Major Domestic Companies Operate Vacation Systems Exceeding Legal Standards

90.3% of Companies Compensate Unused Annual Leave
Many Also Provide Separate Summer Vacation in Addition to Annual Leave

A survey found that a significant number of major domestic companies compensate unused annual leave with money or provide summer vacation separately from annual leave.

On the 26th, the Korea Employers Federation (KEF) released the results of a survey on the vacation systems of the top 50 companies by sales. The survey targeted the top 50 companies by sales excluding public enterprises, with 31 companies responding.

According to the survey results, KEF stated, “While our Labor Standards Act already guarantees a vacation system comparable to that of advanced countries, most major companies operate vacation systems that are significantly higher than the legal standards.”

Among the responding companies, 90.3% compensate for unused annual leave. 54.8% have introduced the ‘Annual Leave Usage Promotion System’ under the Labor Standards Act and compensate for unused annual leave even though they are not obligated to do so. All companies (9.7%) that do not compensate for unused annual leave have adopted the ‘Annual Leave Usage Promotion System.’

Office workers commuting at Gwanghwamun Intersection Photo by Yonhap News

The usage rate of annual leave among companies showed a significant difference depending on whether unused annual leave was compensated monetarily. The annual leave usage rate of companies that compensate for unused annual leave was 64.7%, whereas companies that do not compensate had a usage rate 17 percentage points higher at 81.7%. Regardless of compensation, the average annual leave usage rate among all responding companies was 66.5%.

Additionally, 51.6% of companies provide summer vacation separately from annual leave. The average number of summer vacation days granted by these companies was 4.9 days. Notably, 76.5% of non-financial companies were found to provide separate summer vacations. In contrast, only 21.4% of financial companies did so, which can be attributed to the nature of the financial industry that requires continuous operation excluding public holidays.

Companies granting annual leave exceeding the legal limit of 25 days per year accounted for 32.3%. Also, 9.7% provided monthly leave, granting one day off for every full month worked, separate from annual leave. Companies providing paid menstrual leave accounted for 22.6%.

Ha Sang-woo, head of the Economic Research Department at KEF, argued, “Considering analysis results showing that the actual working hours of full-time workers are not significantly different from the OECD (Organisation for Economic Co-operation and Development) average, policy focus should now shift from regulation related to working hours, holidays, and leave to enhancing flexibility for productivity improvement.”

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