Labor deregulation stripped from mega-zone bill as September filing deadline passes

Plans to introduce a sweeping labor deregulation bill — including exemptions from the 52-hour workweek — by the end of September have fallen through. The Democratic Party of Korea had billed the so-called super-mega-zone special act as its top legislative priority for the regular parliamentary session, but the party appears to have hit the brakes in the face of fierce resistance from organized labor.

The Democratic Party and the government have renamed the bill from the "mega special zone act" to the "super-mega-zone special act" and are still ironing out the details. Provisions that had been expected to be included — among them a white-collar exemption, a flexible working-hours scheme and special carve-outs from the fixed-term employment law — are now widely expected to be dropped.

The white-collar exemption, which would exclude high-earning research and development workers from the 52-hour weekly cap, is the most contentious clause and has drawn the sharpest pushback from labor groups. Although an early draft of the bill included the provision, there are signs the party is reluctant to pick a fight with unions over it.

President Lee Jae Myung had earlier met with the two major union federations, after which a focused round of tripartite talks — bringing together labor, management and the government to discuss the labor deregulation provisions — got under way. It was the first time the Korean Confederation of Trade Unions had taken part in tripartite dialogue since 2020.

"It's hard to just throw something out there that would blow up the table while talks with labor are still going on," one Democratic Party lawmaker said. Another lawmaker was more blunt: "With approval ratings already down over real estate policy and the farmland survey, do we really want to pick another fight with labor on top of everything else?"

Inside the party, there is grumbling that momentum for labor deregulation has faded. Part of the reason, sources say, is that the bill's sponsoring committee shifted from the Trade, Industry, Small and Medium Enterprises and Startups Committee to the Political Affairs Committee, putting the labor exemption clauses back under review.

"The Ministry of Trade, Industry and Energy pushed to at least get the bill filed this month, but once the white-collar exemption became an issue, the whole thing fell apart," one party official said. Another official noted that the prevailing view within the party is that there is no compelling reason to embed a 52-hour exemption in the super-mega-zone bill specifically, rather than in the Semiconductor Special Act or the Labor Standards Act.

One option being floated is to introduce the bill first and add the labor deregulation provisions later during the National Assembly review process. "Adjustments can be made at the Legislation and Judiciary Committee," one lawmaker said. A source close to the matter said dropping the labor provisions before filing had become the more likely outcome, but they could still be inserted at the review stage — and that even without them, the bill already contains more than 300 special exemption clauses, which is itself a burden.

The opposition has sharpened its attacks on the government and the ruling party, calling them "a gang of political con artists." One People Power Party lawmaker said the party had long advocated exempting research workers from the 52-hour rule. "You knew it was necessary, and yet you lied and deceived people — you owe the public an apology," the lawmaker said.