The U.S. Congress enacted the Fair Labor Standards Act (FLSA) in 1938 to protect workers' basic rights. Its core provisions introduced a minimum wage and a 40-hour workweek. At the same time, the law explicitly specified exceptions to these systems. For management, administrative, and professional workers earning above a certain salary, it stipulated that employers would not have to pay overtime premiums of 1.5 times or more of regular wages, even when they worked more than 40 hours a week. This is known as the "White-collar Exemption," meaning an exemption from the obligation to pay overtime wages to white-collar (office) workers.
At the time, the United States placed exceptions in its labor standards law because it considered the occupational characteristics of white-collar workers, which differ from those of blue-collar manual laborers. Blue-collar workers' work methods and output are standardized in hourly units, so working-hour regulations can be effective, but this is not the case for white-collar workers. Of course, several conditions accompany eligibility for the white-collar exemption. First, a worker must meet the various criteria of a duties test by job. Salary criteria must also be satisfied, requiring pay in a regular form such as weekly, monthly, or annual salary, with the amount exceeding a certain level. This salary threshold was $30 per week in 1938 and gradually rose to reach the current $684 per week ($30,568 per year). For highly compensated workers earning $107,432 or more per year, meeting just one of the several duties test criteria is sufficient.
Recently, Korea's government has also been reviewing the introduction of a Korean-style white-collar exemption. However, unlike the United States, it appears likely to be reflected not in the Labor Standards Act but in the "Mega Special Zone Special Act" for building the Gwangju semiconductor cluster and other projects. With this approach, it will be difficult to catch up with the United States, which granted broad exceptions to working-hour regulations across white-collar job categories without limiting them to specific regions or industries. Even conservative Japan revised its Labor Standards Act in 2018 to introduce the "Highly Professional" system, similar to the white-collar exemption. If our regulatory innovation falls short of even Japan's, we cannot guarantee an advantage in the global productivity war.
