'White-collar exemptions' urged for flexible work hours

By Choi Sung-jin

To reduce Korea’s notoriously long working hours, the nation needs to consider implementing “white-collar exemptions,” as they do in the United States, a think tank said Friday.

Korea introduced a flexible work system in 1997 with names such as “elastic work hours,” “selective work hours” and “discretionary work hours,” but their effectiveness has remained weak, as seen by low utilization ratios ranging between 3.5 and 6.9 percent, the Korea Economic Research Institute (KERI) said in a report.

“There have been discussions recently on improving flexible work hours but, in the long run, the nation needs to introduce U.S.-style white-collar exemptions through enacting related laws to streamline flexible work hours for professional office workers in a unified and comprehensive manner,” the report said.

The U.S. introduced the system in 1938, exempting while-collar workers who earn high wages and perform professional work from work-hour regulations and gave them performance-based pay, effectively doing away with minimum wages and overtime pay.

“To raise the utilization ratio of discretionary work hours, Korea needs to benchmark the Japanese system,” the report said. KERI is the think tank affiliated with the Federation of Korean Industries, a lobby group for family-controlled conglomerates.

Korea applies the system to people in a limited range of professional work, including research and development, reporting and making broadcast programs and designing.

The Japanese version of white-collar exemptions, however, includes a far wider range of workers, such as those who are in planning, surveying and drafting jobs, and allows employers to apply the system to workers who can best decide how to perform their jobs.

Those who get their work done quickly could come in late or go home early, boosting their productivity under the system. “But opponents of the system likened the merit-based pay system for white-collar workers to a ‘zero overtime payment system’ -- workers will be forced to put in longer hours without due compensation,” the Japan Times reported.

The KERI report said: “Korea’s net work hours are among the longest of the members of the Organization for Economic Cooperation and Development (OECD), and the nation needs to make efforts to reduce them.”