40,000 Coupang Delivery Contractors Had No Industrial Accident or Employment Insurance

Korea Workers' Compensation and Welfare Service Releases Full Survey Results
90 Sites Caught...3 Billion KRW in Fines Imposed

It has been confirmed that about 40,000 workers at courier sales offices contracted for delivery with Coupang are not enrolled in industrial accident and employment insurance.

On the 3rd, the Korea Workers' Compensation and Welfare Service under the Ministry of Employment and Labor announced the results of a full survey on the non-enrollment in social insurance of 528 courier sales offices contracted with Coupang's logistics delivery subsidiary Coupang Logistics Service (CLS) and 11 logistics center consignment companies.

The full survey, conducted from December 20 of last year to May 30 of this year, checked the insurance enrollment status of workers and labor providers based on the industrial accident and employment insurance reports of each business over the past three years and materials submitted by business owners.

As a result, 90 courier sales offices that did not report industrial accident and employment insurance for their workers were identified. The Service processed insurance enrollment for 40,948 unreported workers and labor providers. Among them, 20,868 were not enrolled in industrial accident insurance, and 20,080 were not enrolled in employment insurance. Since most of these overlap, the actual number of workers missing social insurance enrollment is about 20,000.

Coupang achieved an operating profit of over 600 billion won last year, marking its first annual profit in 14 years since its founding in 2010. The photo shows Coupang headquarters in Songpa-gu, Seoul, on the 28th. Photo by Jinhyung Kang aymsdream@

The Service imposed unpaid insurance premiums totaling 4.737 billion KRW (2.022 billion KRW for industrial accident insurance and 2.715 billion KRW for employment insurance) on these cases. It also plans to request imposition of fines totaling 296 million KRW calculated based on the number of unpaid workers. Furthermore, to prevent recurrence, guidance and instructions were provided to the business owners of Coupang CLS consignment companies.

This investigation was conducted following revelations before last year's National Assembly audit that a company operating Coupang's logistics warehouse (Coupang Camp) under consignment had obtained 'industrial accident insurance waiver agreements' from workers. Instead of signing labor contracts with workers, they contracted as 'individual business owners' to evade labor law application and social insurance contributions.

These so-called 'fake 3.3 workers,' who work under the employer's instructions but contract as individual business owners paying 3.3% business income tax, fall into a blind spot where they are not protected by labor laws or social insurance.

Park Jong-gil, Director of the Service, stated, "Industrial accident and employment insurance are mandatorily applied to workers and labor providers regardless of the size or type of the workplace," and added, "We will examine whether similar cases exist in related industries and strive to prevent recurrence."