South Korea's Shorter Workweek Plan Puts Productivity and Pay to the Test

A 36 hour week with the same pay

South Korea plans to reduce its standard legal workweek from 40 to 36 hours without cutting pay, putting a central pledge of President Lee Jae Myung up against a difficult economic question: can employers deliver the same output with less working time?

As of October 10, 2025, the government aims to submit legislation by the end of the year, including a Reduced Working Hours Support Act offering subsidies and tax incentives to employers adopting shorter schedules. A task force bringing together labor unions, business groups and government agencies is developing a roadmap.

The proposed four and a half day week is part of a wider ambition to bring average working hours below the OECD average by 2030. Korean workers logged about 1,874 hours each in 2023, among the highest totals in the developed world. The longer term goal is a four day week of 32 hours, once the economy can support it.

South Korea completed its shift to a five day week only in 2011, following a decade of phased implementation. The new proposal would continue that restructuring of working time, with changes reaching beyond office schedules to factory shifts, hospital staffing, shop opening hours and household income.

Supporters argue that more rest could reduce burnout, workplace accidents and staff turnover while giving families more time for care and daily life. Business leaders warn that maintaining wages while reducing hours would raise costs unless workers and companies become more productive. The debate turns on whether the reform can improve life outside work while preserving output, services and competitiveness.

Which working hours would change?

The Ministry of Employment and Labor is coordinating with other agencies on the design of the proposal and its effects on paychecks. Preliminary plans have been briefed to the Presidential Committee for State Affairs, but the legal details remain under review.

South Korea's current 52 hour system combines a standard working week of 40 hours with an allowance of 12 hours of overtime. Officials are examining whether a 36 hour standard would change the regular working week, the overtime allowance, or both. That choice matters because it determines when additional work attracts overtime treatment and how much work an employer can schedule.

Vice Minister Kim Min seok told lawmakers that agencies were actively coordinating and studying income effects. Describing the proposal as a work in progress, he said:

Specific details have not been finalized. We are reviewing how a 36 hour standard would affect income and overtime rules.

Wage protection is particularly important for workers paid by the hour. Keeping a salaried employee's monthly paycheck unchanged is one part of the task; preserving the income of someone whose earnings depend on shifts, overtime and mandatory premiums requires rules covering those payments too.

Ministries are studying arrangements for different industries so that factories, hospitals, logistics hubs, public services and businesses serving customers can maintain coverage without pushing employees into involuntary overtime. Other unresolved choices include the size, duration and eligibility rules for subsidies and tax credits, especially for smaller employers.

Officials also need to settle how the weekly rest day allowance and other required premiums would work under a 36 hour framework. Another policy question is whether financial assistance should depend on measurable productivity improvements, training or plans to adopt digital tools.

The arithmetic behind employer concerns

A reduction from 40 to 36 hours removes four hours, or 10 percent, from the standard week. With weekly pay unchanged, the cost of each scheduled hour rises by about 11.1 percent. To produce the same amount in 36 hours that it previously produced in 40, a business would need roughly 11.1 percent more output per hour.

Unit labor cost means the labor expense involved in producing a given amount of goods or services. It rises when a company pays the same wages but produces less. Employers therefore see productivity, rather than the calendar alone, as the central test of the proposal.

In 2023, Korean workers produced about US$54.64 of gross domestic product per hour, compared with roughly US$97.05 in the United States. Germany, France and Spain also recorded higher levels than South Korea. Using the Korean and American figures, output per hour in South Korea was about 56 percent of the American level.

Another analysis estimated annual labor productivity per Korean worker at about US$65,000 in 2023, ranking the country 22nd among 36 OECD economies. That was roughly half the level in Belgium and Iceland, where many employers already operate four day schedules.

The two measures describe productivity from different angles: one looks at output per hour, while the other looks at output per worker over a year. Both feature in the debate because South Korea is seeking to reduce working time while businesses already face high labor expenses and a rigid job market.

Several years of wage growth have outpaced productivity gains, widening the gap between pay and output. Employers fear that maintaining wages while reducing hours could widen it further and squeeze profit margins, particularly in services. Business associations argue that a broad requirement would place the greatest pressure on firms that cannot easily automate tasks or reorganize their work.

How companies could produce more in less time

Hourly labor productivity is generally measured by dividing real output by hours worked. A business can improve it by reducing downtime, automating routine tasks, speeding up decisions or giving employees better equipment and training. The aim is to complete more useful work during each hour.

Capital investment, digital adoption, employee skills, process design and management practices all affect that result. Shorter hours alone cannot guarantee higher efficiency. The strongest evidence from abroad points toward changes in how work is organized as an important part of successful shorter schedules.

Companies can reduce meetings that contribute little, simplify approval procedures, improve task handoffs and use collaboration tools to cut repetitive reporting. Clear goals and better shift handovers can help teams avoid delays. Giving employees working directly on a task more scope to fix bottlenecks can also reduce wasted time.

Food service and childcare illustrate the difficulty in businesses where providing a service depends heavily on staff time. Raising measured output per hour is harder in such settings. Support for technology upgrades and changes to working methods may therefore matter as much as help with payroll costs.

Some business groups favor a flexible approach in which companies adopt shorter weeks after achieving productivity gains internally. Supporters of the reform argue that better rest can itself help performance over time by reducing exhaustion, accidents and the need to replace departing staff.

Managers would still need to redesign staffing and schedules to keep services running without excessive overtime. The practical challenge is to remove avoidable work while protecting the time needed to serve customers, manufacture goods and deliver care.

Workers want time, but public opinion is divided

Surveys of salaried employees show strong interest in shorter working weeks, even when some reduction in pay is part of the tradeoff. Many hope for less stress, more time for learning and family commitments, and a better balance between work and life outside it.

Long hours and a culture of presenteeism have been persistent concerns in offices and factories. Presenteeism, in this context, means placing value on being visibly at work for long periods, rather than simply on completing useful work.

A nationwide poll released in early October 2025 nevertheless found that 63 percent of adults opposed the four and a half day proposal, while 32 percent supported it. Opposition exceeded support in every age group and was especially strong among older respondents, housewives, people working for themselves and blue collar workers.

Supporters of the ruling party were divided, while supporters of opposition parties were overwhelmingly against the plan. The broader public response contrasts with the interest expressed in surveys of salaried workers because different groups face different costs and benefits.

Salaried professionals at large companies may be able to redistribute tasks within their teams. Small shop owners and hourly workers worry about shorter opening hours, lower income or greater pressure to work overtime. Parents welcome the prospect of more time at home, but many say reliable childcare, predictable schedules and fair pay are needed to make that time useful.

Why small employers face greater pressure

Restaurants and convenience stores cannot simply close during their busiest periods without losing sales. Manufacturers working to tight delivery deadlines may have to add shifts, recruit more staff or pay for more overtime. For these employers, a shorter standard week creates an immediate staffing question.

Micro and small businesses face the greatest risk when wages stay unchanged but working hours fall. Unless they improve efficiency, the labor cost of each hour rises. Their options can be more limited than those of larger companies with more staff, investment funds and room to reorganize.

The weekly rest day allowance is a particularly sensitive issue. This mandatory payment dates to the 1950s and was introduced to guarantee a paid day of rest. Small business advocates argue that it is outdated if South Korea moves beyond a five day working pattern.

Song Chi young, head of the Korea Federation of Micro Enterprise, has argued that the government must balance the shorter week with changes to existing obligations on very small employers. He said:

If the government intends to introduce a four and a half day workweek, it must first abolish the weekly rest day allowance.

Small business groups also warn about fully extending the Labor Standards Act to workplaces with fewer than five employees, which have long been exempt from many of its rules. One estimate suggested that a micro business employing four people could face about 42 million won in additional annual labor costs if the rules expanded without offsets.

Recent minimum wage increases add to their concerns. Business groups have called for options such as minimum wages that differ by industry or adjustments every two years to help stabilize payrolls during the transition. They also want targeted tax credits, simpler compliance requirements and support for training and technology, so that shorter schedules do not lead to staff cuts or business closures.

Keeping services open and protecting wages

The government is considering financial support to cushion the transition, especially for smaller firms. A workable package would need to give employers room to experiment while protecting employees from lost wages or the pressure to squeeze the same workload into fewer hours.

Phased schedules by industry and company size could allow employers to test arrangements before wider adoption. Pilots and voluntary adoption periods linked to reporting on output and service quality would help show whether a particular schedule works in practice.

Possible arrangements include rotating shorter Fridays, compressed shifts and alternating days off. Each serves different staffing needs, making the rules on scheduling and peak demand important for retail, hospitality, healthcare, logistics and public services.

Grants and tax credits for digital tools, training and redesigned work processes could help businesses raise output per hour rather than simply add employees. Clear overtime rules, daily rest requirements and predictable schedules would help prevent shorter weeks from turning into longer individual working days.

Childcare, elder care and transport support would also affect whether families can make practical use of the time saved. For small employers, simple compliance templates, advisory support and less paperwork could make assistance easier to access.

Who could miss out on a shorter week?

South Korea's labor market is divided between relatively secure jobs with higher pay and benefits, concentrated in large firms and the public sector, and less secure work in smaller businesses. Many people in non regular jobs or platform roles face lower wages and unstable hours.

A reform adopted quickly by large employers could widen differences in both income and free time. Employees at businesses with more resources could gain shorter schedules first, while those at firms with weaker productivity continue working longer or face pressure on earnings.

Services with low productivity, subcontractors and platform workers would need particular attention. A service business might respond to an hours limit by cutting shifts rather than raising hourly pay, reducing monthly earnings for workers the reform is intended to help.

Targeted subsidies, digital upgrades for small retailers and clinics, and protections for workers in non regular employment could reduce that risk. The aim would be to extend the benefits beyond workplaces already able to afford shorter schedules.

The dates and tests that matter

The government's timetable runs from legislation planned for late 2025 to a national working hours goal in 2030. Local and sector pilots are scheduled to continue through 2027, allowing officials to assess output, service quality and employee wellbeing before deciding how quickly wider changes can proceed.

• 2011: South Korea completed its move to a five day working week after a decade of phased implementation.
• 2023: Average annual working time was about 1,874 hours, while output per hour was about US$54.64.
• Early October 2025: A nationwide poll recorded 63 percent opposition and 32 percent support for the four and a half day plan.
• End of 2025: The government aims to submit legislation establishing a 36 hour standard and a support framework.
• Through 2027: Local and sector pilots are scheduled to test shorter hours and their effects.
• 2030: The government wants average working hours to fall below the OECD average.

The task force bringing together unions, employers and government agencies is expected to outline milestones and the measures agencies will track. Detailed rules are likely to be phased in, with pilot arrangements and industry schedules updated as results become available.

Evaluations will examine productivity, employee wellbeing, customer satisfaction and staff turnover. Publishing those results transparently would help workers and employers judge whether fewer hours are being achieved alongside stable output and reliable services.

What the transition would mean in practice

Employers will watch the treatment of overtime, weekly rest payments and wage protection. Workers will look for predictable schedules and protection from heavier workloads. Small firms will need straightforward paperwork and quick access to assistance, rather than support limited to future tax deductions.

The pace of national adoption will depend on what the pilots show and which industries need tailored rules. A hospital, logistics hub and office have different coverage requirements, even if each is working toward the same reduction in standard hours.

Linking shorter hours to training, investment and better work organization could support a lasting change. Relying mainly on requirements risks uneven results, with some workers gaining time while others face less stable pay and some businesses bearing higher costs. The immediate task is to turn the promise of a shorter week into rules that protect income and keep workplaces functioning.

Key Points

• President Lee Jae Myung's government plans a reduction from 40 to 36 standard working hours a week without cutting pay.
• Legislation is targeted for the end of 2025, with subsidies and tax incentives to support adoption.
• Officials are still reviewing how the proposal would affect the 12 hour overtime allowance, wages and mandatory payments.
• Korean workers averaged about 1,874 working hours in 2023, while output per hour lagged leading economies.
• A nationwide poll released in early October 2025 found 63 percent opposed the proposal and 32 percent supported it.
• Small employers want help with staffing costs, simpler compliance and changes to the weekly rest day allowance.
• Pilots through 2027 will assess output, service quality, wellbeing, customer satisfaction and turnover.
• The government aims to bring average working hours below the OECD average by 2030, with a 32 hour week as a longer term ambition.