Challenges of the 52-Hour Work Week System in South Korea's Tech Sector

With the spread of the "996" work model in China, South Korea's tech sector faces significant pressure due to the maximum 52-hour work week. As the world competes in the race for deep technological innovation, from Artificial Intelligence and semiconductors to quantum computing, innovation has become the primary driver of power and progress. This global competition has led to increased workloads and intensified work cultures in many companies. However, these companies find themselves in a real dilemma: they cannot reduce working hours at a time when competitors worldwide are pushing harder for leadership.

Details of the 52-Hour Work Week System in South Korea

In South Korea, the standard work week is 40 hours, with the possibility of up to 12 hours of overtime, usually compensated at no less than 1.5 times the regular wage. Employers who violate these regulations face fines and imprisonment for executives, in addition to civil liability.

The 52-hour work week, introduced in 2018 for large companies with over 300 employees and public institutions, has been gradually implemented to cover all companies and will be fully enforced on January 1, 2025.

Earlier this year, South Korea introduced an extended special work program allowing employees to exceed the 52-hour weekly limit, with employee and government approval, up to a maximum of 64 hours. For deep technology sectors like semiconductors, approval periods were temporarily extended from three to six months, though local media reports indicate that only a few companies have actually utilized this adjustment.

Looking ahead, the South Korean government plans to reduce these special exceptions and tighten working hour regulations, even as some legislators argue that current guidelines are sufficient.

Investor and Founder Perspectives in the Tech Sector

Many investors and founders of tech companies in South Korea have discussed the impact of the 52-hour work week limit on their businesses and R&D projects, especially as these companies strive to compete with global entities.

Youngkwan Lee, CEO of Bluepoint Partners, a South Korean venture capital firm, stated that "the 52-hour work week poses a significant challenge when making investment decisions in deep technology sectors." He added: "This is especially true when investing in globally competitive sectors such as semiconductors, Artificial Intelligence, and quantum computing. Work challenges are particularly complex in these sectors, where founders and teams often face intense workloads and long hours during critical growth stages."

At Bluepoint, investments are often made in early stages before core technologies are fully developed or products are market-ready. In this context, Lee noted that strict working hour limits can impact the pace of achieving key business milestones.

In South Korea, local reports showed that 70.4% of employees in startups are willing to work more than 52 hours per week if adequate compensation is provided.

Perspectives from Startups

Booyoung Kim, CTO at LeMong, a South Korean startup backed by LG Uplus that provides agentic AI solutions to over 13,000 small and medium-sized businesses in the food and beverage sector, mentioned that the country's 52-hour work week system often feels more like a constraint than a protection.

Kim added that while intense short-term focus is crucial as project deadlines approach or when optimizing key algorithms, strict legal limits can sometimes hinder progress.

When asked about workplace flexibility, Hooyoung Lee, co-founder of LeMong, which produces feedback management software, stated that he believes a monthly average for working hours would be more practical than strict adherence to the country's 52-hour weekly limit. He noted that work intensity often varies depending on the R&D stage and project timelines in deep tech companies.

Kim also mentioned that there is a clear link between performance and working hours. He stated that high-performing team members often tend to put in longer hours. However, instead of seeking rewards for overtime, these top performers focus on achieving results and advancing quickly within the company.

Impacts on Investment and Other Industries

Another Seoul-based venture capitalist, who invests in startups, downplayed the impact of the 52-hour work week limit on investment decisions. "Currently, there don't seem to be any major concerns. While it's always difficult to predict how labor regulations or monitoring practices will evolve, many VC firms today don't strictly track employee working hours. To my understanding, there is currently no requirement for companies to provide official proof that employees adhere to the 52-hour weekly limit."

If an employee files a complaint, the venture capitalist noted that "the lack of detailed time records could raise questions about compliance. However, most R&D or deep tech companies typically employ highly self-motivated professionals who manage their schedules responsibly, so such cases appear relatively rare."

The biggest challenge likely lies in labor-intensive industries, such as logistics, delivery, or manufacturing, where a significant portion of workers earn close to the minimum wage. "In those sectors, the 52-hour work week regulation can significantly increase labor costs due to mandatory overtime pay and paid leaves. Consequently, maintaining productivity and achieving economies of scale can become more difficult for companies operating on thin profit margins," said the investor.

Global Comparison of Working Hours

To understand where South Korea's 52-hour limit stands in the global landscape - and why its deep tech companies feel squeezed between competing pressures - it's worth examining how other major tech hubs regulate working hours.

In Germany, the UK, and France, standard work weeks typically range from 33 to 48 hours. In Australia and Canada, the standard work week is 38 and 40 hours respectively, with mandatory overtime pay, providing a balance between labor rights and workplace flexibility.

In the United States, the Fair Labor Standards Act (FLSA) sets a standard 40-hour work week. Non-exempt employees receive one and a half times their regular pay for any overtime, and there is no overall limit on hours. (In California, rules only require double pay for some overtime.)

In China, the standard work schedule is also 40 hours per week, or 8 hours per day. Overtime pay is at higher rates: approximately 150% of regular pay on weekdays, 200% on weekends, and 300% on public holidays.

In Japan, the standard work week is 40 hours, with limits of 45 overtime hours per month and 370 hours annually under normal circumstances. Employers who exceed these limits can face fines and administrative penalties, as in other countries.

South Korea's 52-hour limit falls in the middle of this spectrum, being stricter than the United States and Singapore but more flexible than most of Europe. In both cases, for deep tech founders competing globally, it's not just about the number, but also whether strict weekly limits can accommodate the intensive and uneven work flows that characterize early-stage R&D.

Examples of major tech companies that have implemented the 996 model or faced similar pressures include Alibaba and JD.com in China.

• More information about the 996 system: You can visit the Wikipedia page for the 996 working hour system.

Work Flexibility and its Impact on Productivity

Recent studies have shown that flexibility in working hours can increase employee productivity and satisfaction. For instance, a Stanford University study found that employees working from home were 13% more productive.

• Study on productivity increase: To Raise Productivity, Let More Employees Work From Home - Harvard Business Review.
• Importance of flexible work: The Power Of Flexible Work And Why It Boosts Employee Morale - Forbes.

It is important to note that balancing work demands and employee well-being remains an ongoing challenge in the global technology sector.