Costco hit for poor work conditions

Cars line up to enter a Costco Wholesale Korea's store in Sejong in this Aug. 31 file photo. The U.S. warehouse club's local subsidiary has been accused of having poor working conditions. / Yonhap

U.S. retail giant likened to notorious Carrefour

By Park Jae-hyuk

Costco Wholesale Korea is facing growing criticism for allegedly violating the country's Labor Standards Act, according to company employees, Tuesday.

In August, a petitioner, who claimed to be the wife of a Costco manager, posted a petition on the Cheong Wa Dae website detailing the U.S. retailer's “unlawful” working conditions, saying that “My husband has not been paid for his extra work, although he works over 70 hours a week.”

She insisted the U.S. warehouse club's local subsidiary has forced store managers and other senior employees to work overtime because they are not subject to an electronic time card system that checks employees' working hours. Only rank-and-file workers are required to use the system.

“The company has been uncertain about my husband's working hours, and it has not compensated him for his overtime,” she said. “He has not been paid for his night shifts and has had to work without a break.”

If her claim turns out to be true, Costco will be punished for breaching the Labor Standards Act. The law states that management must pay a worker's overtime.

It has also limited the maximum workweek to 52 hours since July, following the Moon Jae-in administration's labor-friendly policy.

As of Tuesday, more than 1,780 people signed in and supported her petition.

Some of the supporters, who appear to be Costco employees, posted messages criticizing the company's hierarchical corporate culture which is more like the organizational structure of the military.

They even likened the global retail giant to Carrefour, the French discount chain which left Korea in 2006 after a severe conflict with its union over poor working conditions.

The Korea Times asked Costco about this issue, but Koo Seon-mi, head of the company's marketing team, said, “You should contact our call center for the company's official comment.” The call center did not answer the phone.

This is not the first time that Costco has been criticized for its negligent attitude toward Korean law.

Earlier last year, the company was fined 50 million won ($44,850) for not following the Ministry of SMEs and Startups' recommendation to postpone the opening of its Songdo store in Incheon to protect local merchants.

In 2016, it was rated “poor” in the Korea Commission for Corporate Partnership's index measuring the degree of large firms' growth-sharing with small business partners, because it did not participate in the evaluation on whether it fulfilled agreements for fair trade and promoted mutual growth with its smaller suppliers.

Costco Korea was also fined 10 million won in 2012 for violating the Seoul Metropolitan Government's order to close its stores twice a month.

In addition, the Ministry of Food and Drug Safety issued four corrective orders to the retailer within this year, because of foreign substances detected in the food it sells.

However, Costco Korea's country manager Cho Min-soo stated that his company's mission is “observance of the law,” during a National Assembly audit last year.