Suspicion of 200 Million Won Labor Cost Paid to 'Ghost Cleaners' by Jeonju Cleaning Company

Jeonju City "Recovers 200 Million Won Confirmed as Wrongful Payment... Considering Criminal Charges and Contract Termination"

A cleaning company commissioned by Jeonju City, embroiled in allegations of power abuse against sanitation workers, has been found to have collected labor costs for years by listing "ghost employees" who never actually worked.
[Image source=Yonhap News]

[Asia Economy Kim Bong-ju, Intern Reporter] A cleaning company commissioned by Jeonju City, embroiled in allegations of mistreatment of sanitation workers, has been found to have collected labor costs for several years by listing 'ghost employees' who never actually worked.

The National Democratic Labor Union held a press conference at Jeonju City Hall on the morning of the 9th, stating, "Between 2017 and 2018, Towoo paid a total of 200 million won in direct and indirect labor costs to about 10 fictitious individuals who were not employees."

The union explained that this claim is based on a comparison between Towoo's post-settlement reports during that period and workers' names, wages, and insurance payment certificates reviewed by the union and Jeonju City Council member Heo Ok-hee.

They added that among these individuals were children and relatives of the company representative who, after marriage, live in other regions.

It was also investigated that Kang, presumed to be an employee of an internet media company separately operated by the cleaning company representative, received a sanitation worker's salary.

The union urged Jeonju City to take immediate legal action and terminate the cleaning contract, stating, "It is presumed that the company representative embezzled money by falsely paying labor costs under the names of acquaintances."

Towoo, which employs 86 sanitation workers, receives about 8 billion won annually from Jeonju City to perform street cleaning and general waste collection and transportation in four districts.

The company representative was recently criticized for frequently mobilizing sanitation workers for home extensions and renovations and for paying for materials such as steel and aluminum needed for the work using the company’s corporate card.

Jeonju City plans to recover all of the approximately 200 million won confirmed to have been improperly paid in labor costs and insurance premiums.

The city also stated, "If other illegal activities are uncovered through a special audit, we plan to file criminal charges and terminate the cleaning service contract."

According to Jeonju City's investigation, a total of 21 people received fake labor payments from 2017 to the following year. Additionally, the company was found to have paid not only wages but also the four major insurance premiums from the service fees that should have been paid to sanitation workers.