"Companies Paying Lunar New Year Bonuses This Year Decrease Compared to Last Year... Lunar New Year Economy Worsens Due to COVID-19"

KCCI '2021 Seol Holiday Closure Survey'
This Year's Annual Operating Profit Increase '43.5%' vs Decrease '40.7%'

[Asia Economy Reporter Ki-min Lee] This year, the number of companies paying bonuses for Seollal (Lunar New Year) has decreased compared to last year. This appears to be due to the worsening Seollal economy caused by the ongoing impact of COVID-19 since last year.

The Korea Employers Federation announced on the 31st that, based on the results of the "2021 Seollal Holiday Status Survey" conducted on 527 companies nationwide with five or more employees, the proportion of companies planning to pay Seollal bonuses this year was 58.1%, down 7.4 percentage points from 65.5% last year.

First, the proportion of companies with 300 or more employees paying Seollal bonuses remained the same as last year at 74.2%, while the proportion of companies with fewer than 300 employees paying Seollal bonuses decreased by 8.9 percentage points from 63.7% last year to 54.8% this year.

This is interpreted as being because companies with 300 or more employees often have Seollal bonuses stipulated in collective agreements, whereas companies with fewer than 300 employees tend to pay bonuses depending on economic conditions. Regarding the level of Seollal bonus payments, 88.2% responded that it was the same as last year, and 10.5% said it was less than last year.

Among the companies surveyed, 53.9% responded that the Seollal economic situation this year has worsened compared to last year. The Korea Employers Federation cited the spread of COVID-19 as the reason for the worsening Seollal economy this year. However, in a survey asking about the annual operating profit outlook for this year, 43.5% responded that it would increase compared to the previous year, while 40.7% said it would decrease, showing similar proportions.

The Federation explained that companies expecting an increase in operating profit likely reflected expectations of economic recovery due to the base effect from last year's slump and the easing of COVID-19 following vaccination.

On the other hand, regarding companies that responded their operating profit would decrease compared to last year, it added that this likely reflects concerns that management difficulties will continue this year due to uncertainty.

This year’s Seollal holiday period includes three official holidays (February 11?13) followed by Sunday (February 14). Among companies implementing Seollal holidays, 83.3% reported taking a four-day holiday, while 9.3% took three days or less, and 7.4% took five days or more.

Companies taking five or more days off most frequently cited "mandatory holiday implementation according to collective agreements and employment rules (47.4%)" as the reason, rather than issues related to workload or costs. Other reasons included "cost reduction such as annual leave pay (31.6%)" and "production adjustment due to lack of workload (13.2%)."

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