"Additional Labor Costs Alone 1.5 Billion Won Annually... Only Sighs of Despair"

[Report] Visiting Small and Medium Enterprises with Fewer Than 300 Employees Ahead of Next Year's '52-Hour Workweek'
Labor-Management Negotiations Ongoing on Shift Changes... Employees Concerned About Reduced Pay
Concerns Over Departure of Foreign Workers Handling Night Shifts "Urgent Need for Legislative Revisions Reflecting Reality"

Ahead of the implementation of the 52-hour workweek system, voices from small and medium-sized enterprises are calling for prior improvements to the system that take into account on-site conditions and realities. An employee is working at a semiconductor parts manufacturing factory in Siheung, Gyeonggi. Photo by Kim Heeyoon

[Asia Economy Reporters Daeseop Kim, Heeyoon Kim] Dongwon Parts, a semiconductor parts manufacturing company in Siheung, Gyeonggi Province, is in the midst of labor-management negotiations ahead of the implementation of the 52-hour workweek system. The company has a total of 220 employees, of whom about 150, or 70%, are production workers. Considering the current workload, the work schedule must change from the existing two shifts to three shifts starting January next year. Since the company has fewer than 300 employees, the grace period will end by the end of the year, and it must comply with the 52-hour workweek system from next year. Changing to a three-shift system will require the addition of about 30 workers. Simulations estimate an additional annual labor cost of approximately 1.5 billion KRW. It is also not easy to recruit skilled workers specialized in customized parts manufacturing. Many employees, who had been receiving higher pay through night and overtime allowances, are not readily welcoming the application of the 52-hour workweek system.

Jodeokhyung Cho, CEO of Dongwon Parts, expressed concern, saying, "The 52-hour workweek system should be applied for changes in the labor environment, but the preparation period is insufficient." He added, "We are seeking a consensus through labor-management negotiations ahead of the introduction of the 52-hour workweek system. We plan to switch from two shifts to three shifts, but it is frustrating that employees whose salaries will decrease are dissatisfied and that recruiting specialized personnel is difficult."

With the grace period for workplaces with 50 to fewer than 300 regular employees, which was granted for the 52-hour workweek system, ending at the end of December this year, concerns are growing in small and medium-sized enterprises. This is especially so amid the unstable domestic and international economic environment caused by the COVID-19 pandemic and economic downturn, piling up numerous challenges.

Automotive parts manufacturer Company A is also facing difficulties preparing for the introduction of the 52-hour workweek system. There is growing concern that foreign workers, who had been taking on night and overtime work to meet delivery volumes, may leave for other places. The workers at this company earned an average monthly salary of over 3 million KRW through overtime work. However, if working hours are limited, their pay will inevitably decrease.

Lee Jeongsu, CEO of the company (pseudonym), said, "Foreign workers spend a lot of money locally for visa issuance and other processes to work at Korean companies, so their goal is to earn as much money as possible during their stay." He added, "If they are told to work only 52 hours a week, there is a risk that they will leave for other places, such as rural areas, where they receive extra pay." The CEO also mentioned that the company is relocating some domestic manufacturing volume to its Vietnam factory for various reasons, including the implementation of the 52-hour workweek system.

The small and medium-sized business community is voicing that to ensure the smooth landing of the 52-hour workweek system in workplaces and minimize side effects, institutional improvements that consider on-site conditions and realities must precede. They are urging legislative improvements at the National Assembly level, such as extending the unit period of the flexible working hours system. Choomungap, head of the Economic Policy Department at the Korea Federation of SMEs, emphasized, "Legislative improvements must be made within this year to prepare for the new economic environment after the COVID-19 crisis ends."

This content was produced with the assistance of AI translation services.