Issue Focus

● South Korea cut its maximum legal working hours per week to 52, down from 68. The revised law was applied, from July 2018, first at work sites with 300 employees or more. ● 52-hour Workweek Regime is problematic due to the following characteristics of the construction industry: 1) the construction industry is the order industry. Therefore, it is difficult to reflect a rise in production costs in the selling price. 2) the construction industry is much influenced by the seasons, weather, etc. 3) the construction industry is produced through contract by businesses of different sizes and different types at the same site. ● The effects of 52-hour Workweek Regime are analyzed based on the construction cost statement at 37 construction sites. As a result, total construction costs are likely to increase by an average 4.3% and up to 14.5%. Direct labor costs are estimated to increase by average 8.9%(up to 25.7%). And indirect labor costs are estimated to increase by average 12.3%(up to 35.0%). ● Therefore, 52-hour Workweek Regime requires complementary measures by industry. 1) the revised regulation should be applied to construction projects contracted after the new system kicked off; 2) reasonable construction budget and time should be reflected in new construction projects considering 52-hour workweek regime; 3) the flexible work-hour system should be expanded for efficient construction management. 4) application by project site based on construction amount is required.