WeMakePrice faces probe over abuse of recruits

Internet users launch boycott campaign

By Park Si-soo

CEO Park Eun-sang

WeMakePrice, a major Korean social commerce website, will be investigated for allegedly exploiting 11 probationary employees last month.

The Ministry of Employment and Labor will start an investigation today, focusing on the company’s recruiting system. Officials said they would look into working conditions and whether the company had broken the minimum wage law.

They said Labor Minister Lee Ki-kwon ordered the probe amid mounting criticism over WeMakePrice’s alleged exploitation of recruits.

Internet users are boycotting the company, and about 32,000 people withdrew their membership from the online store on Thursday alone, according to industry sources.

“Those responsible for the problem may face criminal charges should the company be found to have seriously broken the law,” a labor ministry official said.

WeMakePrice has come under mounting criticism since Thursday when its alleged exploitation of 11 recruits was revealed by a cable news network.

The recruits were allegedly forced to work up to 14 hours a day for two weeks ㅡ even on weekends ㅡ in December. They were paid 50,000 won a day regardless of their working hours, but none landed a permanent job after the probation period.

Last year's legal minimum hourly wage was 4,860 won, meaning anyone who works for 14 hours should be paid at least 68,040 won. The minimum wage was revised to 5,580 won this year.

Some WeMakePrice managers were accused of having misled the recruits with “false” pep talks, saying their contribution had been “recognized” and that they were “very likely” to be hired permanently.

A WeMakePrice spokesman told The Korea Times that the probationary employees were supposed to work eight hours a day, but they had “voluntarily” worked 14 hours. He denied allegations of exploitation, but failed to explain the fixed wage, regardless of working hours.

A labor attorney said nothing could justify the fixed payment.

Amid growing criticism, WeMakePrice CEO Park Eun-sang decided late last week to hire all the recruits as part of efforts to contain public outrage. It is unknown how many accepted the offer.

Established in 2013, WeMakePrice is one of the biggest social commerce websites in Korea with 14.8 million registered customers.

Recent data showed that deals worth about 1.7 trillion won took place at WeMakePrice in 2013, from which the company posted 78.5 billion won in sales, a near three-fold increase from the year before.

However, the company posted a 36 billion won operating loss in 2013, which was blamed on aggressive marketing and promotional campaigns.

Meanwhile, the labor ministry said it will crack down on companies suspected of having exploited young workers.

The move comes as several well-known companies from various sectors have come under fire for allegedly having paid absurdly low wages to young workers hired without any prospect of becoming full-time employees.

The practice has earned the moniker, “passion pay,” as these apprentices and interns are expected to be “passionate enough to put up with poor treatment.”

The ministry it will soon decide which industries and companies to target and begin the special clampdown within the next two weeks.