Labor Ministry Launches Special Inspection on Abuse of Comprehensive Wage Systems
The government is launching a special inspection focusing on workplaces that employ large numbers of young people, targeting the abuse and misuse of comprehensive wage systems. The aim is to correct unfair practices such as so-called "free overtime" and to encourage the establishment of wage systems that ensure workers are compensated in proportion to the actual hours they work.
The Ministry of Employment and Labor announced on the 25th that, starting on the 26th and continuing for about two months, it will conduct a "special inspection on the abuse and misuse of comprehensive wage systems" at around 100 workplaces in sectors with a high proportion of young workers, including services, information technology (IT) and software, and video and content production.
This measure follows growing social controversy as cases have continued to surface, particularly in service industries such as food and accommodation and bakery and confectionery, as well as at IT companies, where employers either fail to pay sufficient overtime, night work, and holiday work allowances, or reduce and evade statutory allowances by paying a fixed allowance regardless of the actual hours worked.
The inspection will focus on whether allowances based on actual working hours have been properly paid despite the use of comprehensive wage systems, and on whether working hours have been properly recorded and managed. The ministry plans to comprehensively verify compliance with mandatory entries in wage ledgers and payroll systems, consistency between employment contracts and pay statements, the appropriateness of calculating overtime, night work, and holiday work hours, and whether these calculations match the wages actually paid. In particular, it will use attendance records and time-and-attendance management systems to calculate actual working hours and will closely examine whether the corresponding statutory allowances have been paid.
If violations are identified as a result of the inspection, strict measures such as criminal prosecution or administrative fines will be taken in accordance with relevant laws and regulations. At the same time, for workplaces that demonstrate a willingness to improve their systems, the government will provide workplace innovation and co-prosperity consulting and support linked to private HR platforms, thereby encouraging a shift toward more rational wage structures. The government plans to continue ongoing inspections based on the inspection criteria, while also preparing and distributing detailed operational guidelines in the near future to minimize confusion on the ground.
In addition, preliminary investigations and follow-up management through anonymous reporting centers will be strengthened. Workplaces reported through the anonymous reporting channel, which is operated to protect workers concerned about having their identities exposed, will be classified as workplaces suspected of abusing comprehensive wage systems, and will be subject to ad hoc inspections or included in the targets for the second-half special inspection, thereby intensifying oversight. The government also intends to simultaneously promote the institutionalization of transparent recording and management of actual working hours and the improvement of fixed-salary systems, so that these labor-management agreement tasks can take root in workplaces.
Minister of Employment and Labor Kim Younghoon stated, "We will no longer turn a blind eye to the abusive practice of failing to record and manage actual working hours or failing to pay statutory allowances under the pretext of comprehensive wage systems," adding, "Even before new legislation is enacted, we will mobilize all administrative resources to correct unfair practices and ensure that a labor culture in which people are fairly compensated for the work they do takes firm root in workplaces."
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