By Yoon Ja-young
Businesses are hurrying to come up with plans to deal with the reduction in working hours that will take place in two months. The reduction is expected to lead to major conflicts with unions since workers don't want their wages cut.
The country's statutory maximum working hours will be shortened to 52 a week from the current 68 in July, to help workers achieve a better balance between work and life. Koreans work 2,069 hours per year, which is much more than the average 1,764 hours for members of the Organization for Economic Cooperation and Development (OECD). Other developed countries have been reducing working hours in the hopes that it will prompt more consumption and economic growth.
Though it will only be applied to big companies first, to cushion small- and medium-sized enterprises (SMEs) from possible side effects, employers fear that it will dent corporate competitiveness. They are also expected to face demands by workers that their pay remain the same despite the fewer working hours.
According to local media, the Federation of Korean Trade Unions (FKTU) sent guidelines to its branches to obtain compensation for diverse allowances expected to be cut. The Korean Confederation of Trade Unions (KCTU) also advised its branches to demand the "52 hours workweek without a wage cut" in negotiations with management.
While the administration is pushing for fewer working hours to benefit workers, they are in a dilemma as it means the latter could face a pay cut. According to the National Assembly Budget Office, reduced working hours at businesses employing more than 300 will lead to an average 417,000 won decrease in monthly salary. According to the Korea Labor Institute, the average monthly wage will drop by 13.1 percent in manufacturing, and by 10.5 percent in services following the shorter working hours.
Shinsegae Group has already reduced working hours to improve the working conditions of its employees, but it faces criticism from the KCTU that low-waged workers who are paid hourly will suffer a fall in wages. It demanded that the group should raise the hourly wage since workers will have to work more intensively.
Facing such pressure from unions, businesses claim the government should provide them with supplementary measures. Korea Employers Federation stressed flexible work hours to meet deadlines. "Businesses need to improve flexible working systems, but these were not included on the agenda," it noted. "When extra work becomes inevitable due to special and emergency conditions, businesses should be allowed to do this after getting approval from the labor ministry."
SMEs are also likely to suffer labor shortages if they cut wages.
The ministry said that it is preparing plans to lessen the burden. "We are preparing plans to lessen the burden on both the workers and the employers for stabilization of the shorter working hours, including measures to solve labor shortage problems," it noted in a media release. It added that the supplementary measures will be announced within this month.
Businesses are hurrying to come up with plans to deal with the reduction in working hours that will take place in two months. The reduction is expected to lead to major conflicts with unions since workers don't want their wages cut.
The country's statutory maximum working hours will be shortened to 52 a week from the current 68 in July, to help workers achieve a better balance between work and life. Koreans work 2,069 hours per year, which is much more than the average 1,764 hours for members of the Organization for Economic Cooperation and Development (OECD). Other developed countries have been reducing working hours in the hopes that it will prompt more consumption and economic growth.
Though it will only be applied to big companies first, to cushion small- and medium-sized enterprises (SMEs) from possible side effects, employers fear that it will dent corporate competitiveness. They are also expected to face demands by workers that their pay remain the same despite the fewer working hours.
According to local media, the Federation of Korean Trade Unions (FKTU) sent guidelines to its branches to obtain compensation for diverse allowances expected to be cut. The Korean Confederation of Trade Unions (KCTU) also advised its branches to demand the "52 hours workweek without a wage cut" in negotiations with management.
While the administration is pushing for fewer working hours to benefit workers, they are in a dilemma as it means the latter could face a pay cut. According to the National Assembly Budget Office, reduced working hours at businesses employing more than 300 will lead to an average 417,000 won decrease in monthly salary. According to the Korea Labor Institute, the average monthly wage will drop by 13.1 percent in manufacturing, and by 10.5 percent in services following the shorter working hours.
Shinsegae Group has already reduced working hours to improve the working conditions of its employees, but it faces criticism from the KCTU that low-waged workers who are paid hourly will suffer a fall in wages. It demanded that the group should raise the hourly wage since workers will have to work more intensively.
Facing such pressure from unions, businesses claim the government should provide them with supplementary measures. Korea Employers Federation stressed flexible work hours to meet deadlines. "Businesses need to improve flexible working systems, but these were not included on the agenda," it noted. "When extra work becomes inevitable due to special and emergency conditions, businesses should be allowed to do this after getting approval from the labor ministry."
SMEs are also likely to suffer labor shortages if they cut wages.
The ministry said that it is preparing plans to lessen the burden. "We are preparing plans to lessen the burden on both the workers and the employers for stabilization of the shorter working hours, including measures to solve labor shortage problems," it noted in a media release. It added that the supplementary measures will be announced within this month.
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