Krafton Warned by Ministry of Employment for Delaying Employee Salaries

Sanctioned for Wage Arrears, Violations in Pay Statements
"Large in Scale... Yet Lacking in Basic Labor Management"

Crafton, a game company that surpassed 1 trillion won in operating profit last year by leading with the globally popular game ‘Battlegrounds,’ has been repeatedly caught by relevant authorities for failing to pay employees' wages on time. The company also received correction orders from the Ministry of Employment and Labor for not properly disclosing salary details. Over the past three years, Crafton and its subsidiaries have been sanctioned by the Ministry of Employment and Labor a total of 10 times due to wage arrears and other issues.

According to Crafton's 2024 business report released on the 3rd, its software development subsidiary ‘Overthere Korea’ was pointed out by the Ministry of Employment and Labor in September last year for not paying unused annual leave allowances to some employees. Under the current Labor Standards Act, employees who do not use all their annual leave within a year must receive compensation for unused leave. However, this subsidiary failed to pay the allowance, resulting in wage arrears.

Crafton's game development studio Bluehole Studio faced issues in February last year regarding unpaid wages to retirees. When an employee leaves, the company must pay the final salary, retirement pay, performance bonuses, and unused annual leave allowances within 14 days. However, the company did not pay the unused annual leave allowance to an employee two weeks after their resignation.

Another game development subsidiary, ‘Flyway Games,’ was caught by labor authorities for underreporting employee retirement benefits. The company did not include unused annual leave and compensatory leave allowances in the company’s contribution to the defined contribution (DC) retirement pension. Authorities maintain that these allowances must be included in the retirement pension contributions.

Violations were also found in pay statements. Some wage statements issued by Overthere Korea and Bluehole Studio to employees showed only the amounts without detailing the calculation methods for each wage item. According to current law, pay statements must include the calculation methods based on attendance days and working hours, but this was not followed.

Crafton’s headquarters also revealed poor labor management practices at the end of 2022. The company gave fewer compensatory leave days to employees who worked on holidays and reduced retirement pay by excluding unused paid annual leave allowances from the defined contribution retirement pension contributions. Additionally, Crafton was ordered to correct its practices for neglecting the operation of labor-management councils and failing to appoint grievance committees.

Although Crafton included these cases in its business report and promised "completion of sanctions compliance" and efforts to prevent recurrence by "strengthening management of legal compliance," these promises remained mere words.

Considering that Crafton recorded its highest-ever operating profit exceeding 1 trillion won last year, the industry views these behaviors as structural problems. Unlike major domestic game companies, Crafton has maintained a ‘no-union management’ policy and continues to enforce a fixed overtime (OT) system, which is cited as a primary cause of long working hours in the IT industry.

Seongpil Lee, a certified labor attorney at Labor Law Firm Bau, diagnosed, "Despite being a company of considerable size, it appears that basic labor management is not in place. If management is lacking, there is a risk that issues could escalate to performance bonuses and other incentives in the future."