Labor Ministry Finds Illegal Practices, Including Unpaid Overtime, at Gentle Monster Operator and Samjong KPMG

The Ministry of Employment and Labor has uncovered 12 violations of labor laws, including 430 million won in unpaid wages, following a special inspection into IICOMBINED, the operator of the popular domestic eyewear brand Gentle Monster, over allegations of overwork and unpaid labor.
The ministry also identified numerous violations at the accounting firm Samjong KPMG, where a series of deaths involving young accountants had occurred.
The Labor Ministry announced the results of its special inspections into IICOMBINED and Samjong KPMG today (July 1), both of which had faced allegations of exploiting the discretionary working hour system.
The inspection revealed that while companies must comply with regulations regarding night and holiday work, as well as restrictions on night and holiday work for pregnant employees, even when operating under the discretionary working hour system as defined by the Labor Standards Act, IICOMBINED failed to do so properly.
It was found that IICOMBINED failed to pay 430 million won in wages to its employees, including failing to provide mandatory additional pay for night and holiday work to employees under the discretionary system.
In addition, 115 cases of violations regarding overtime limits, such as working more than 12 hours per week, were discovered. The ministry also confirmed violations of maternity protection regulations, such as allowing pregnant employees under the discretionary system to work at night without authorization from the Minister of Employment and Labor.
The Labor Ministry issued corrective orders for 10 of the violations and imposed 5.8 million won in fines for two other violations, including the failure to maintain basic documents for wage determination and calculation.
However, the ministry stated that it was difficult to conclude that the overall introduction and operation of the discretionary working hour system for designer employees, who were the subject of the overwork and unpaid labor allegations, were illegal.
The discretionary working hour system is a scheme where, for tasks requiring significant employee discretion such as design work, the hours agreed upon in a written labor-management agreement are considered the working hours, regardless of the actual time spent working.
Nevertheless, IICOMBINED acknowledged instances of improper operation in some departments and replaced the discretionary working hour system with a flexible working hour system starting in February.
Furthermore, while not a violation of the law, the Labor Ministry recommended that IICOMBINED improve its overall labor management practices, noting issues such as the restriction of the number of employees allowed to take annual leave during certain periods.
The Labor Ministry's inspection also revealed 13 legal violations at Samjong KPMG, including a failure to properly adhere to night and holiday work regulations under the discretionary working hour system.
Samjong KPMG was found to have unpaid wages totaling 630 million won and committed 35 violations regarding overtime limits, such as working more than 12 hours per week.
The Labor Ministry issued corrective orders for 11 of the violations and imposed 14 million won in fines for five other violations, including the failure to conduct sexual harassment prevention training for 95 employees, including those dispatched overseas.
Furthermore, the Labor Ministry noted that due to the nature of the work at Samjong KPMG, the recording and management of working hours were not systematic, and there were many instances where actual overtime was not recorded. The ministry has taken measures to ensure proper compensation for hours worked.
Additionally, based on the results of anonymous surveys and interviews with employees, the ministry recommended that the firm establish a system for recording and managing working hours and measures to ensure the health of employees under the discretionary system.
The ministry also plans to promote follow-up meetings regarding overwork issues at major accounting firms.
To eradicate the practice of long working hours, the Labor Ministry will begin special inspections of 100 workplaces across the country starting today.
In these inspections, the ministry intends to thoroughly check for compliance with legal overtime limits and the payment of additional wages for overtime, night, and holiday work.
If violations such as exceeding working hours are discovered, the ministry plans to take judicial and administrative action in accordance with the Labor Inspectorate Service Regulations.
Minister of Employment and Labor Kim Moon-soo emphasized, "Long working hours not only threaten the work-life balance and health of workers but also have a negative impact on corporate productivity," adding, "We will certainly improve the unreasonable practice of long working hours in the field while providing government support."
※ Please note: This article was translated by AI and may contain errors.