Starting this year, small and midsized companies in South Korea have a new financial incentive to give their employees a half-day off: cash from the government.
Since January, the Ministry of Employment and Labor has been subsidizing companies that adopt a 4.5-day workweek, offering between 200,000 won and 800,000 won (about $136 to $543) per worker as part of a broader push to cut some of the longest working hours in the Organization for Economic Cooperation and Development.
Under the program, companies with fewer than 50 employees can receive up to 600,000 won per worker each quarter, plus an extra 800,000 won for every new hire brought on as part of the transition. Firms with 50 to 300 employees are eligible for subsidies covering up to 100 workers. The ministry has set aside a 27.6 billion won budget to cover labor and operating costs, along with 1.7 billion won earmarked for consulting services to help companies figure out how to make the shorter week work.
“Eligibility will be reviewed by employment insurance investigators to prevent abuse,” a ministry official said, according to the Korea Herald, adding that the program is meant to ease the financial burden of shortening work hours without cutting anyone’s wages.
The subsidy is a centerpiece of President Lee Jae-myung’s labor agenda, which aims to bring the country’s annual working hours below the OECD average by 2030 and eventually move toward a full four-day week. Koreans worked an average of 1,859 hours in 2024 — 142 hours more than the OECD average, according to the ministry.
The idea appears to have real public support: a survey of 13,000 Korean workers released by the workplace app Blind found that 78 percent favored a 4.5-day workweek. Employers are more cautious. The Korea Employers Federation has warned that with the country’s hourly labor productivity sitting at roughly 80 percent of the OECD average, cutting hours without matching productivity gains could hurt competitiveness, and has called for more flexible scheduling and efficiency improvements before further cuts to working time.
Korea is not alone in testing shorter weeks: Belgium has already legalized an optional four-day workweek, while the United States, Japan and Taiwan are moving more cautiously. For now, Korea’s approach is a targeted subsidy aimed squarely at the small and midsized companies least able to absorb the cost of change on their own.
Source: Lim Jae-seong, The Korea Herald, December 4, 2025.
