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Samsung gets serious about fighting overwork

Conglomerate to broaden flextime options in face of South Korea overtime cap

Some Samsung factory workers would have their hours adjusted so as not to exceed the new national 52-hour week -- when averaged out over three-month periods.

SEOUL -- Samsung Electronics will let workers set their own schedules as long as they meet monthly minimums on hours, seeking both to improve the work environment and comply with incoming pro-labor laws.

The South Korean semiconductor and smartphone giant will put the policy into effect from July, to coincide with the legal changes. Office workers and developers will be able to work whatever hours they like so long as the monthly tally equates to an average of 40 hours per week, the company said on May 29. For instance, an employee tackling a major project who worked 60 hours the first two weeks of the month could then work just 20 hours in weeks three and four.

South Korea's national workweek will shrink to 52 hours including overtime, down from 68. President Moon Jae-in's administration has taken a labor-first approach to the economy and promised to put the screws to chaebol, or the family-run business empires that dominate the South Korean economy.

South Koreans logged the second-most work hours of any member of the Organization for Economic Cooperation and Development in 2016, according to the government in Seoul. But some in the business world worry that the law could undermine the country's ability to compete.

Samsung's employees can already work any hours they like between 6 a.m. and 6 p.m., but only under certain conditions, including a daily minimum of four hours and a weekly minimum of 40. Overtime has become the norm under this system.

The group's reform package will offer different rules for different lines of work. Researchers, for instance, may be allowed to determine their own hours. For factory workers turning out highly cyclical products, such as air conditioners, the company plans to follow the 52-hour limit by averaging out the hours worked over three-month periods.

Samsung is the most competitive company in South Korea, with the average employee lasting 11 years as of December. Many young people bow out after just a few years under intense pressure for results. Reforms in 2009 and 2012 apparently did little to improve the corporate culture. By contrast, workers at Hyundai Motor -- another sprawling conglomerate -- last nearly 19 years on average, and fewer quit.

But this time, Samsung's plan is being greeted with more optimism. "I was told firmly by a superior that working more than 52 hours a week was 'unacceptable.' The company is serious," said one Samsung worker.

Managers found to have run afoul of labor laws can face fines as high as 10 million won ($9,250) or up to two years in prison. Most conglomerates naturally want to avoid coming under investigation at all. On top of overhauling work hours, Samsung appears to be considering changing how it calculates overtime pay.

The labor law taking effect July 1 targets businesses with 300 or more employees and will affect 14% of all South Korean workers. Under the new system, only 12 hours of overtime will be allowed per week, on top of 40 regular hours, for a total of 52. Assuming a four-week month, that amounts to 48 hours of overtime per month, down from the current 112.

By comparison, a work-reform package going through Japan's parliament would cap monthly overtime at 45 hours, but allow roughly twice that under special circumstances.

South Korea's big business groups scrambled to pull back on working hours when new laws passed in February. LG Electronics in March gave office workers 40-hour weeks on a trial basis, letting them work anywhere from four to 12 hours per day as long as they met the weekly target. SK Hynix has workers and higher-ups come up with a solution when an employee's week appears headed for more than 52 hours.

Some companies have even begun shortening the workweek. Department store operator Shinsegae has compressed the week to 35 hours from 40. Work-life balance has reportedly improved, with at least 200 employees using the company fitness club each day, up from about 150.

The Moon administration has said it expects as many as 178,000 workers to be hired as a result of the new law.

But those in the business world are cooler to the idea. It will lead to "an increase in part-time workers," grumbled an executive at a logistics company.

Companies' increased hiring due to the shorter work hours "will put pressure on profits," said Kim Tae-gi, an economics professor at Dankook University. It may even "spur businesses with a diminished operating capacity to move abroad," Kim said.

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