Only 10% of Foreign Companies Said Yes to 5 Day Working Schedule

More than half of the multinational companies operating in Korea think that labor conditions should be modified with the introduction of “5 work days a week system.” They cited paid holidays as the first one to be modified.

In a poll conducted on August 7th by the Federation of Korean Industries (FKI), 48.7% of the 222 multinational manufacturers owned by foreigners responded that they would condition the introduction of the new system on the overall modification of the labor system.

In the meanwhile, 40.7% of the respondents opposed the new working day schedule, citing ‘it’s too early to implement’ (28.7%) and ‘All-out opposition to the new system itself due to the possible negative effects in management. On the other hand, only 10.6% are positive about the introduction.

Along with these, 87.0% worry that the new working day schedule may increase the burden on their payroll. In terms of efficiency, 81.7% predict that it will decrease or will stay even.

As for the appropriate measures to adjust the workers’ salaries under the new schedule, 33.8% cited the introduction of the annual salary and adjustment of wages in accordance with productivity.

Coming next are opinions regarding the pay for the 4 hours to be shortened. 23.8% proposed that the pay for the 4 hours be intact and some of the pay for holidays be compensated in pensions. On the contrary, 23.4% said they would cut the pay for the 4 hours to be shortened. 7.1%, however, do not want any pay cut for the 4 hours.

In the meanwhile, Korean Employers Federation (KEF) released on August 7th a report on matters regarding the shortening of working hours and the preservation of the current salary system. In the report, the KEF predicted that if the Ministry of Labor’s proposal was to be enforced, corporations would have to pay 20% more. The MOL’s proposal does not presuppose any pay cut even after the new working schedule is introduced.

The report argued that just shortening 4 working hours would increase the payroll by 13.64%. If the payments made for the paid holidays are counted in, an average of 20% will have to be paid more. In detail, the payments preservation will give 6.0% hike to male workers and 9.3% to female employees (including the maternity leave). Thus, male workers will receive 19.64% more and female workers 22.94%.

The report concluded, “MOL’s proposal is not acceptable by the employers since it will just shorten the working hours without any modification to the current payroll system.”

Yeon-Su Shin Joong-Hyun Park ysshin@donga.com sanjuck@donga.com