Gov’t seeks passage of 4.5-day workweek bill this year despite industry pushback

Members of the Korean Financial Industry Union discuss the introduction of a 4.5-day workweek during a press conference at the union’s situation room in central Seoul, Sept. 8. Yonhap

The government said this week it will introduce legislation this year to pave the way for a 4.5-day workweek, moving forward with a key campaign pledge by President Lee Jae Myung.

The plan is part of the administration’s 123 national policy initiatives and is designed to reduce average working hours and increase flexibility in the labor market.

At a briefing in Sejong City on Wednesday, Cho Won-cheol, the minister of government legislation, said the government would submit the Reduced Working Hours Support Act to the National Assembly before year’s end. The measure would provide tax credits and other incentives to companies that cut employees’ working hours under the new framework. Alongside the bill, officials plan to revise 66 government decrees this year and send an additional 110 legislative proposals to parliament for review.

According to a road map drawn up by the Ministry of Employment and Labor, the reform will be implemented in three stages.

The first step is the passing of the support law and the introduction of pilot programs within the year. In 2026, the government intends to prohibit the widespread use of the comprehensive wage system, which has long been criticized for encouraging excessive working hours by incorporating overtime and holiday pay into monthly salaries. Wider social discussions on extending the 4.5-day week nationwide are expected to start in 2027.

Lee has argued that Korea, which ranks among the OECD’s most overworked nations, must shorten working hours to raise living standards. In 2023, Korean employees logged an average of 1,874 hours — 132 more than the OECD average.

Business groups, however, have voiced strong opposition.

The Korea Employers Federation said that Korea’s hourly labor productivity was $54.60 in 2023, which is only 77.4 percent of the OECD average and significantly lower than the G7 average of $80.60. They warn that shorter working weeks could further weaken competitiveness and deepen economic polarization.

Industry officials added that, given Korea’s heavy reliance on manufacturing, fewer hours are likely to directly result in lower output unless accompanied by labor market reforms.

Some executives also argued that applying the new standard across industries and company sizes would inevitably cause disruption. “If the working week is shortened without easing rigid labor practices, efficiency will fall and costs will rise,” said the head of an auto parts manufacturing plant in Gyeongju, North Gyeongsang Province, who requested anonymity as a small business owner.

Despite skepticism, several major firms have already introduced similar schemes voluntarily. SK Telecom operates a Happy Friday program that allows staff to take every other Friday off if they complete 80 hours over two weeks. Samsung Electronics permits flexible scheduling under its existing selective working hours system.

The government maintains that the measure will ultimately create more jobs, giving smaller companies a relative advantage. Yet mid-sized firms counter that the additional wage costs could outweigh any benefits and hurt global competitiveness.