hankyoreh

Due to the blanket wage system

The employment contract of “K,” who works as a developer at an IT company in Seoul‘s Guro Digital Complex, mentions a “fixed overtime allowance,” which assumes two hours of overtime every day. This contract is an example of what is known as the “blanket wage system.” This might sound like a decent deal, since you get two hours of overtime pay every day regardless of whether you actually do any overtime, but K’s complaint is that he actually does a lot more overtime work than that. It’s common for him to work at the office later than 9 pm, and he also comes in to the office a few times a month on holidays. In other words, he’s working overtime for free.

“Since my employment contract stipulates that I can‘t request overtime pay, I can’t ask to be paid for the work I’ve actually done. I’d like to file a complaint with the labor board, but I‘m afraid they’ll figure out it was me,” K said in a telephone interview with the Hankyoreh on Mar. 29.

“N” provided “free labor” while working on a production line at a manufacturer in Seoul’s Gasan Digital Complex. It was only after N left the company that he was able to file a complaint with the labor board and receive the overtime pay he was due. He would frequently get text messages from company managers asking him to attend training that started 30 minutes before the regular work day. The company didn’t provide any compensation for training sessions or morning assemblies, even though these are classified as work time in the Labor Standards Act. N and eight other former employees at the company submitted their complaint in Apr. 2016, but they didn‘t receive an official order for payment of back wages for 30 minutes of “free work” from the labor board until Jan. 2017.

“During the consultations that I provide workers, I’ve seen plenty of flagrant violations of the Labor Standards Act because of employers’ disrespect and the Ministry of Employment and Labor’s poor oversight. It’s too bad that workers aren’t able to get the wages they‘re owed,” said Lee Gyu-cheol, chair of the organizing committee of Workers’ Future, an advocate for workers‘ rights in southern Seoul.

The pay workers don’t receive because of such “free overtime” is classified as back pay, too. Even though there was 1.4 trillion won (US$1.25 billion) in overdue wages in South Korea last year - the largest amount ever - the back pay for “free overtime” remains unknown unless it turns up in workplace inspections by the Ministry of Employment and Labor or is reported in complaints filed by workers. That’s why no estimate is made of the total amount of wages that workers are still owed.

After Daelim Industrial Vice Chairman Lee Hae-wook assaulted his chauffeur in Apr. 2016, the Employment Ministry carried out a special workplace inspection of the company as a punitive measure. During this process, the Ministry uncovered 4.42 billion won (US$3.958 million) in unpaid wages for overtime, evening and holiday work owed to 2,128 people. If not for Lee’s outburst, this would not have come to light, and workers would not have received around 2.07 million won (US$1,800) in back pay per person.

“Free overtime” is made possible by contracts based on the blanket wage system, and one problem with such contracts is that they lead to long working hours. The blanket wage system is widely used in the IT industry, and in a fact-finding survey of working conditions in the game industry carried out by the Korea Institute of Labor Safety and Health, 20% of respondents said they worked at least 52 hours a week, while 43% said they had to work on holidays at least once a month.

“The purpose of legislating overtime wages was to motivate employers to only have their employees work the legal working hours by making them pay higher wages for overtime. We believe that just paying overtime wages properly would represent significant progress toward resolving the problem of long working hours,” said Kim Yo-han, a labor attorney at the labor legal support center at the Seoul office of the Korean Confederation of Trade Unions (KCTU).

Just because a worker has signed a contract under the blanket wage system does not prevent them from receiving overtime wages. Labor advocates argue that employers should be required to keep a record of when employees arrive at work and when they leave and to provide workers with a pay slip that itemizes their wages by category.

A bill has also been submitted to the National Assembly that would outlaw the blanket wage system. The revision to the Labor Standards Act submitted by Justice Party lawmaker Lee Jung-mi on Mar. 23 would ban work contracts that do not distinguish between overtime work, regular work and holiday work -- or in other words, contracts based on the blanket wage system.

By Park Tae-woo, staff reporter

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