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Legal Update: New Labor Standards Act cuts mandatory work hours

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On February 28, 2018, the amended Labor Standards Act (LSA) passed the National Assembly, setting the maximum hours of work per week at 52. The hours are 40 regular hours and a maximum of 12 overtime hours, spanning a seven-day period. The LSA-mandated shorter hours will be gradually phased in depending on the size of the company (see attached PDF file).


Previous Ministry of Employment and Labor regulations set permissible weekly work hours at 68 (40 regular hours and up to 12 overtime hours spread over five days, and 16 additional hours of weekend work). The new law negates that interpretation and makes any hours over 40 count toward overtime.


The Assembly took up the long-discussed law after several appellate courts rendered precedent-challenging rulings and the Supreme Court held a public hearing to review a related case, one filed by street cleaners against their employer (The City of Sungnam). The workers claimed unpaid overtime for work performed on holidays. The Supreme Court’s decision will be announced in April or May of this year.


Under the amended LSA if an employer permits employees to work over holidays after having already clocked 40 hours in one standard seven-day week, the employer is required to pay standard holiday allowances (time and a half or 150% of ordinary wages) for the first 8 hours of overtime and double time (or 200% of ordinary wages) for holiday work exceeding 48 hours in the same seven-day period.


While the Minimum Wage Committee voted to raise the minimum wage by 16.4% in 2018, it is expected that the shortened work hours stipulated in the new LSA will have a greater impact on enterprises and society.


In the meantime, companies are expected to adopt flexible work hours (as prescribed by the rules of employment, including other rules equivalent thereto) and extend work hours in excess of 8 hours in a particular day or 40 hours in a particular week when employers come to a written agreement with recognized labor representatives. In addition, under the new LSA, in some special cases (e.g., employees engaged in land, sea or air transport or in the medical or sanitation fields) overtime work hours can be extended beyond 12 hours if certain conditions are met and labor representatives agree.