DAS, an auto-parts manufacturer whose largest shareholder is Lee Sang-eun — the elder brother of former President Lee Myung-bak — withheld more than 400 million won ($273,000) in wages from 351 employees, a Ministry of Employment and Labor inspection has found.
The inspection was prompted by a tip submitted to the government's anonymous reporting center for the abuse of comprehensive wage agreements and fixed overtime pay. The case is one of the clearest examples yet of a tip from the center leading directly to a large-scale wage-theft finding, and officials say it demonstrates the center's real-world effectiveness.
According to the Ministry of Employment and Labor and related agencies, the ministry's Pohang branch office conducted an inspection of DAS, based in Oedongeup, Gyeongju, North Gyeongsang Province, in June and found that the company had failed to pay 351 current employees more than 400 million won in holiday-work allowances and other wages. The branch issued a corrective order citing a violation of Article 56 of the Labor Standards Act.
A Pohang branch official said the inspection ran from June 10 to June 19, based on a tip received by the comprehensive wage and fixed overtime abuse anonymous reporting center, adding that the company had since complied with the corrective order to pay the 351 workers the outstanding holiday-work allowance differentials and that the matter was now resolved.
According to the corrective order, the ministry determined that DAS had failed to pay 351 current employees a total of 406.93 million won in holiday-work allowance differentials covering the period from June 1, 2023, through May 31 this year. The ministry ordered the company to pay the outstanding wages and submit supporting documentation — such as bank transfer records — confirming payment, with a compliance deadline of July 20.
Article 56 of the Labor Standards Act requires employers to pay at least 150 percent of the regular wage for overtime, nighttime and holiday work. The Pohang branch said its inspection found that holiday substitution procedures had been inadequately followed in some cases, and that certain departments had failed to properly comply with the Labor Standards Act in operating their comprehensive wage arrangements. However, the official said the corrective action was a remedial order for unpaid wages and did not constitute a finding of intent, adding that the focus had been on bringing the company into legal compliance given that various circumstances, including clerical errors, may have been involved.
The case illustrates the growing impact of the government's anonymous reporting center for comprehensive wage and fixed overtime abuse, which began accepting anonymous reports on comprehensive wage arrangements in February 2023. The center received 202 tips in the first half of this year alone — more than 2.5 times the 80 received in the same period last year and already surpassing last year's full-year total of 144. With the ministry expanding regionally targeted inspections based on incoming reports, further detections and corrective actions against workplaces abusing comprehensive wage arrangements are expected throughout the second half of the year.
Employment and Labor Minister Kim Young-hoon has been focusing policy efforts on eliminating wage theft, recently visiting the Supreme Court's Sentencing Commission to request tougher sentencing guidelines for wage-related crimes. Starting in October, amendments to the Labor Standards Act will raise the maximum penalty for wage theft from "up to three years in prison or a fine of up to 30 million won" to "up to five years in prison or a fine of up to 50 million won."
DAS has also drawn scrutiny on a separate front: in May, the company was placed on a government disclosure list for failing to establish a workplace nursery despite employing more than 1,500 regular workers. DAS is the only company to have appeared on that disclosure list 11 times for the same violation.
fact0514@heraldcorp.com
