These days, the main topic for corporations is expense reduction. In an effort to prepare for crises, corporations have been looking to cut costs, and thus news of voluntary retirements has increased this year-end. The general affairs teams of each corporation are struggling to come up with plans to tighten their belts. Some have even remarked, 'The business plans reported for next year at the end of this year contain no grand plans, only thoughts on how to reduce expenses.'
According to the retail industry on the 30th, amidst this atmosphere, Hyundai L&C, a green building materials company under the Hyundai Department Store Group, attempted to cut employee meal expenses but later withdrew the plan. This was due to stronger-than-expected resistance from employees.
Understanding the employees' perspective makes sense. This is because meal expenses were actually part of the annual salary. For instance, instead of a salary of 2 million won with a meal allowance of 100,000 won totaling 2.1 million won, it was structured as a salary of 2.1 million won with 100,000 won categorized as a meal allowance. This arrangement allows both the employee and the corporation to benefit from tax exemptions.
Meal expenses can be treated as tax-exempt up to 200,000 won per month. From the employees' standpoint, they will pay income tax and other taxes on the amount exceeding the tax-exempt portion. This allows for an effective increase in earned income. The corporation benefits similarly, as it can reduce insurance premiums while sharing the costs with employees, which also lowers income and local government taxes.
An employee of Hyundai L&C stated, 'Both the company and employees classified meal expenses separately from the annual salary to benefit from tax exemptions, so is it reasonable to unilaterally decide to cut them as true meal expenses now that costs need to be reduced?' Another employee remarked, 'In reality, this is a salary cut, but they are trying to do it subtly.'
The decision to replace meal expenses with lunch boxes from Hyundai Green Food is another reason for the employees' complaints. Following an appointment that aligned with the personnel changes at the Hyundai Department Store Group, the head of the food service division at Hyundai Green Food was appointed as the representative of Hyundai L&C. This led to unnecessary controversy, with criticisms suggesting that the new representative's role was to cut the salaries of Hyundai L&C employees to boost the sales of Hyundai Green Food.
From the employees' perspective, it is understandable to raise complaints. However, Hyundai L&C has its own arguments to make. The company contends that meal expenses originally were not intended to support meals, as they were meant for employees who had to dine out. If the company provides lunch boxes, it would count as supporting meals, and thus removing meal expenses would not be fundamentally correct.
Legally, that is indeed the case. However, in terms of practical operations, there may be discrepancies. There are instances when reality does not align, or when both the company and employees follow accounting treatments differently from reality to benefit both parties, which frequently occurs in corporate practices. Consequently, complaints may arise when changes occur. This is why labor attorneys are present in the labor market.
A labor attorney cautiously predicts that conflicts will escalate next year. Given the anticipated economic difficulties, there may be sudden voluntary resignations and unwanted transfers for employees who refuse to leave, leading to increased tensions. The dark economic outlook inevitably leads to such conflicts.
In any case, Hyundai L&C has decided to take steps to listen to the employees' voices. The conclusion reached was to not further discuss the cuts to employee meal expenses. A representative from Hyundai L&C stated, 'The practical departments reviewed the option of continuing to provide the meal allowance of 100,000 won as before or providing lunch instead, but ultimately decided to continue providing the meal allowance of 100,000 won.' However, they plan to tighten their belts in various other areas such as supporting group meals.
While expense efficiency is important from a corporate management perspective, it is hoped that the year 2025 will unfold without the need for conflicts over expense reductions. By this time next year, it is anticipated that there will be assessments indicating 'both labor and management navigated difficulties well, thanks to which life was bearable.'