South Korea to make working hours more flexible and encourage performance-based pay model
Labor Minister Lee Jung-Sik (Yonhap)
At the first press briefing after his inauguration at the Sejong government complex, President Yoon Suk-yeol’s first labor minister, Lee Jung-sik, focused on two issues, the national work week policy of 52 hours and the seniority-based compensation models adopted by the majority. businesses in South Korea.
According to Lee, the government will look at options for companies to calculate overtime on a monthly basis in the future so that some industries can better manage excessive workloads than they do on a weekly basis. Under the new plan, overtime can potentially be extended up to 92 hours a week, but employees will be compensated with days off, according to Lee.
The Moon Jae-in administration had limited the number of working hours to 52, including 40 regular hours and 12 overtime. The government then regulated overtime to be calculated on a weekly basis to enforce the new law.
Yoon, however, during his presidential campaign criticized the 52-hour workweek policy and hinted that he would introduce changes that could allow for a more flexible work schedule.
Whether companies will adopt the new rule, however, will depend on individual negotiations between management and workers, according to the ministry.
Lee explained that changes in the 52-hour work week policy are needed as more and more industries, especially those dealing with information technology and software, require a work schedule. flexible work based on industry demands and the nature of their jobs.
Lee also stressed that the country should move away from seniority-based compensation models, in which employees naturally see pay increases as they progress in their careers.
Lee argued that more companies should be able to introduce performance-based compensation models so that management can better manage rising wages for older workers, which the country plans to expand further across the country. future due to the rapid aging of the population.
Lee added that seniority-based pay systems don’t match the high turnover in today’s job market.
In South Korea, approximately 70% of companies with more than 1,000 workers currently adopt seniority-based compensation models, while 55.5% of companies with more than 100 employees use time-based compensation models. seniority.
Meanwhile, Lee stressed that under no circumstances would the government introduce policies that would increase layoffs.
By Shim Woo-hyun ([email protected])