In our previous newsletter dated March 17, 2023 (Link), we noted that the Ministry of Employment and Labor (“MOEL”) is expected to focus its labor inspections in 2023 on particular issues, employee groups, and industries and that the government is proactively using labor inspections as a compliance tool.
 
On April 6, 2023, the MOEL announced that it would conduct labor inspections on businesses that are suspected of misusing or abusing the comprehensive wage system or the fixed overtime allowance.
 

1.   Businesses Suspected of Misusing/Abusing Comprehensive Wage System or Fixed Overtime Allowances
 

During the past two months, the MOEL received anonymous reports alleging that certain businesses have misused/abused the comprehensive wage system or fixed overtime allowances.  The MOEL then selected 87 businesses for potential labor inspections.  The MOEL announced that it would conduct labor inspections on the selected businesses over the next two months.
 
In its announcement, the MOEL cited, among others, “failure to pay overtime allowances without properly recording working hours, failure to pay overtime allowances for working hours in excess of the compensated overtime hours under any fixed overtime allowances, uncompensated overtime work that exceeds the maximum overtime hours (i.e., 12 hours per week), and interference with the use of annual paid leave” as examples of the alleged misuse/abuse, and announced that it will focus on these particular issues in the upcoming labor inspections.  Further, the MOEL will conduct surveys and interviews with employers and employees subject to labor inspections to ascertain the status of any misuse/abuse.
 
In addition, the MOEL plans to target certain industries, such as the IT, office management, finance, and broadcasting and telecommunications industries, where claims of misuse/abuse of the comprehensive wage system or fixed overtime allowances are frequently raised.
 

2.   Businesses Suspected of Long Working Hours
 

In addition, between April and June 2023, the MOEL will conduct labor inspections on 300 businesses in 21 industries, such as the manufacturing, IT, financial insurance, storage and warehouse, and telecommunications industries where workers may endure long working hours.  The MOEL plans to examine potential misuse/abuse of the comprehensive wage system and/or fixed overtime allowances, while also conducting labor inspections on long working hours.
 

3.   Conclusion
 

Given this labor inspection trend, companies need to ensure their compliance with applicable labor laws, particularly concerning the issues that the MOEL is focused on.

[Korean Version]