Seoul calls $2,000 monthly penalty clause 'potential human trafficking' in demand to Uzbekistan

The South Korean government has labeled a memorandum requiring Uzbek workers at Ulsan shipyards to pay $2,000 per month in penalties if they change workplaces or quit as "a highly unjust measure with potential for human trafficking," and has formally demanded that Uzbekistan correct the practice.

The Ministry of Employment and Labor had previously said the memorandum was a system independently operated by the Uzbek government to prevent workers from leaving their posts, and that Seoul had not been aware of its existence beforehand. The ministry said it was verifying the facts at the time. The demand for improvement came after investigators confirmed the problematic nature of the document.

According to the Korea Migrant Workers' Human Rights Center, known as Oenokhyop, the ministry confirmed that the Agency for External Labor Migration under Uzbekistan's Ministry of Employment and Labor had required workers entering South Korea under the Employment Permit System to sign memoranda pledging to pay $2,000 per month in penalties if they changed jobs or workplaces.

The ministry characterized the practice as "an unjust restriction on workplace transfers that runs counter to the purpose of the Employment Permit System, and a highly unjust measure with potential for human trafficking," and called on the Uzbek government and related ministries to make immediate corrections and improvements.

The memoranda were applied to Uzbek workers who entered South Korea through a pilot program to train foreign workers tailored to the shipbuilding industry, which the ministry and Ulsan city pursued during the Yoon Suk Yeol administration to address labor shortages in the sector. As of June, 385 Uzbek workers had been placed at Ulsan shipyards through the program.

Oenokhyop welcomed the government's action but said the matter should not be treated as a problem unique to Uzbekistan. The group said "departure deposits and job-transfer penalties constitute clear labor exploitation and human trafficking," adding that large penalty clauses can serve as a tool that prevents workers from leaving even when they face forced labor, unpaid wages, assault or other unjust treatment.

The legal questions surrounding the case have also broadened. Earlier concerns had been raised about possible violations of workplace transfer rights under the Foreign Employment Act and the prohibition on forced labor under the Labor Standards Act. Oenokhyop additionally cited Article 20 of the Labor Standards Act, which prohibits contracts that predetermine penalties or damages against workers for failing to fulfill a labor contract.

The group also said the practice should be examined under the UN Protocol to Prevent, Suppress and Punish Trafficking in Persons and South Korea's domestic anti-trafficking law, to determine whether it constitutes labor exploitation through economic coercion.

Oenokhyop said similar problems are emerging in the seasonal foreign worker program for agricultural and fishing communities.

The group said brokers have intervened in the process of bringing in foreign seasonal workers at some local governments, or demanded "departure deposits" of several million to tens of millions of won by holding workers' land or bank accounts — or those of their families back home — as collateral.

Oenokhyop said that if the ministry addresses only the job-transfer penalty under the Employment Permit System while ignoring the departure deposit problem for seasonal workers, the response will amount to "a half-measure."

Accordingly, Oenokhyop called on the government to abolish the job-transfer penalty memorandum with Uzbekistan, conduct a probe into job-transfer penalties and departure deposits across all countries sending workers under the Employment Permit System, carry out a full investigation into departure deposits and collateral contracts for seasonal workers, and punish illegal brokers and those involved. The group also said the government should consider administrative measures — including revoking Uzbekistan's designation as a sending country — if Uzbekistan does not abolish the memorandum.