Labor Ministry cracks down on Gentle Monster operator, Samjong Accounting over 1.06 billion won in unpaid wages

The Ministry of Employment and Labor found a combined 1.06 billion won ($685,000) in unpaid wages and overtime violations at II Combined — the operator of eyewear brand Gentle Monster — and Samjong Accounting, following targeted labor probes triggered by allegations of long working hours and so-called "free labor."

The findings put a brake on the practice of withholding night and holiday pay — or failing to properly track working hours — on the grounds that employees were subject to a discretionary work arrangement. The government also announced it would expand its long-hours probe starting Thursday to cover workplaces authorized for special extended overtime and those operating shift systems.

The ministry announced the results of the targeted inspections Tuesday, citing 25 violations of labor relations law across the two companies. II Combined received 10 corrective orders and a fine of 5.8 million won, while Samjong Accounting received 11 corrective orders and a fine of 14 million won.

The most serious issue at both companies was the withholding of night and holiday pay under the pretext of operating a discretionary work system.

II Combined withheld a total of 430 million won in wages — including 340 million won in night and holiday pay owed to 279 workers under the discretionary work system and 90 million won in overtime, night and holiday pay owed to workers outside that system. Inspectors also flagged 115 cases of employees exceeding the statutory overtime limit, instances of pregnant workers performing night shifts, and insufficient paternity leave.

Samjong Accounting withheld 540 million won in night and holiday pay from 2,140 workers covered by the discretionary work system, with total unpaid wages reaching 630 million won when overtime, night and holiday pay for other workers and unused annual leave allowances were included. The firm also drew 35 violations for breaching overtime limits, along with findings of pregnant workers performing holiday shifts, failure to conduct sexual harassment prevention training, and violations of the Occupational Safety and Health Act.

The ministry determined that both companies' adoption of the discretionary work system was not in itself unlawful, based on a comprehensive review of worker representative election procedures and the degree of autonomy in the relevant roles. However, it made clear that even under such a system, companies must still pay night and holiday premiums, observe overtime limits, and comply with maternity protection rules.

II Combined identified operational problems in some departments during the inspection process and abolished its discretionary work system in February, switching to a flexible working-hours arrangement. The ministry recommended that Samjong Accounting improve its working-hours management framework during the busy audit season and put in place measures to protect workers' health.

The ministry attributed the root cause at both companies to their use of an all-inclusive wage system with a fixed overtime allowance while actual working hours went unrecorded and unmanaged. It directed both firms to address the misuse of such arrangements. Starting Thursday, the ministry plans to launch an expanded long-hours inspection campaign targeting workplaces authorized for special extended overtime and those running shift systems, focusing on compliance with statutory overtime limits and the payment of premium wages.

Deputy Minister of Employment and Labor Kwon Chang-jun said workers' health and lives can no longer be put at risk by excessive working hours. "We will use thorough inspections and strict law enforcement to correct workplaces that allow long working hours under the guise of professional expertise or all-inclusive wage arrangements," he said.