1. Definition of overtime
This is an update to a post on overtime written ten years ago.
Wikipedia defines overtime as “the amount of time someone works beyond normal working hours.” So, for the definition of overtime in Korea, we should first find the definition of normal working hours.
Korean labor law defines normal working hours as 40 hours per week and 8 hours per day. (Article 50 of the Labor Standards Act). Therefore, Korean overtime is the time spent on work beyond 8 hours a day or 40 hours a week.
2. Limits for overtime
As long as an employer and an employee has an agreement, overtime is possible for up to 12 hours per week. Except for pregnant workers or female workers within 1 year after childbirth, there is no limit for daily overtime for adult workers.
3. Agreement on overtime
In principle, an agreement should be made between an employer and an individual employee for every instance of overtime work. However, the Supreme Court ruled that it is possible to predetermine overtime in labor contracts or include such overtime agreement in the rules of employment as long as the individual workers’ right to consent to overtime is not denied or restricted.
4. Overtime pay
For each hour of overtime, 100% of hourly ordinary wage should be paid to a worker and additionally 50% of hourly ordinary wage should also be paid. In other words, for every 1 hours of overtime, 150% of hourly ordinary wage should be paid.
5. More than 12 hours of weekly overtime allowed for some businesses
With some businesses specified by labor law (article 59 of the Labor Standards Act), overtime exceeding 12 hours per week is allowed as long as there is a written agreement between an employer and a representative of employees.
These businesses are:
- Transportation business (land, maritime and air transport businesses excluding public road passenger transport)
- Other transport-related services
- Healthcare business
According to the amendment of the labor standards act on February 28, 2018, the following businesses with 300 or more employees are not included in the list anymore. The change takes effect from July 1, 2019.
– goods sales and storage business– finance and insurance business;– movie production and entertainment business– communication business– educational study and research business– advertising business;– hotel and restaurant business– incineration and cleaning business– barber and beauty parlor business– social welfare businesses
6. Workers exempt from overtime pay
Article 63 of the labor standards act lists four categories of workers who are exempt from work hours regulations of the act. Two categories of workers are important for most business. They are:
A. Surveillance or intermittent work, for which the employer has obtained the approval of the Minister of Employment and Labor. One example would be security guards.
B. Managerial and supervisory work or work of handling confidential information irrespective of type of business.
The category B looks similar to the distinction between exempt and non-exempt workers under the Fair Labor Standards Act of the United States. But it is not stipulated in detailed manner as in the US law. All we have is a guideline, not law, by the Ministry of Employment and Labor, which I translate below.
“Workers who are engaged in managerial and supervisory work” means those who are in the position that is integrated with management with regard to labor management such as determining working conditions.
A mere title is not decisive factor to determine whether a person belongs to this category of workers.
A comprehensive examination should be made over factors such as whether a person is subject to strict restriction related to work hour arrangement, whether he participates in determination of labor management policy, whether he has the right to run labor management and whether he receives special allowance for his position.
Companies rarely use this category to exclude managers from overtime payment. Most managers, even if they are called as such, are under the strict work hour rules like having to show up at work on time.
The only group that may be included in this category are high ranking executives who often have titles like senior managing directors, vice president and etc. They usually have full discretion over their work hours.
But then again, these people are usually not considered as a worker under the Labor Standards Act. That means, overtime and other articles of the LSA do not apply to them at all from the beginning.
“Workers who are engaged in work of handling confidential information” means someone whose work, such as a duty of secretary and others, is inseparable from the work of those who are engaged in managerial and supervisory work and who are not subject to strict restriction in terms of work hours. Again, the titles are not decisive criteria here.