Company Habitually Withholding Employee Wages, CEO Took Thousands... Special Labor Inspection Conducted

Announcement of Special Labor Inspection Cases by the Ministry of Employment and Labor

A company was caught for habitually withholding 4 billion KRW in employee wages over four years while the CEO received a bonus of 20 million KRW.

[Photo by Ministry of Employment and Labor]

On the 8th, the Ministry of Employment and Labor announced the results of special labor inspections related to Company ㄱ located in Busan and Company ㄴ located in Chungnam.

Company ㄱ, which employed about 30 people and operated several gas stations in the Busan area, evaded labor law application through so-called 'workplace splitting.' Since 2016, it re-contracted employees of ㄷ gas station, which was operated as a workplace with five or more employees, to apply as a workplace with fewer than five employees. At ㄹ and ㅁ gas stations, which were operated with five or more employees, the company deliberately did not pay employees annual paid leave allowances and other benefits.

The Ministry of Employment and Labor found a total of 10 legal violations, including 182 million KRW in unpaid wages for 53 employees, after inspecting Company ㄱ. Immediate criminal recognition and a fine of 16.5 million KRW were imposed.

Company ㄴ, a manufacturing company employing about 100 people, has only paid the minimum wage level basic salary without bonuses for four years since June 2021, citing economic difficulties. The amount of unpaid wages has reached 600 million KRW. Including the previously penalized 3.4 billion KRW in unpaid wages, the total unpaid amount reaches 4 billion KRW (124 employees). The local labor office is conducting an investigation.

During the wage withholding period, Company ㄴ generated about 1.1 billion KRW in fixed monthly sales and about 1 billion KRW in annual operating profit. While continuously withholding employee bonuses, the CEO received a 20 million KRW bonus last year, and his younger brother, appointed as auditor, receives a high basic salary.

Kim Moon-soo, Minister of Employment and Labor, said, "Regardless of the scale of wage arrears, companies that deliberately evade legal violations or habitually withhold wages must be appropriately punished." He added, "We will establish a zero-tolerance judicial principle for companies that intentionally and habitually withhold wages and do our best to alleviate the concerns of workers suffering from wage arrears."