Citizens walk past Samsung Electronics' office in Seocho District, Seoul, Oct. 31, when the company announced disappointing third quarter earnings results at its semiconductor division. Yonhap
Politicians and lobby groups in Korea are intensifying their criticism of the country's 52-hour workweek policy, particularly in light of a slowdown in Samsung Electronics' semiconductor business.
Conservative lawmakers and representatives of employers' associations claim that Korea's 52-hour workweek, which was shortened from 60 to as much as 70 hours per week, restricts the research and development capabilities of advanced tech companies. They point to the more flexible work environments in the United States and Japan as examples to emulate. To foster similar flexibility, they suggest that Korea should consider implementing measures such as the U.S. white-collar exemption rule.
The white-collar exemption rule excuses employees paid over $844 per week, or $43,888 per year, from federal overtime pay requirements, particularly for those who worked over the standard 40-hour workweek.
On the other hand, civic groups contend that businesses are using Samsung's financial struggle as a pretext to challenge the workweek system. The groups emphasize that Samsung's disappointing earnings are primarily the result of internal issues rather than the shortened workweek.
Ruling People Power Party (PPP) Rep. Koh Dong-jin said, Tuesday, that he submitted a revision to the Labor Standards Act a day earlier. The revision seeks to exempt workers engaged in research and development roles in industries such as semiconductors, display, biotechnology, and secondary batteries from the 52-hour workweek. Koh, a former CEO of Samsung Electronics, supports this change to enhance flexibility for R&D employees.
Koh noted that the country's current workweek — 40 regular hours and 12 overtime hours a week — needs to be more flexible to improve industrial competitiveness and enable prompt responses to the fast-changing market environment.
"To enhance the competitiveness of Korea's advanced industries including chips, we need to establish a workweek system that ensures labor flexibility," Koh said. "This would create an environment where top talent can work freely without being constrained by limits, while also receiving appropriate compensation for their efforts."
Koh's bill was introduced following the announcement of disappointing third quarter earnings at Samsung Electronics' semiconductor division, whose quarterly operating profit of 3.86 trillion won ($2.8 billion) fell significantly short of market expectations.
The decline in profitability at the chip division prompted the ruling party to prepare a special act focused on the semiconductor industry. This bill is expected to include incentive programs and various administrative support for chipmakers, but reportedly will not incorporate a measure similar to the U.S. white-collar exemption rule.
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Japan has been operating a workweek exemption rule for highly skilled, white-collar professionals earning more than 10.75 million yen ($70,640) since 2018.
PPP Rep. Park Soo-young, who initially proposed the special legislation with the exclusionary rule, emphasized that "the exemption rule is very important for enhancing the competitiveness of the chip industry."
Lobby groups also agree with the necessity of an exclusionary rule.
An official at the Korea Enterprises Federation stated that Korea needs to "introduce various measures to add flexibility to its 52-hour workweek system, such as a white-collar exemption rule."
The Korea Chamber of Commerce and Industry also stressed in a recent report that easing labor market rigidity through flexible workforce management is essential for enhancing the productivity of domestic export companies.
However, civic groups oppose these calls, arguing that businesses are exploiting Samsung's situation as an excuse to undermine the workweek system.
"If the workweek system were to be the true reason for Samsung's slowdown, its domestic competitor SK hynix should have faced similar difficulties, but it didn't," said Oh Se-hyung, a manager at Citizens' Coalition for Economic Justice.
While Samsung's third-quarter earnings raised nationwide concerns about the company's competitiveness, SK hynix reported an operating profit of 7.3 trillion won in the same period, supported by strong sales of AI-specific high-bandwidth memory (HBM) chips.
"We believe the ongoing debate regarding the workweek system is based on a distorted narrative and an attempt to use Samsung's third-quarter earnings as an excuse. While there may be limitations due to the cap on working hours, the more fundamental issue behind Samsung's situation is its decision not to prioritize HBM," Oh added.