President Lee Jae-myung noted news that Hanwha Group had decided to pay bonuses to subcontractor workers at the same level as regular employees and called it a "desirable corporations culture." He also ordered a review of ways to improve the system through legal amendments or government enforcement decrees to prevent abuse of the comprehensive wage system.
On Feb. 11 at the Government Sejong Convention Center in Sejong, during a briefing by Minister Kim Young-hoon at the Ministry of Employment and Labor (MOEL) and the Ministry of Agriculture, Food and Rural Affairs' work report, Lee asked, "I heard Hanwha Group decided to give the same bonuses to subcontractors. Is that right?" Presidential chief of staff Kang Hoon-sik replied, "It will probably be reported today or tomorrow."
The remarks came as he pointed out Korea's comprehensive wage system and the problem of a dual wage structure.
Lee said, "There are many claims that the comprehensive wage system is being abused as a means of labor exploitation. Is there a practical solution?" The comprehensive wage system refers to a wage structure in which overtime, night, and holiday allowances are added in advance and paid as a fixed amount.
The Minister said, "It is true that it is difficult to fundamentally ban the comprehensive wage system," adding, "Where attendance records can be sufficiently kept, we will make recording mandatory so the comprehensive wage system is not misused or abused. Where records are difficult, we will guide employers to ensure it does not disadvantage workers."
In response to the Minister's answer that the comprehensive wage system is customarily allowed based on Supreme Court precedents, Lee said, "Even if there are precedents, how about reviewing a clear definition of the comprehensive wage system in the law?" He added, "Since an outright ban is not realistic, we should specify in detail when the comprehensive wage system is allowed, and if revising the law is difficult, couldn't we establish it through MOEL guidelines?" He then asked the ministry to "devise ways to institutionalize it or block it structurally."
He also mentioned the issue of the dual structure of the wage system. Lee said, "The regular employees of the original ordering company are paid the most, the nonregular workers of the ordering company are next lower, the subcontractors are lower than that, among subcontractors the regular workers are a bit higher, and women are paid even less. It is multilayered like this," and noted, "Some say this is because profits are skimmed through so-called cost cutting."
He then cited the case of Hanwha Group paying bonuses at subcontractors. Lee said, "It seems important to build such a desirable corporations culture and labor culture."