SMEs and Startups Minister Hong Jong-haak will meet with representatives of small and medium-sized firms and venture startups next week to exchange views on issues ranging from the minimum wage hike and work-hour reductions, market watchers said Thursday.

Hong will meet with Park Sung-taek, chairman of the Korea Federation of Small and Medium Business and scores of other representatives at the KBIZ headquarters in Yeouido, central Seoul, Tuesday.

Small and medium enterprises have called on the government to provide more support in the face of an increased minimum wage and reduced working hours that will directly impact their businesses. 

"Small businesses which are less competitive will collapse due to the drastic minimum wage increase," a businessman here warned. 

SMEs make up 99 percent of all South Korean companies and hire 88 percent of its workers, according to the KBIZ Web page.

The Moon Jae-in administration is pushing ahead with a revision to the Labor Standards Act, pending approval by the National Assembly, limiting the maximum working hours as a means to implement the chief executive's election pledge to create over 800,000 new jobs in the public sector.

The Moon government also plans to reduce the annual working hours to below 1,800.

Data from the Organization for Economic Cooperation and Development show an average South Korean worked 2,069 hours in 2016, 306 hours more than the OECD average of 1,763 hours.

The Korea Economic Research Institute report said the 52 weekly working hours will cost businesses 12.3 trillion won every year.

The minimum wage is to rise to 10,000 won ($8.80) during President Moon Jae-in's five year term, which ends in 2022, from the current 6,470 won. The National Assembly is pushing for a bill to shorten the working hours per week to 52 from 68.

"Workers should be allowed to work eight more hours per week pending the labor-management agreement if we urgently need to meet production deadlines," a businessman said. 

Minister Hong said he agrees to the SMEs' argument that employees at small businesses should be allowed to work eight additional hours per week.

"I do think that we need to have consideration for small businesses," he said during a luncheon meeting with reporters. 

"Once the income-led growth effectively takes place there won't be such burden placed on the SMEs, but we need some time for that," he said, adding other support measures should be prepared in case the extended working hour proposal is not accepted. (Yonhap)