hankyoreh

Early on the morning of Mar. 7

one temporary worker waits in the hope of finding work for the day outside of a temp agency in Seongnam

High profitability is the simple reason so many temp agencies are springing up. According to accounts from numerous agency sources on Mar. 6, “maintenance cost” commissions to agencies from the supply of dispatch workers are set between 4 and 12% of wages paid to them. With production dispatch positions paying 1.5 million won (US$1,260) a month for daytime labor and 2 million won (US$1,680) for combined day and night shifts, the commissions come out to anywhere from 60,000 to 250,000 won (US$50-210) per worker. Agency sales and profits end up proportional to the number of workers dispatched.

The businesses also end up making other, illegal profits besides commissions. Kim In-seong, an administrative worker for over three years at one Incheon-area temp agency, said a greater portion of total sales comes from money siphoned off from “major insurance expenses.”

“The employers [who temporarily hire the dispatch workers] give the agencies money for the four mandatory forms of insurance [the national pension, industrial accident insurance, employment insurance, and national medical insurance] along with the workers’ wages, but that money is rarely used to actually enroll them,” said Kim.

“Expenses for the four types of insurance come out to about 130,000 won (US$110) for production workers. Essentially, the agencies are pocketing almost all of it,” Kim added.

In many cases, the agencies approach workers who are grateful for any money they can earn and offer to give a portion of the insurance payout in exchange for them not enrolling.

“And there are other ways of dipping into the workers’ share, including deductions for hourly wages and allowances,” Kim continued.

“The agencies working today maintain around 300 to 500 dispatch workers each, and I‘ve heard that the monthly take from commissions and insurance costs is around 200 to 300 million won (US$168,000-252,000).”

Words about the potentially large take have resulted in stiffer competition as more and more temp agencies pop up.

“It’s tough to get many dispatch contracts unless you’ve got connections with the companies doing the hiring,” said Lee Jae-hyeong, an employee at another Incheon-area agency.

“Recently, we’ve seen a kind of ‘intrapreneuring’ business model take shape where former executives with the hiring companies retire and use the connections to set up their own agencies,” Lee added.

Gyeonggi Province. (by Park Jong-shik

Not all of the agencies engage in strictly legal business. According to current law for dispatch hiring, workers can only be used in 32 job categories, including cleaning, security, and parking attendant positions. Production process duties at manufacturing companies are subject to especially strict bans.

But many of the agencies do business openly with the manufacturers. Most of the ads placed on job information sites like Alba Paradise and Albamon [“alba” is a Korean term for part-time work, derived from the German word “Arbeit,” which means work] for production positions were put there by temp agencies.

A Hankyoreh reporter contacted one of the agencies that advertised for production positions on Alba Paradise to ask for job-search counseling.

“We‘ve got semiconductor assembly line and mobile phone parts factory positions available. Where would you prefer to find work?” was the reply.

Indeed, most job advertisements that don’t clearly indicate the form of employment contract - giving listings such as “part-time/regular/contracted” or “five-day week production/assembly positions” - are likely to be from temp agencies.

Agencies are even advertising what appear to be illegal manufacturing industry dispatch positions out in the open on WorkNet, a job information site run by the Ministry of Employment and Labor - a sign that they don’t fear a potential crackdown by the authorities.

“Do you know many actual inspectors they have altogether for illegal dispatching, industrial disasters, and illegal labor practices?” asked Lee.

“From the agencies’ standpoint, they‘re far more scared of losing contracts and connections from the hiring companies than any kind of labor oversight from authorities.”

Agencies that are caught because of industrial accidents or government crackdowns will sometimes offer up a fall guy and close down for six months to a year before reopening under a different name.

“If there’s an accident and one of the dispatch workers is seriously injured or killed, their first step is to shut down, no questions asked,” Lee said.

With both employers and agencies using illegal dispatch work for their own interests, the workers themselves end up living being permanently irregular.

“I‘ve been working for more than a year now at a company that makes display panel parts, and in that time the agency the labor contract was with has changed three times,” said a 37-year-old Incheon-area dispatch worker surnamed Song.

Manufacturing companies are barred from using dispatch labor; even legally contracted dispatch workers have to be hired directly after over two years. But the real situation on the ground is typically more like Song’s.

Dispatch employment law also grants manufacturing businesses an exception, allowing them to hire dispatch workers for up to six months “in the event of staff shortages due to childbirth or illness or temporary and/or intermittent need to acquire workers.” It’s this provision that is abused in cases like Song’s, with companies changing their names to sign six-month employment contracts with workers.

“In many cases with companies that do a lot of illegal dispatch business, the owner will be overseeing a number of different agencies with a lot of ‘paper presidents,’” explained Kim In-seong.

“They can keep sending out the same workers, and they won‘t be identified as illegal provided that the temp agency they’re with gets changed every six months.”

According to sources, some agencies have tried to prevent companies from hiring their dispatch workers to full-time positions in order to keep up their own “sales,” or worker numbers.

“The agencies’ position is that they need to keep dispatch periods long so that their sales increase, so they don’t want dispatch workers being hired full time,” said Kim.

“There are cases where if a company says, ‘We’d like to hire dispatch workers for three to six months and then take them on full time,‘ the agencies won’t send them workers.”

As a consequence of this process, small-scale manufacturing businesses that are short on personnel and labor management come to rely on worker supplies from the agencies - and end up compelled to keep using dispatch workers at the agencies‘ request instead of hiring full-time staff.

To be sure, actual incidents of companies using dispatch workers for just three to six months before hiring them full time are extremely rare.

“The common wisdom on the ground here is that companies will hire you as a dispatch worker for six months [the legally allowed period for manufacturing businesses], then four times for six months each as a short-term worker, and three months after that for training [before official hiring], and only after that base period of two years and nine months will they even begin to think about actually hiring you full time,” said Lee Jae-hyeong.

With all the hurdles in the way, the gateway to a full-time job ends up looking more like the eye of a needle.

By Noh Hyun-woong, staff reporter

Please direct questions or comments to [english@hani.co.kr]

Temporary cleaning workers at an apartment complex in Seoul. (by Lee Jeong-yong, staff photographer)

　Early on the morning of Mar. 7, one temporary worker waits in the hope of finding work for the day outside of a temp agency in Seongnam, Gyeonggi Province. (by Park Jong-shik, staff photographer)

　The number of temp agencies in South Korea