This Year, Office Workers' Average Summer Vacation is 3.8 Days... Companies Say "Will Reduce Vacation Pay"

KCCI Surveys 793 Companies on '2020 Summer Vacation Status'
76% of Responding Companies Say "Recent Economic Conditions Have Worsened Compared to Last Year"

[Asia Economy Reporter Kim Ji-hee] This year, domestic companies are expected to provide an average summer vacation of 3.8 days, similar to last year. However, the proportion of companies planning to provide summer vacation allowances has decreased compared to last year due to cost-cutting measures, while the proportion of companies intending to implement the annual leave usage promotion system has increased.

On the 12th, the Korea Employers Federation conducted a survey on the '2020 Summer Vacation Status' targeting 793 companies nationwide (with 5 or more employees, based on responding companies). The average summer vacation period this year was recorded at 3.8 days, almost the same level as last year's 3.7 days. 91.9% of the responding companies said they would provide summer vacation this year.

By company size, 58% of companies with 300 or more employees responded that their vacation period would be '5 days or more,' the highest proportion, while 51.2% of companies with fewer than 300 employees responded with '3 days.' Accordingly, the average summer vacation period was 4.5 days for companies with 300 or more employees and 3.6 days for those with fewer than 300 employees.

Summer Vacation Allowance Payment Plans by Company Size (Source: Korea Employers Federation)

While the average summer vacation period slightly increased, the proportion of companies planning to provide summer vacation allowances decreased compared to last year. Companies planning to provide vacation allowances this year accounted for 48.4% of all respondents, down 6.1 percentage points from 54.5% the previous year. In particular, only 46.6% of companies with fewer than 300 employees said they plan to provide summer vacation allowances this year.

Additionally, 62.7% of responding companies said they plan to implement the 'Annual Leave Usage Promotion System (Article 61 of the Labor Standards Act)' this year. This is a 10 percentage point increase from 52.7% of companies that implemented the system last year. The main reason cited for implementing the system this year was 'cost reduction such as annual leave allowances' (47.1%). This was followed by 'to guarantee workers' right to rest' (39.2%) and 'system implemented as a customary practice regardless of recent business conditions' (13.7%).

Regarding the summer vacation period, 72% of manufacturing companies responded that they conduct vacations 'intensively over a short period (about one week),' while 69.3% of non-manufacturing companies said they conduct vacations 'over a relatively wide period (1 to 2 months).'

Evaluation of Recent Economic Conditions by Company Size (Source: Korea Employers Federation)

Furthermore, when asked about the recent economic situation, more than 7 out of 10 companies responded that it has 'worsened compared to last year.' 29.1% of responding companies said it has 'significantly worsened,' and 46.9% said it has 'worsened,' totaling 76% of companies that viewed the business conditions as deteriorated compared to last year. Only 2.1% of companies believed that the business situation had improved compared to last year.