‘Free overtime’ to be abolished while skipping night and holiday premiums?···A ‘double standard’ toward high-earning researchers under scrutiny - 경향신문
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President Lee Jae Myung joins hands with SK Group Chairman Chey Tae-won (left) and Samsung Electronics Chairman Lee Jae-yong at the ‘Republic of Korea Great Leap Forward Three Mega-Projects National Briefing’ held at the Blue House on June 29. Blue House Photo Press Corps
The government’s plan to introduce a ‘white-collar exemption (exemption)’ in ‘mega special zones’ such as the semiconductor cluster in the southwest is drawing criticism as a ‘twofold rollback’ that simultaneously pushes working-time flexibility and reductions in corporate labor costs. The government is considering not only scrapping the 52-hour weekly cap for high-earning research and development workers but also exempting employers from paying the statutory premium rates for overtime, night, and holiday work.
According to reporting by the Kyunghyang Shinmun on the 9th, the government’s Mega Special Zone Special Act (tentative title) includes applying the white-collar exemption to managers and research and development workers in the top 3% by income at companies within the mega special zones. If a worker individually agrees, the 52-hour weekly cap and rest and holiday provisions would not apply, and a separate general allowance would be paid instead of overtime, night, and holiday pay premiums.
The ‘top 3% by income’ corresponds to an annual salary of at least 140 million won based on 2025 wage percentile data from the National Tax Service, or at least 130 million won based on the Survey on Labor Conditions by Employment Type. Considering that last year the average employee pay at Samsung Electronics and SK hynix was 158 million won and 185 million won, respectively, many semiconductor research and development workers in the mega special zones are likely to fall under the government’s deregulation. If the relaxation becomes reality, they would not be able to receive statutory premium pay even after overnight shifts.
The government is also considering extending the settlement period for the selective working hours system for companies in the mega special zones from the current one month (three months for research and development work) to six months. In that case, arithmetically, “80-hour weeks for 16 consecutive weeks” would become possible. If this special exception and the white-collar exemption are introduced together, companies would gain not only greater flexibility in working hours but also the effect of reducing the labor cost burden for extra work.
Kim Jong-jin, head of the Laboring Citizens Research Institute, said, “If the purpose is to ensure continuity in research and development, concentrated work is possible through methods such as the selective working hours system or recognition of special extended work,” adding, “Adding a white-collar exemption to remove premium pay can only be seen as an attempt to reduce companies’ extra labor costs.”
If a fixed general allowance is paid irrespective of actual overtime hours in place of premium pay, the structure would resemble the all-inclusive wage system. If the general allowance is lower than the current statutory premium pay, workers in the mega special zones could end up working longer for less compensation than they receive now. This also clashes with the Lee Jae Myung administration’s agenda that pledges shorter working hours and a principled ban on the all-inclusive wage system. On one hand, the administration says it will eliminate ‘free overtime,’ while on the other, it is opening a path for not paying premium pay on the grounds of being an advanced industry.
Examples cited by business circles to justify adopting a white-collar exemption domestically are the United States and Japan. In the United States, where in general there is no upper limit on working hours, the crux of the system is exempting employers from the obligation to pay overtime premiums. Japan also introduced the “highly professional system” in 2019, excluding high-income professionals from working-time and premium-pay rules. However, it requires a resolution by four-fifths or more of a labor-management committee and the worker’s written consent, and it provides a right to withdraw consent, at least 104 days off per year, and an obligation to keep records of working hours. In contrast, the government’s plan known so far requires only individual consent from workers without collective consent procedures such as through labor unions, drawing criticism that its safeguards are weaker than Japan’s.
In Korea, a white-collar exemption has long been a key demand of management and has been pursued whenever conservative governments have rolled out measures to make working hours more flexible. In the Democratic Party, former lawmaker Kim Byung-Kwan in 2019 proposed a bill excluding workers in the top 3% by income from the working-time cap and from overtime and holiday premiums. The current government’s proposal narrows the scope to managers and research and development workers within the special zones, but by excluding even night-work premiums that were guaranteed in that bill, protection of wages is weaker.
There is also criticism that, while companies’ demands have been quantified in concrete numbers, the views of semiconductor workers themselves have not been reflected in the government’s plan. Earlier, the Korea Employers Federation surveyed 468 companies in national advanced strategic technologies on the regulatory exceptions needed in the mega special zones. The government plan reflects to a significant extent companies’ requests for flexibility in research and development workers’ hours. However, it has not been confirmed whether there have been separate procedures to gather opinions from semiconductor research and development workers or labor unions. The government says it will hear labor’s views in the process of fleshing out the bill.
