Mr. A, a convenience store owner, recently received a letter from the local office of the Ministry of Employment and Labor (MOEL) that his store will undergo a labor inspection. Receiving the notice was quite disconcerting and he began trying to figure out if there were any issues with the payment of wages at his store.
What are labor inspections?
Workplace labor inspections refer monitoring and investigating whether a workplace is in compliance with labor laws. If legal violations are identified during the inspection, the workplace will receive an order to correct it or face punishment. There are three types of workplace labor inspections: periodic inspections, random inspections and special inspections.
Workplaces with poor working conditions are targeted by the MOEL for periodic inspections. Random inspections are conducted after labor laws have been legislated or revised after periodic inspections or there are social needs for additional labor inspections. Special inspections are for workplaces where labor disputes occur (or, are highly likely to occur) due to severe violations of labor law or labor contracts. Workplaces suspected of engaging in socially controversial activities are the usual targets of special inspections, such as those allegedly paying wages excessively late, employing illegally-dispatched workers, or discriminating against fixed-term or dispatched workers.
Recently, labor inspections have been increasing. The MOEL focuses on establishing basic employment standards at workplaces as a part of its policy priorities, specifically aiming to eradicate minimum wage violations, overdue wage payment and illegal worker dispatch. In addition to this, the MOEL will focus on strengthening occupational safety and awareness during inspections. Meanwhile, labor continues to report many violations at workplaces.
Workplace inspections are carried out by labor inspectors, who look for labor law violations and perform official duties as judicial police officers. This gives them the authority to investigate suspected violations and forward cases to the courts for legal action.
MOEL’s labor inspections
Recently, the MOEL conducted labor inspections on 12 game development companies with a focus on whether workers were required to work long hours. Through these labor inspections, 63.3% of workers were found to be working beyond the statutory working hours and a total of KRW 4.4 billion (or USD 4.08 million) of wages remained unpaid.
At the beginning of every year, the MOEL announces its labor inspection plans. It is important to be aware of these labor inspection plans, the targeted industries and workplaces and the focus of inspection.
According to the 2017 plans, the MOEL conducted labor inspections on about 20,000 workplaces with a focus on overdue wages, compliance with minimum wage regulations, and cooperative relationships between primary and subcontractors.
The MOEL conducted inspections on 4,000 franchise stores employing a number of young workers in each half of 2017 in its efforts to establish basic employment standards (mainly convenience stores in the first half and restaurants in the latter half) with a focus on minimum wage compliance and delays in payment. The MOEL has also strengthened labor inspections of 500 workplaces where many teenagers and on-the-job trainees with a view to addressing the problem of so-called ‘passion pay.’
The procedures followed before and during labor inspections
A labor inspection begins with notification of the workplace of the inspection schedule. This occurs at least 10 days prior to the inspection date. Before the date of inspection, the HR manager needs to have the necessary documentation ready, ensuring consistency and coherence in data and records and that no false reports are made.
On the date of the labor inspection, a labor inspector will visit the workplace and briefly explain the purpose of the inspection. Then, he/she will request the necessary documentation and inspect the workplace concerned. At this stage, the HR manager is required to cooperate fully with the labor inspection, but does not need to present documents that the labor inspector did not request. Violations identified during the labor inspection will be dealt with in accordance with due process of law.
Such violations can be divided into three types: ① violations to be corrected within a certain period, ② violations to be corrected immediately, ③ violations where a correction period is not permitted but punishment kicks in immediately. Essentially, not every violation is subject to punishment. For ① and ② above, the workplace simply needs to correct the violation and monitor for possible violations in the future.
Labor inspections are not one-time events. Workplaces which have already been inspected can be designated for re-inspection. It is not wise to go through a labor inspection without sufficient preparation and clear planning. Companies need to establish their own monitoring system to ensure compliance with labor law and correct any violations discovered at the workplace. Advice and consultation from outside is available for those unable to resolve these issues on their own.