The Ministry of Employment and Labor announced on May 28 that it identified these businesses during a two-month oversight initiative aimed at eradicating the misuse of comprehensive wage systems, which began on February 26. The total amount of unpaid wages owed by these businesses is 448 million won.
Comprehensive wage systems are intended for limited use in sectors where calculating working hours is challenging. However, they have faced criticism for being exploited as a means to evade paying overtime. This raises concerns about the normalization of excessive working hours through fixed overtime or flat-rate allowances.
In response, the Ministry launched targeted oversight on 79 businesses suspected of misusing comprehensive wage systems, based on external complaints, petitions, and anonymous tips. Among these, 73 utilized fixed overtime, while six employed flat-rate pay systems. It was found that 43% of these businesses misused the comprehensive wage system.
Of the 34 businesses that violated overtime limits, many failed to manage overtime properly. Additionally, 27 businesses did not accurately record actual hours worked, including overtime, night, and holiday hours, violating labor time record-keeping regulations.
The government focused on confirming violations related to unpaid wages due to the misuse of comprehensive wage systems, as well as breaches of overtime limits and labor time record-keeping. For instance, a software development company paid only fixed overtime without verifying actual working hours. One cosmetics manufacturer failed to maintain any records of employee attendance while neglecting to pay over 100 million won in overtime and night work allowances.
The Ministry has ordered these violating businesses to rectify their labor time violations and pay all owed wages. Failure to comply will result in legal action. Businesses that have completed corrections will be subject to repeated oversight until all legal violations are resolved.
The Ministry of Employment and Labor plans to establish a continuous oversight system to prevent the misuse of comprehensive wage systems from being a one-time issue. Given the high detection rate of legal violations reported through the anonymous tip-off center, efforts to promote this reporting mechanism will be strengthened.
Minister of Employment and Labor Kim Young-hoon emphasized, "Ensuring that workers receive fair compensation is a fundamental principle for normalizing the labor market. Compensation for labor must not be denied under the guise of comprehensive wages."
* This article has been translated by AI.
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