Recent Court Rulings and Legislation Regarding Off-Day Work Allowances and Limitations On Overtime Work
K.Y. Kim, Kim & Chang, Seoul
An employer has to pay overtime work allowances in addition to off-day work allowances to employees that work during the weekend, the Daegu District Court held on September 4, 2013. The court reasoned that the legislative intent requiring employers to pay additional wages for overtime work and off-day work was meant to discourage the employer from imposing extra working hours upon its employees. Because working on weekends constitutes both overtime work and off-day work, the Court held that the employer must pay both allowances in return for the employee's work. This ruling is noteworthy because it conflicts with the authoritative interpretation of the Ministry of Employment and Labor (the "MOEL"), which excluded off-day work hours from the scope of overtime work (under the MOEL interpretation, only overtime work during the weekdays will be counted towards the 12-hour limit under the Korean Labor Standards Act (the "LSA")).
The current LSA requires that an employee shall not work more than eight hours per day and 40 hours per week, while overtime work cannot exceed 12 hours per week. Thus, the maximum working hours for any given week cannot exceed 52 hours under the LSA. However, employers were able to require their employees to work for a maximum of 68 hours per week based on the authoritative interpretation of the MOEL which excluded off-day (i.e., Saturday and Sunday) working hours (a maximum of eight hours per day) from the 12-hour overtime work limit and thereby allowed employers to require their workers to work an additional 16 hours per week.
In line with the above court ruling, an amendment to the LSA, which will include days off work in the scope of overtime, was submitted to the National Assembly's current regular session. The proposed amendment defines 'one week' as '7 days including days off' so that work on days-off is counted towards the 12-hour overtime work hour limit. Therefore, the amended LSA will limit the maximum working hours for a given week, including weekends, to 52 hours. If adopted, the proposed amendment to the LSA will take effect on January 1, 2016 and will initially apply to governmental offices and larger workplaces with 300 or more employees. Later, its application will expand to smaller workplaces.
Based on the above court ruling and the proposed legislation, companies will no longer be able to require their employees to work more than 52 hours per week and off-day work will become more costly because companies will have to pay overtime work allowances in addition to off-day work allowances.
Substitute Holiday System Introduced
K.Y. Kim, Kim & Chang, Seoul
If any of the Lunar New Year holidays (Sullal: December 31, January 1 and 2 of the lunar calendar) or the Harvest Festival holidays (Chuseok: August 14, 15 and 16 of the lunar calendar) fall on a Sunday, civil servants will have an extra day off on the next day of the end of the Sullal and Chuseok, pursuant to an amendment to the Regulation Regarding Government Office's Holidays (the "Amended Regulation"), which will came into effect on November 5, 2013. In addition, if Children's Day (May 5) falls on Saturday or Sunday, civil servants will have an extra day off on the following Monday.
While the Amended Regulation will apply only to government offices, it is expected to affect many of companies in the private sector due to their rules of employment and collective bargaining agreements, which generally include provisions indicating that "the company will provide employees with paid holidays as prescribed in the 'Regulation Regarding Government Office's Holidays.'" As a result of the Amended Regulation, there will be eleven additional holidays over the next ten years (i.e., additional 1.1 holidays per year on average).