Korea May Strip Overtime Pay From Half of Samsung’s Workforce

South Korea’s government is drafting a law that would let chipmakers in designated high-tech zones (called “mega special zones”) bypass the 52-hour workweek limit and eliminate overtime, night, and holiday premiums for high-earning engineers — a measure that could affect the majority of workers at Samsung Electronics and SK hynix.

What happened

The government and the ruling party plan to introduce the Mega-Special Zone Special Act (provisional title) within September 2026. The bill includes a “white-collar exemption” (a carve-out that removes standard working-hour protections for highly paid professionals) that would allow chipmakers operating inside designated mega special zones to suspend the country’s 52-hour weekly cap and stop paying overtime, night, and holiday premiums — provided the individual worker gives written consent.

The income threshold that triggers eligibility is being debated between two ministries: the Ministry of Employment and Labor favors limiting it to workers earning at least 130 million KRW (~USD 96,000) per year, which corresponds to the top 3% of earners nationally; the Ministry of Trade, Industry and Energy prefers a broader top-7% threshold. Data obtained by Democratic Party lawmaker Lee Yong-woo from the Korea Workers Compensation and Welfare Service shows that at Samsung Electronics, 72,708 of 128,848 workers (56.4%) already clear the 130 million KRW bar, with an average remuneration of 150.05 million KRW. At SK hynix, the share is even higher: 28,469 of 34,569 workers (82.4%), averaging 176.26 million KRW annually.

Why Korea does it this way

Korea introduced the 52-hour workweek (주 52시간제) in 2018 after decades of notoriously long working hours that ranked among the highest in the OECD. The law capped total weekly hours — including overtime — at 52, with criminal penalties for employers who breach the limit. Exemptions have existed for certain sectors, but applying a blanket carve-out to an entire income tier inside geographically defined zones would be a significant structural departure. Korea’s semiconductor industry accounts for a large share of total exports, giving it substantial political leverage when lobbying for regulatory relief to compete with U.S. and Taiwanese chipmakers, which face fewer working-hour restrictions.

What it means for you

Chip-industry workers: If the top-3% threshold is adopted, any Samsung Electronics or SK hynix engineer earning above roughly 130 million KRW (verify the exact figure once the bill is filed) who works inside a designated mega special zone and signs consent could legally be required to work beyond 52 hours per week with no overtime premium — replacing those allowances with a flat “general allowance” whose formula has not yet been published.

Workers outside the zones: The 52-hour cap and overtime premiums remain intact for everyone working outside the designated mega special zones, and for chip workers below the income threshold.

Investors in Korean chipmakers: Samsung Electronics (005930.KS) and SK hynix (000660.KS) are both constituents of the KOSPI index. The bill is explicitly designed to reduce labor-cost friction and extend productive hours for R&D-intensive roles; whether that translates to earnings is not determinable from the bill alone — watch operating-margin guidance in upcoming earnings disclosures.

Foreign residents employed in Korea’s tech sector: Expatriate engineers on Korean contracts are subject to the same labor law as Korean nationals; if you are employed by a covered firm inside a mega special zone and earn above the threshold, this exemption would apply to you too.

Watch next

• The government has said it will introduce the Mega-Special Zone Special Act bill before the end of September 2026. Watch for the official bill filing date, which will confirm the exact income threshold (130 million KRW vs. the broader top-7% definition) and the structure of the replacement “general allowance.”
• The National Assembly (Korea’s single-chamber legislature) must pass the bill. The ruling party does not hold the 180-seat supermajority needed to bypass filibuster, so opposition Democratic Party votes are required — track floor scheduling and any Democratic Party position statement, which has so far been critical of the labor carve-out.
• The Korea Workers Compensation and Welfare Service updates annual remuneration data yearly; if the threshold is pegged to “top 3% of earners,” the KRW cutoff will shift with each update — check the Ministry of Employment and Labor’s annual survey on working conditions by employment type for the current figure once the bill passes.

Source: The Kyunghyang Shinmun (경향신문)