If Wage Compensation Is Not Provided Under the Flexible Working Hours System, a Fine of 3 Million Won Will Be Imposed

Deliberation and Resolution of the Cabinet Meeting on the Amendment of the Enforcement Decrees of the Labor Standards Act and the Skilled Technology Promotion Act
Even with 6-Month Flexible Working Hours, 11-Hour Continuous Rest Is Not Guaranteed During Disaster Recovery

Minister Lee Jae-gap of the Ministry of Employment and Labor. / Photo by Moon Ho-nam munonam@

[Sejong=Asia Economy Reporter Moon Chaeseok] On the 23rd, the government announced that it will impose a fine of up to 3 million KRW if employers who introduce a 3- to 6-month flexible working hours system fail to report wage compensation plans. The flexible working hours system adjusts the working hours by increasing hours in weeks with heavy workloads and decreasing hours in weeks with lighter workloads within a set period, keeping the average within the legal limit.

The Ministry of Employment and Labor announced that at the Cabinet meeting held that day, it reviewed and approved two ministry-related legislative amendments, including the 'Enforcement Decree of the Labor Standards Act' and the 'Enforcement Decree of the Skilled Technology Promotion Act,' which contain these provisions.

First, starting from the 6th of next month, companies with 50 or more employees introducing a 3- to 6-month flexible working hours system must report their wage compensation plans to the Ministry of Employment and Labor, or face fines ranging from 800,000 KRW to 3 million KRW. For companies with 5 to fewer than 50 employees, this will apply from July 1. The fines increase with repeated violations: 800,000 KRW for the first violation, 1.5 million KRW for the second, and 3 million KRW for the third. According to the amended Labor Standards Act effective from December 9 last year, employers must submit wage compensation plans that adjust or newly establish wage items and pay additional wages to ensure that the existing wage level does not decrease.

However, if the plan is prepared through a written agreement with the employee representative, the reporting obligation is exempted. Here, the employee representative refers to a labor union representing the majority of employees (usually the chairperson) or a representative of the majority as defined under the Labor Standards Act.

Employers must also reach a written agreement with the employee representative on the employees involved, the unit period, weekly working hours, and the validity period of the written agreement. Among these, the 'validity period of the written agreement' is newly added in this enforcement decree. Employers and employee representatives must set weekly working hours in advance and notify employees of daily working hours at least two weeks before the start of the relevant week.

Under the amended Labor Standards Act, when introducing a 3- to 6-month flexible working hours system or a discretionary working hours system with a settlement period exceeding one month, continuous rest of at least 11 hours between working days must be provided. However, exceptions where continuous rest is not required have been newly specified. Specifically, these include ▲prevention and handling of disasters and accidents ▲protection of human life and safety ▲and other equivalent reasons.

Additionally, under the 'Skilled Technology Promotion Act,' the disciplinary criteria for 'Korea Masters'?those who have worked in a single field for more than 15 years?who violate the duty to maintain dignity have been detailed. Going forward, ▲if the violation is serious or intentional, the title will be 'revoked' ▲if the violation is serious or due to gross negligence, 'selection cancellation or suspension of continuous service incentive payments for 3 years' ▲if the violation is minor or due to gross negligence, 'suspension of continuous service incentive payments for more than 1 year but less than 3 years' ▲if the violation is minor or due to simple negligence, 'suspension of continuous service incentive payments for up to 1 year' will be applied. Currently, the title is uniformly revoked upon violation.

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