"Struggling Barely with 8-Hour Additional Overtime System"... Over 100 SME Workers Complain at the National Assembly (Comprehensive)

‘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 Shortages in Small Businesses with Fewer Than 30 Employees Will Grow Uncontrollably”

Members of the Federation of Small and Medium Enterprises, Small Business Owners, and Self-Employed Associations are urging the abolition of the sunset provision on the 8-hour additional overtime work limit in front of the National Assembly Main Building in Yeouido, Seoul, on the 8th.
[Photo by Korea Federation of SMEs]

[Asia Economy Reporter Kwak Min-jae] "Small and medium-sized enterprises (SMEs) and small business owners are all dying. Abolish the 52-hour workweek system that forces workers to take on second jobs and turns business owners into criminals."

SME owners, complaining of management difficulties and labor shortages, took collective action by visiting the National Assembly directly to request the prompt passage of a bill extending the sunset clause on the additional 8-hour overtime work system.

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

The SME sector is highly alert to this issue. On the 7th, during the Environment and Labor Committee meeting, the ruling party, the People Power Party, requested the bill's submission, stating that at least a two-year extension is necessary, drawing attention to whether the opposition party will accept it. 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) independently proposed by the Democratic Party and the Justice Party.

At the scene, People Power Party lawmaker Choi Seung-jae said, "Small business owners and self-employed people from 1.84 million workplaces are struggling with sales declines and closures because they cannot meet delivery deadlines and production schedules. Even if existing workers want to work additional hours, the system turns business owners into criminals," adding, "The National Assembly must listen to the voices from the field and promptly pass the bill to extend the sunset clause on the additional 8-hour overtime work system."

Im E-ja, the ruling party's floor leader on the Environment and Labor Committee, said, "This year, with the 'triple hardship' of high interest rates, high prices, and high exchange rates, the situation is even more difficult than in 2018 when the National Assembly first allowed the additional 8-hour overtime work system," and added, "After consulting with Environment and Labor Committee Chairman Jeon Hae-cheol and others yesterday, we have agreed to discuss the additional 8-hour overtime work system when the extraordinary session of the National Assembly convenes. The People Power Party will do its best to ensure that workers can work without worrying about labor shortages."

Participants condemned the 52-hour workweek system, which was uniformly enforced without considering the actual situation on the ground, saying it exacerbates management difficulties and labor shortages for SMEs and small business owners. They also argued that many workers, forced to take on second jobs to make ends meet, have experienced a decline in quality of life due to the 52-hour workweek system and thus desire improvements to the system. They emphasized that the additional 8-hour overtime work system must be maintained so that businesses can continue operating and workers can sustain their livelihoods smoothly.

Kim Chang-woong, president of the Korea Construction Machinery Maintenance Association, said, "The construction maintenance industry, mostly composed of small businesses, is struggling to maintain the status quo due to recent sharp increases in minimum wages and raw material prices, barely holding on thanks to the additional 8-hour overtime work system," and lamented, "Given the industry's nature, with harsh working conditions and frequent night shifts, labor shortages are already severe. If the additional 8-hour overtime work system disappears, the business situation will worsen, and many will have no choice but to close."

Lee Jong-min, representative of the Self-Employed Solidarity, said, "Many economic experts say that even large corporations are struggling due to the base interest rate hikes. How can small business owners endure under such adverse conditions?" He added, "In this unprecedented situation where there is a shortage of both work and workers, please support the continuation of the additional 8-hour overtime work system for SMEs."

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

Regarding anticipated problems when the additional overtime work system expires, 66% of respondents said, "Even if work arises, we cannot work more, leading to decreased operating profits." Next, 64.2% cited "existing workers leaving due to reduced overtime options, worsening labor shortages," and 47.2% mentioned "breach of delivery deadlines causing contract termination and compensation claims."

Yang Ok-seok, head of the Workforce Policy Office at the Korea Federation of SMEs, emphasized, "SMEs with fewer than 30 employees, lacking administrative capacity and financial resources, cannot reduce working hours through additional hiring or flexible work systems and are highly dependent on the additional 8-hour overtime work system," adding, "Since SMEs are already experiencing the worst labor shortages, if the additional overtime work system disappears at the end of this year, the labor gap will become uncontrollable. Therefore, abolishing the sunset clause is desirable."