Government Fills Labor Exemption Gap in Mega Special Zone Law via Enforcement Decree

The government has moved to plug the hole left in the Mega Special Zone Act—which passed without labor exemption provisions—through an enforcement decree.

The government and ruling party, having excluded the labor exemption clause from the Mega Special Zone Act, which centers on supporting large-scale investment projects such as the South Jeolla Province–Gwangju semiconductor cluster, have instead begun revising the Enforcement Decree of the Labor Standards Act. The plan is to create an exception to the 52-hour workweek not through legislation but by administrative order. As a substitute for the labor exemption legislation that the business community has long demanded, the move is fueling growing debate over its effectiveness and legal certainty.

Why an Enforcement Decree?

The Mega Special Zone Act allows local governments to bundle broad areas into a single economic zone and grant various regulatory exemptions for corporate investment. The government and ruling party sought to include a 52-hour workweek exception in the bill to attract mega-projects such as the semiconductor cluster, but dropped the clause in the face of opposition from the opposition party and labor groups. Now they have decided to fill the gap by revising the Enforcement Decree of the Labor Standards Act.

An enforcement decree is a subordinate regulation that the government can revise without National Assembly approval. While it offers the advantage of a faster legislative process, unlike statutory law it can be easily changed at any time, which reduces certainty for companies making investment decisions. In particular, critics argue that handling an issue directly tied to workers' rights—such as working-hour exemptions—via decree amounts to circumventing the legislature's authority.

Political Sparring and Labor Backlash

The ruling and opposition parties clashed head-on over the issue at a National Assembly audit by the Climate, Energy, Environment and Labor Committee on the 27th. The opposition characterized the Mega Special Zone Act itself—containing the labor exemption clause—as a rollback of labor rights, and criticized even the decree as mere patchwork. They also sparred over the ruling party's decision to drop the labor exemption from the bill and turn to a decree, questioning whether it had effectively given up on legislation.

Labor's backlash has been even more pointed. The North Chungcheong branch of the Korean Confederation of Trade Unions issued a statement the same day urging the government to "scrap the Mega Special Zone Act, which runs counter to the climate crisis and funnels profits to big business." They argue that special zone designation will destroy the public interest and roll back working conditions for local workers. The business community raises the problem from the opposite direction, arguing that without labor exemption provisions there is no incentive for regional investment at all. Over the same law, business worries about a lack of incentives while labor worries about excessive privileges.

Limits and Implications of the Decree Patchwork

Exceptions to working-hour rules under the Labor Standards Act have so far been permitted only in limited areas, such as certain research and development roles. Extending exemptions broadly to manufacturing workers, such as semiconductor production line staff, via decree could be seen as crossing the boundary of legal interpretation. If the Board of Audit and Inspection or the courts were to challenge the limits of the decree, the government's entire plan could be shaken.

For investors, the key point is speed. Large investments like the semiconductor cluster typically proceed on a multi-year timeline, and whether the labor exemption is legally settled can determine the timing of investment. Early completion of the decree revision would reduce corporate burdens in the short term, but uncertainty remains that it could be reversed with a change of administration or policy. The business community is therefore likely to continue insisting that any effective labor exemption must be guaranteed by statute.

In the short term, administrative procedures such as the pre-announcement of the decree revision and regulatory and legislative review are expected to proceed in sequence. However, if labor opposition intensifies, renewed battles at public hearings or assembly audits could delay the revision timetable.

Over the medium term, the National Assembly's handling of the Mega Special Zone Act bill itself is a variable. If the decree is finalized before the bill passes—completing a reversed sequence—the ruling and opposition parties are expected to clash again in the Assembly over whether to reinstate the labor exemption clause in the law. Critics say an administrative workaround applied after the fact will reassure neither companies nor workers, meaning the issue will inevitably circle back to legislation.