEs 10 million won annually in the form of wages, allowances and income tax exemptions.
The workers will be provided with the benefit for three years, which the finance ministry says is equivalent to one-third of the annual salary of full-time employees at large firms.
The allowance aims to narrow wage discrepancy between small and large firms, which have been a key reason young jobseekers were hesitant to start their careers at small firms. Many who do quit after working a couple of years.
However, many experts have doubts that the temporary incentives will be enough compensation for young people to give up their efforts to land jobs at large corporations.
The Korea Federation of Small and Medium-sized Enterprises also voiced concerns suggesting ways to cushion the possible impact from the revision, including government subsidies to overcome shortages in manpower.
It also requested the government provide various financial benefits, including a deduction in social insurance fees for workers that will be hit with a decline in wages.
Many employees at small-and-medium sized firms have shown concerns, fearing that reduced working hours may lead to reduced wages and widening the payment gap between large and small firms.
Meanwhile, people working at major corporations and public officials mostly welcomed the revision as they are able to find a better balance between work and leisure activities.
On top of the labor hour reduction, the government raised the minimum wage by 16.4 percent to 7,530 won (US$7) starting this year, the biggest jump in about two decades.
Some experts are concerned that pro-labor measures could force an increasing number of local firms to move production abroad, which could see a reduction in even more jobs in the future.
