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Coupang's subcontractors caught employing over 40,000 uninsured workers
Coupang's delivery vehicles are parked at a parking lot in Seoul, June 13. Yonhap
By Jun Ji-hye
E-commerce giant initiates contract cancellations with violators
Over 40,000 workers at 90 delivery subcontractors of Coupang have not been provided with employment insurance and industrial accident insurance, which are considered major social security nets offered to laborers, according to the Korea Workers’ Compensation and Welfare Service (K-COMWEL), Wednesday.
K-COMWEL, which is under the direct control of the Ministry of Employment and Labor, announced the findings of an investigation into 528 delivery subcontractors and 11 logistics subcontractors that signed contracts with Coupang Logistics Service, the subsidiary of the Korean e-commerce giant.
The investigation was carried out from Dec. 20 to May 30 and looked into cases for the past three years.
K-COMWEL said it discovered 90 delivery subcontractors had failed to offer proper social insurance services to a total of 40,948 workers. Among them, 20,080 workers were not provided with employment insurance, while 20,868 workers were not offered industrial accident insurance.
Given that there is a significant overlap between laborers covered by employment insurance and industrial accident insurance, the number of workers affected by the insurance provision failure of Coupang's subcontractors was approximately 20,000.
Korean laws oblige all workplaces, which have even one employee including temporary and part-time workers, to offer the social insurance within 14 days since the worker has been employed.
Following the investigation, K-COMWEL has ensured that the subcontractors in question provide proper insurance coverage to these uninsured workers.
It also plans to impose 4.74 billion won ($3.4 million) in unpaid insurance premiums, which should have been paid if these subcontractors had insured the workers at the correct time, along with a fine of 296 million won.
“Employment insurance and industrial accident insurance must be offered regardless of the size and type of workplaces,” K-COMWEL President Park Jong-kil said.
“We will continue to investigate similar industries to prevent a recurrence of failures to insure workers,” he added.
The investigation was initiated after a subcontractor operating Coupang’s logistics center was found to have requested employees to sign documents waiving their rights to be provided with industrial accident insurance last year.
Through this practice, company owners typically aim to evade compliance with labor laws or the responsibility of paying for insurance coverage.
Regarding the results of the investigation, Coupang said cases of uninsured workers were linked not only to its subsidiary but also to other logistics companies, citing that the probe examined incidents over the past three years.
“Even before the investigation began, we have consistently encouraged our subcontractors to insure workers,” a Coupang official said.
“We have already undertaken the process to cancel contracts with some subcontractors that have not offered sufficient insurance services to workers.”