[Reporter’s Notebook] Behind the Controversy Over Overtime Pay at the Financial Supervisory Service

Financial Supervisory Service Regular Employees Increase by 6.7% (114 People)
Labor Cost Rise Only 1.3%
FSS Faces Difficulty Securing Budget Independently
Financial Services Commission Holds Budget Authority
Additional Labor Costs Possible Through Contingency Fund Use
However, Disadvantageous for Management Evaluation

Money is always the issue. The Financial Supervisory Service (FSS) has also been in turmoil recently because of money. Earlier this month, the FSS notified its employees that overtime pay (night shift allowance) would be cut by half. This was due to a surge in employees' overtime work following a series of major issues since January, including Taeyoung Construction, real estate project financing (PF) restructuring, and the Tmon and Wemakeprice incidents. In fact, as of the first half of this year, overtime work by FSS employees increased by about 16% compared to the same period last year. As a result, 75% of the personnel budget was exhausted by August this year.

Young employees from the MZ generation are particularly dissatisfied. According to regulations, FSS department heads (director level and above) do not receive overtime pay. Team leaders receive annual leave instead of allowances. Only regular employees below the senior level receive overtime pay. In other words, if overtime pay is cut in half, junior employees will effectively see a reduction in their wages. The FSS has stated that it will pay all overtime allowances but, considering budget constraints, will provide annual leave at the end of the year.

Why did this situation arise? On the surface, it is largely due to the additional hiring of regular employees at the FSS this year. As of June, the FSS had 1,795 regular employees, an increase of 6.7% (114 people) from 1,681 in September last year. During the same period, the number of non-regular employees (including fixed-term contract workers) remained the same at 612, with only regular employees increasing. Meanwhile, the personnel budget was set at 246.695 billion KRW this year, only 1.3% higher than last year's 243.352 billion KRW.

Would securing more budget solve the problem? It is not a simple issue. The FSS budget is funded by supervisory fees collected from financial companies. This budget is determined by the Financial Services Commission (FSC). Although the FSS is not a public institution, it follows budget guidelines similar to those of public institutions. Even if the workload increases explosively and more employees are hired, the structure does not allow for additional personnel expenses to be secured.

Using contingency funds for additional allocation is also an option, but the problem remains. This is merely a case of cutting one's own flesh. A financial authority official said, "If contingency funds are used due to budget shortages, there could be disadvantages in management evaluations," adding, "In such cases, the wage increase rate and performance bonus determination for FSS employees next year could be negatively affected."

The FSS’s workload has significantly increased as its supervisory and inspection scope has expanded to include virtual asset operators and other areas, along with organizational growth. It is unreasonable to assign greater responsibilities and roles to the organization while keeping resources at past levels. The FSC should step in to secure a budget appropriate for the size of the staff, or if contingency funds must be used, the management evaluation (qualitative evaluation section) method should be changed to avoid disadvantages.