The Ministry of Employment and Labor (MOEL) said on the 19th that, after conducting a planned inspection of 108 "fake 3.3 disguised employment suspect business sites," 72 business sites, or 67%, were found to have entered into fake 3.3 contracts.
A fake 3.3 contract refers to disguised employment in which a person who is in fact a worker signs a contract as a sole proprietor (freelancer) and is treated as having business income (3.3%). The aim is to avoid the application of the four major social insurances and labor laws.
According to the ministry's inspection, a total of 1,070 people had signed fake 3.3 contracts with 72 business sites. A total of 1,126 current and former employees were not guaranteed weekly paid holidays or annual leave, or were not paid holiday work allowances. Unpaid wages totaled 685 million won.
At one call center, in a representative case, all 277 trainees before regular hiring were reported as business income and were not enrolled in the four major insurances. In the process, violations such as falling below the minimum wage and nonpayment of weekly allowance and holiday work allowance occurred, and 147 million won in unpaid wages was uncovered.
At a logistics company, it was found that subcontracted workers worked under the direction and supervision of the prime contractor but worked without employment contracts and had portions of their wages deducted. The ministry determined this to be illegal dispatch, ordered direct employment for 54 people, and uncovered 24 million won in unpaid wages.
The ministry uncovered 256 legal violations at 87 business sites, including working-hours violations, failure to issue wage statements, and illegal dispatch. Of these, nine cases were referred for criminal charges, five were given fines, and 242 were ordered to be corrected.
Those not enrolled in the four major social insurances will be reported to the relevant agencies, and the ministry will pursue ex officio enrollment in employment and industrial accident insurance and retroactive imposition of premiums. Parts incorrectly reported as business income tax will be reported to the National Tax Service.
Minister Kim Young-hoon of the Ministry of Employment and Labor (MOEL) said, "We have confirmed the practice of disguising workers who should be protected as employees as sole proprietors," adding, "We will continue to strengthen inspections through cooperation with relevant ministries."