Over 9 in 10 minimum wage violation reports target firms with fewer than 50 workers

More than nine out of 10 minimum wage violation reports filed with the Ministry of Employment and Labor in the first half of this year involved workplaces with fewer than 50 employees, with businesses employing fewer than five workers alone accounting for roughly 68 percent of all complaints. Calls are growing for stronger labor inspections and more effective remedies to protect workers at small businesses.

Democratic Party of Korea lawmaker Park Hae-chul, a member of the National Assembly's Climate, Energy, Environment and Labor Committee, obtained data from the ministry Monday showing that 672 reports of minimum wage law violations were filed between January and June this year.

Of those, 459 came from workplaces with fewer than five employees and 166 from workplaces with five to 49 employees. Combined, businesses with fewer than 50 workers accounted for 625 reports — 93.0 percent of the total.

By contrast, workplaces with 50 to 299 employees generated 35 reports, and those with 300 or more generated 11. One report did not include workplace size information.

The share of reports involving workplaces with fewer than 50 employees has consistently risen. In 2018, such businesses accounted for 1,572 of 2,000 total reports, or 78.6 percent. That share climbed to 87.1 percent in 2023, 91.2 percent in 2024, 92.2 percent last year and 93.0 percent in the first half of this year.

Reports from workplaces with fewer than five employees have risen particularly sharply, growing from 49.1 percent of all reports in 2018 to 63.5 percent in 2024, 67.2 percent last year and 68.3 percent in the first half of this year.

A total of 750 cases — including those carried over from the previous year — were processed in the first half of this year. Of those, 724 involved violations of Article 6 of the Minimum Wage Act, which governs unpaid minimum wages, reductions below previous wage levels and the joint liability of contractors.

In terms of outcomes, 481 cases were closed administratively — through remedies, findings of no violation, non-appearance or referral — while 263 were referred for criminal proceedings. Of those, 223 received indictment dispositions, including partial indictments and suspended indictments.

Labor ministry inspections tell a similar story. Of the 180 workplaces found to have violated the Minimum Wage Act through inspections in the first half of this year, 36 had fewer than five employees and 103 had between five and 49, meaning businesses with fewer than 50 workers made up 77.2 percent of the total.

The 180 workplaces committed a combined 183 violations: 154 under Article 6, which covers unpaid minimum wages, and 29 under Article 11, which requires employers to inform workers of the applicable minimum wage. The ministry issued corrective orders in 180 cases and referred three for criminal proceedings.

"The minimum wage is the baseline workers must be guaranteed to live a dignified life, yet the vast majority of violation reports are concentrated in small businesses," Park said. "We need to tighten labor inspections and put in place effective institutional safeguards so that workers at businesses with fewer than five employees do not fall through the cracks."