The cutback in legal workweek could pare more than 300,000 jobs in Korea over the next two years, according to the Korea Economic Research Institute (KERI).

The private think tank predicted 103,000 jobs would be lost next year and 233,000 in 2020 as the result of the 52-hour cap on workweek lowered from the previous maximum 68 hours.

The new workweek went into force broadly in July, but punitive action - fine plus jail term for violation - was put on hold for six months.

The institute warned that shortened work hours while productivity remains low would reduce wages. Since employers won’t be able to cut wages of existing payroll, they will likely shed workers and reduce hiring.

Unless productivity improves by 1 percent on average and capital utilization ratio by more than 5 percent, deterioration of jobs is inevitable, said Cho Kyung-yeop, a KERI senior researcher.

The new workweek rule also applies to small workplaces employing from 20 to 299 workers from Jan. 1, 2019, and those with 4 to 49 workers from July 2019.

The institute predicted large companies would be responsible for 84,700 out of an estimated 103,000 job losses next year and smaller companies 29,000.

Since large companies cannot fight unions in wage negotiation, they will likely opt to cut back labor force to keep up productivity, Cho said.

Once the new workweek comes into full force in small-scale workplaces, about 93,300 irregular workers could lose jobs in 2020.

By Kim In-oh and Cho Jeehyun

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