Franchise cafes in Cheongju caught cheating 87 workers out of wages

A government labor inspection triggered by a coercion and intimidation case involving a young part-time worker at a well-known franchise cafe in Cheongju has uncovered a wave of labor law violations — including unpaid wages and illegal employment contracts — across dozens of local outlets.

The Ministry of Employment and Labor on Monday released the results of a roughly two-month targeted inspection of 33 franchise cafes and restaurants in the Cheongju area, launched after a youth worker rights violation case at a local franchise coffee shop in March.

The coffee shop that prompted the probe was found to have split its operations into two separately registered businesses — a coffee shop and a dessert store — under the same owner. The arrangement effectively created a single workplace with five or more employees while the owner withheld overtime, night-shift and holiday work allowances.

The ministry found that 49 workers at the establishment had been underpaid by a combined approximately 3 million won ($1,940) and ordered the employer to make corrections. It also confirmed that employment contracts contained clauses imposing liability for damages in the event of contract non-fulfillment, and a provision paying workers only 90 percent of their wages if they resigned within three months. Both clauses violated the Labor Standards Act's prohibition on predetermined penalty agreements, and the owner was referred for criminal charges.

The additional inspection of some 30 other franchise cafes and restaurants in the Cheongju area turned up further widespread violations of basic labor law.

The ministry confirmed that 87 workers had been underpaid a combined total of approximately 4 million won in overtime, night-shift and holiday premium pay, Labor Day paid holiday allowances and severance, and ordered employers to make corrections. Fines and corrective orders were also issued for failures to draw up employment contracts and pay statements, and for poor management of worker rosters and wage ledgers. Inspectors also found cases where workers who worked four or more hours were not given the legally required minimum 30-minute break.

An anonymous survey of 123 young workers conducted during the inspection shed further light on poor conditions at these workplaces.

Respondents said they had never received updated employment contracts when their working days or hours changed, and had never been given pay statements. The survey also revealed cases in which workers who stayed late were denied overtime pay on the grounds that they had chosen to remain voluntarily, workers left alone to manage a store were denied rest breaks, workers were pressured to come in on holidays, and wages were docked when workers left early.

The ministry said it would strengthen protections for young part-time workers following the inspection. It plans to revise case-handling procedures to require a full audit of unpaid wages whenever similar incidents arise, and to expand online monitoring using youth labor rights supporters.

Licensed labor attorneys will also visit franchise restaurants and cafes directly to offer voluntary consultations on improving working conditions, while outreach on how to respond to rights violations will be stepped up through youth centers and schools. The ministry also plans to expand labor education for small business owners by linking it to existing food hygiene training programs.

"Franchise cafes and restaurants are workplaces where many young people take their first steps into the workforce, yet there are still too many with poor labor management practices," Minister Kim Young-hoon said. "We will respond strictly through inspections and other measures against illegal conduct that violates the legitimate rights of young workers." He added that the ministry would also strengthen education and outreach "so that business owners do not break the law out of ignorance, and to prevent conflict between young workers and small business operators."