"Struggling to Survive with 8-Hour Additional Overtime System"... Over 100 SME Workers Complain at the National Assembly

‘8-Hour Additional Overtime Sunset Abolition Rally’ to Be Held on the 8th
On the 7th, the Environment and Labor Committee Requested the People Power Party to Submit a 2-Year Extension Bill
Attention on Opposition Party's Acceptance Through Negotiations Including the Yellow Envelope Act
"Labor Shortage in Small Businesses with Fewer Than 30 Employees Will Grow Uncontrollably"

Lee Young, Minister of SMEs and Startups, is giving a greeting speech at the Labor Regulation Improvement Grand Debate held at the Korea Federation of SMEs in Yeouido, Yeongdeungpo-gu, Seoul on the 5th. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kwak Min-jae] Small and medium-sized business owners, struggling with management difficulties and labor shortages, took collective action by visiting the National Assembly in person to urgently request the passage of a bill extending the sunset clause on the 8-hour additional overtime work system.

The small and medium business community is on high alert regarding this issue. At the Environment and Labor Committee meeting held on the 7th, the ruling party, the People Power Party, requested the bill be tabled, stating that at least a two-year extension is necessary, drawing attention to whether the opposition parties will accept this. The key point is whether a consensus can be reached between the ruling and opposition parties through negotiations involving the “Yellow Envelope Act (Amendments to Articles 2 and 3 of the Labor Union Act),” which was unilaterally proposed by the Democratic Party and the Justice Party.

On the 8th, about 100 members from 69 organizations representing small and medium enterprises, small business owners, and self-employed individuals, including the Korea Federation of SMEs and the Korea Federation of Micro Enterprises, held a “Rally to Urge the Abolition of the Sunset Clause on the 8-Hour Additional Overtime Work System” in front of the National Assembly main building in Yeouido, Seoul. The 8-hour additional overtime work system is a temporary measure allowing workplaces with fewer than 30 employees to work an extra 8 hours per week, implemented since July last year to alleviate the burden of the 52-hour workweek system. This system is set to expire on December 31 of this year.

Participants condemned the 52-hour workweek system, which was uniformly enforced without considering on-site conditions, arguing that it exacerbates management difficulties and labor shortages for small and medium enterprises and small business owners. They also claimed that many workers, in order to sustain their livelihoods, take on second jobs, and that the implementation of the 52-hour workweek has in many cases lowered their quality of life, leading to calls for system improvements. They emphasized that the 8-hour additional overtime work system must be maintained so that businesses can continue operating and workers can maintain their livelihoods smoothly.

Kim Chang-woong, president of the Korea Construction Machinery Maintenance Association, said, “The construction maintenance industry, mostly composed of micro-enterprises, is struggling to maintain the status quo due to recent sharp increases in minimum wages and raw material prices, and is barely holding on thanks to the 8-hour additional overtime work system.” He added, “Given the industry’s harsh working conditions and already severe labor shortages, if the 8-hour additional overtime work system disappears, the management situation will worsen, but there are no alternative measures, so the outlook is bleak.”

In fact, small and medium enterprises with fewer than 30 employees show a high dependence on the 8-hour additional overtime work system. According to a survey report conducted by the Korea Federation of SMEs in October targeting 400 manufacturing companies with fewer than 30 employees, 91% of respondents said they depend on the 8-hour additional overtime work system. Furthermore, 75.5% responded that they have no countermeasures if the sunset clause takes effect.

Regarding anticipated problems when the additional overtime work system expires, 66% of the responding companies said, “Even if work arises, we cannot work more, leading to decreased operating profits.” Next, 64.2% cited “Loss of existing workers and worsening labor shortages due to reduced overtime options,” and 47.2% mentioned “Contract termination and compensation claims due to failure to meet delivery deadlines.”

Yang Ok-seok, head of the Human Resources Policy Office at the Korea Federation of SMEs, emphasized, “Small and medium enterprises with fewer than 30 employees, lacking administrative capacity and financial resources, are insufficient to shorten working hours through additional hiring or flexible work arrangements and are highly dependent on the 8-hour additional overtime work system.” He added, “Since small and medium enterprises are already experiencing the worst labor shortages, if the additional overtime work system disappears at the end of this year, the labor gap will grow uncontrollably, so abolishing the sunset clause is desirable.”