"Jeonse Bus Companies Illegally Receive Tens of Millions in Employment Retention Subsidies"…Government Pledges "Thorough Crackdown"

Assembly Member Yang Yi-won Requests Ministry of Employment to Investigate 16 Companies for Fraudulent Subsidy Claims
470 Million Won Paid Over 4 Months... "Equivalent to Embezzlement of National Budget" Criticism
"Daewoo Bus Received 700 Million Won Subsidy Then Laid Off 386 Employees... Criticized for Profitable Closure"

Photo is unrelated to the article. Asia Economy DB

[Asia Economy Reporter Kim Bo-kyung] Three charter bus companies located in Seongnam are suspected of illegally receiving government employment retention subsidies worth hundreds of millions of won by paying back (cash refund) their employees' suspension allowances.

These circumstances came to light after Yang Yi-won-young, a member of the National Assembly's Environment and Labor Committee from the Democratic Party of Korea, requested an investigation by the Ministry of Employment and Labor into 16 companies reported for fraudulent receipt of employment retention subsidies.

Among these businesses, three were each headed by family members?a husband, wife, and son?as CEOs. Contrary to their registered business addresses, all were found to be located in a single office in Seongnam City.

Upon reviewing documents submitted during a surprise inspection by the Ministry of Employment and Labor, it was found that these companies paid 1.8 million won per driver as suspension allowance in June. However, a total of 85 cases were recovered into the personal deposit and withdrawal account of CEO Jeong Mo (the husband), with the amount estimated to be about 150 million won.

There are also allegations that the attendance management logs and suspension details submitted to receive the employment retention subsidies were falsified. Representative Yang Yi-won-young pointed out, "The handwritten signatures confirming attendance, supposedly written by the drivers, appear to be identical."

The three companies received government employment retention subsidies based on the payment of suspension allowances. In June alone, 114.85 million won was paid, and over four months, approximately 476.74 million won was received. If it is confirmed that such cash refunds were conducted illegally, criminal charges for fraudulent receipt of employment retention subsidies will be filed.

A total of 16 companies, including the three mentioned, were reported through Representative Yang Yi-won-young's office. The total amount of employment retention subsidies received by these companies is estimated to be about 971.03 million won. The Ministry of Employment and Labor has notified the relevant regional offices of the reported companies, and investigations are currently underway.

[Image source=Yonhap News]

As of the end of September this year, government employment retention subsidies provided to the charter bus transportation industry amounted to nearly 37.9 billion won across 710 workplaces. The Ministry of Employment and Labor has been conducting a comprehensive inspection for fraudulent receipt of employment retention subsidies since the third week of September.

At the Ministry of Employment and Labor's audit on the 26th, Representative Yang Yi-won-young stated, "Reports of fraudulent receipt of employment retention subsidies exploiting the COVID-19 situation are being received by my office. If true, this is tantamount to embezzling funds meant for more struggling companies and workers, so thorough investigation and strict punishment by the Ministry of Employment and Labor are necessary."

In response, Minister Lee Jae-gap of the Ministry of Employment and Labor said, "I believe strict enforcement is necessary."

Meanwhile, as of September 20 this year, a total of 24 workplaces have reported plans for mass layoffs under the Labor Standards Act. Among them, two workplaces were confirmed to have conducted mass layoffs despite receiving employment retention subsidies.

According to data submitted to the Ministry of Employment and Labor, Daewoo Bus (Jail Daewoo Commercial Vehicle) and Iljin Display received employment retention subsidies of 752 million won and 61 million won respectively but proceeded with layoffs.

Notably, Daewoo Bus, which announced the layoff of 386 employees on the 4th, applied for 534 million won in employment retention subsidies in August but did not receive the funds due to non-compliance with the one-month layoff prevention period. Daewoo Bus has faced criticism from labor unions and the local community for plans to relocate to Vietnam after closing while in the black.

Representative Yang Yi-won-young pointed out, "Management and supervision of companies receiving employment retention subsidies should be strengthened. Additional government support should be provided to companies making efforts through shared pain between labor and management, while strict responsibility should be imposed on companies that unilaterally enforce mass layoffs without such efforts."

Minister Lee said, "In the case of Daewoo Bus, various labor-management conflicts have arisen, and there are also controversies over unfair dismissals. We are closely monitoring and inspecting this workplace and conducting investigations into unpaid wages. We will also look into matters related to employment retention subsidies."