Kim Younghun Proposes Social Dialogue on "Mega Special Zone Labor Exceptions"... "No Finalized Government Position" (Comprehensive)

Key Agendas Likely to Include Relaxation of 52-Hour Workweek and Fixed-Term 2+2 Extensions

The government is initiating a tripartite social dialogue involving labor, management, and the government over labor-related exceptions to be included in the "Mega Special Zone Special Act" for fostering advanced industries such as semiconductors and artificial intelligence (AI). As labor organizations have strongly objected to labor flexibilization provisions—such as the relaxation of the 52-hour workweek for high-income research and development (R&D) personnel—this move creates a platform for all parties, including the two major labor federations and management, to join in seeking compromise.

Kim Younghoon, Minister of Employment and Labor, is briefing on the "Proposal for Social Dialogue Related to the Mega-Special Zone Special Act," which includes labor regulation relaxations such as applying exceptions to the 52-hour workweek for research positions in the mega-special zone and expanding permissible dispatched work, at the Government Complex Seoul in Jongno-gu, Seoul, on the 15th. 2026.9.15 Photo by Jo Yongjun

Labor Flexibilization in Mega Special Zone Act Emerges as Key Issue... Government Proposes Urgent Social Dialogue Among Labor, Business, and Government

Kim Younghun, Minister of Employment and Labor, held a press conference at the Government Seoul Complex on September 15, proposing a "single-issue social dialogue" regarding the labor exceptions in the Mega Special Zone Act.

Minister Kim stated, "Given the global all-out competition in advanced industries, enacting a special zone is urgent to address regional disparities and create jobs for young people. However, since the labor exceptions under discussion are unprecedented in our society, it is essential for both labor and management, as stakeholders, to participate directly in the dialogue and narrow their differences."

He continued, "Amid the great transformation our society faces, we must seek new approaches to growth that integrate labor, rather than relying on old frameworks. I urge all parties to join the dialogue for the sake of jobs for the next generation and the future of our society."

This proposal is a follow-up measure to President Lee Jaemyung's meeting on September 3 with the heads of the two major labor federations, where he called for resolving labor issues—including those related to the Mega Special Zone—through social dialogue.

The Mega Special Zone Act centers on designating key growth hubs for economic development and nurturing strategic industries in the "5 Core, 3 Special" regions, providing broad regulatory exceptions in areas such as finance, infrastructure, and budgeting. During the legislative process, labor flexibilization provisions inside the zones have drawn fierce resistance from the labor federations, which have denounced them as "labor market regression."

Key labor exception proposals currently being discussed include: exclusion from the 52-hour weekly cap; allowing regular pay in lieu of overtime, night, and holiday differentials; expanding the scope of selective work hour systems; extending the allowable period for fixed-term employees; and widening the range of permissible dispatch work.

"This dialogue will create an opportunity for negotiation and compromise to strengthen industrial competitiveness and create quality jobs," Minister Kim said, adding, "In addition to labor exceptions, we will also discuss proposals from both labor and management to protect worker health and enhance corporate productivity."

The Ministry of Employment and Labor has explained this proposal to the Federation of Korean Trade Unions (FKTU), the Korean Confederation of Trade Unions (KCTU), the Korea Employers Federation (KEF), and the Korea Federation of SMEs, and plans to collect feedback and hold the first meeting soon.

On the government side, the Ministry of Employment and Labor, the Ministry of Trade, Industry and Energy, and the Office for Government Policy Coordination will participate. Minister Kim also mentioned, "I believe the Economic, Social and Labor Council could also serve as a principal body for these discussions."

Minister Kim's initiative comes as the Mega Special Zone Special Act, which the government and ruling party aim to submit within the month and enact by the year's end, is facing intense controversy over the significant relaxation of labor regulations within the special zones.

Kim Younghoon, Minister of Employment and Labor, is holding a briefing on the "Proposal for Social Dialogue Related to the Mega Special Zone Special Act" at the Government Complex Seoul in Jongno-gu, Seoul on the 15th. 2026.9.15 Photo by Jo Yongjun

"Urgent Issues: Relaxation of the 52-Hour Rule, Fixed-Term 2+2 Extensions"

The most urgent topics identified by Minister Kim are the so-called "white-collar exemption," which would remove the 52-hour weekly work cap and exclude overtime, night, and holiday pay for high-income managers and R&D personnel, and the "fixed-term 2+2" proposal, which would extend the maximum period for fixed-term employees from the current two years to an additional two years upon agreement with the employee.

Management has argued that labor exceptions are essential for the success of the Mega Special Zone, while labor organizations have strongly denounced these measures as labor market rollbacks.

Addressing this, Minister Kim emphasized, "The goal of the tripartite dialogue is the dialogue itself; the content can be fully reflected in the National Assembly's legislative process, independently of the final outcome, in order to help prevent conflict. The government will supply objective data such as field surveys and play a facilitating role in enabling in-depth discussions."

Minister Kim also stated regarding these contentious issues, "The government has not made any final decisions," and added, "Personally, I hold a negative view on the white-collar exemption."

He firmly refuted suspicions that the government may have predetermined the outcome and is merely drawing labor organizations into the talks, saying, "Since the creation of the Mega Special Zone is a core project crucial to the nation's fate, it is only natural for stakeholders sharing in its benefits to participate from the policy drafting stage. It is by no means an easy agenda, but it is a challenge we can certainly resolve together."

Will Labor Federations Sit at the Table? FKTU: "Will Participate Responsibly" vs KCTU: "Careful Deliberation Needed"

Both major labor federations have indicated a possibility of participating in the dialogue. The FKTU stated in a spokesperson’s commentary, "As the party proposing social dialogue, we will take part responsibly so that balanced regional development and strengthened industrial competitiveness translate into improvements in workers’ quality of life." The FKTU emphasized, however, "Our participation does not equate to accepting labor exceptions, and specific matters should be discussed through social dialogue."

Meanwhile, the KCTU pointed out that the Ministry of Employment and Labor had requested its participation in the Economic, Social and Labor Council the previous day, and clarified, "What the KCTU has proposed is a new form of social bargaining based on deliberation and sectoral participation. We will reach an organizational position after careful internal discussion in response to this proposal."

This content was produced with the assistance of AI translation services.