The government is considering easing a range of labor regulations to support its flagship megaprojects for the semiconductor and artificial intelligence (AI) sectors, drawing criticism from labor groups that it is prioritizing strategic industries at the expense of workers' rights.

According to multiple sources in labor and political circles, Friday, the government is working on proposals to include exemptions from four key labor regulations in a planned special act that would govern the chip cluster megaprojects in the Gwangju region.

The exemptions include lifting the 52-hour workweek cap for semiconductor research and development personnel and extending the maximum fixed-term contract period before temporary employees must be converted to regular employees from two years to four.

They also include increasing the number of jobs eligible for dispatched workers — a form of non-regular employment — and extending the so-called flexible working hour system from one month to six months, allowing for more intensive workloads during condensed periods while maintaining the 52-hour workweek limit.

According to sources, the Ministry of Trade, Industry and Energy has been drafting the proposals based on suggestions from business groups since the megaproject initiative was unveiled on June 29.

Business groups have long called for such changes, arguing that greater labor flexibility is needed for companies in rapidly changing and globally competitive industries.

But the proposals immediately drew backlash from the labor side, which is especially notable given the Lee Jae Myung administration's overall pro-labor stance and the ruling Democratic Party of Korea's (DPK) leading role earlier this year in excluding a 52-hour workweek exemption from a separate special bill aimed at the chip industry.

Labor unions argue that the deregulation would expose workers to excessive hours and create only "bad jobs" in the proposed zones.

The Korean Confederation of Trade Unions (KCTU), an umbrella labor group, said in a statement Friday, "The megaproject zones will produce neither future-oriented jobs nor good jobs," if employment in those areas is based on four-year temporary contracts, expanded use of dispatched workers and long working hours without overtime pay.

Another umbrella labor group, the Federation of Korean Trade Unions (FKTU), also warned in a statement, "If exceptions to labor protections designed to safeguard workers' health and job security begin to be allowed simply because they apply to the megaproject zones, those exceptions will inevitably become the norm."

It also urged the government to "immediately halt legislation that undermines labor standards."

The DPK said no decision had been made and acknowledged that lawmakers remain divided over the proposals.

The Ministry of Employment of Labor also stressed that the proposals have not been adopted as government policy.

“At the request of lawmakers of the National Assembly’s Climate, Energy, Environment and Labor Committees, we briefed them on various demands and the positions of interested groups,” a ministry official said. “But no specific provisions have yet been finalized for the special act."

The official said the ministry will support the legislative process once the bill's details are finalized and it is formally introduced.