Why the Lowest-Paid Public Institution Can't Even Receive Overtime Pay...

Small Enterprise and Market Service with One Employee Managing 10,000 Small Business Owners
Employees Sometimes Get Slapped and Cry... "It Breaks My Heart to See Such Staff"

A scene of emergency loan consultation for COVID-19 being conducted at the Seoul Jungbu Center of the Small Enterprise and Market Service.
[Photo by Small Enterprise and Market Service]

[Asia Economy Reporter Kim Jong-hwa] "Even though employees work overtime due to a surge in workload, we are unable to pay overtime allowances because of insufficient labor costs."

This is not a story about small business owners or small and medium-sized enterprises struggling due to the novel coronavirus infection (COVID-19) crisis. It is the reality faced by the Small Enterprise and Market Service (SEMAS), a public institution that supports small business owners. The complaint from a SEMAS official was hard to believe. Although the national economy is said to be in crisis due to COVID-19, has the state budget become so tight that it cannot pay allowances to employees due to a lack of labor costs?

SEMAS is a public institution that supports the overall economic activities of small business owners by directly lending small business policy funds to overcome the COVID-19 situation, supporting start-ups and growth, re-start support, revitalizing small manufacturers and traditional markets, and conducting policy research and surveys for small business owners.

SEMAS's budget for this year is a total of 8.8173 trillion won. The original budget was 2.8578 trillion won, but after four rounds of supplementary budgets, it increased to 8.8173 trillion won. Correspondingly, the workload has also increased. As of the end of October, SEMAS has 673 employees nationwide, including 66 Small Business Support Centers. Considering there are about 6.4 million small business owners in Korea, this means that, arithmetically, one employee is responsible for about 10,000 small business owners.

With the surge in workload, overtime work became inevitable, but due to the limited labor cost budget, payment became difficult. SEMAS was also unable to properly pay overtime allowances last year. As a result, employees took more leave, which increased the workload of those who did not take leave. This led to a vicious cycle of additional overtime work. Fortunately, this year, the Ministry of Economy and Finance and the Ministry of SMEs and Startups decided to allocate additional budgets. It is expected that the overdue overtime allowances will be paid around the end of the year.

Among SEMAS employees, self-deprecating jokes sometimes arise. This is because it was revealed again at the recent National Assembly audit that SEMAS's salary ranks last among the 11 public institutions under the Ministry of SMEs and Startups. As of the end of last year, the average annual salary of 340 public institutions was 67 million won. SEMAS's average salary is about 47 million won, which is 69.5% of that amount. It is about half of the top-ranked Korea Technology Finance Corporation (93 million won).

Has the relatively low treatment caused a high turnover rate? Over the past five years, SEMAS's turnover rate has been 18%. Although the role has become more important due to the increase in small business support policies, low treatment and harsh and difficult field conditions have not improved much.

This year, SEMAS requested an additional budget of 2.2 billion won to raise labor costs. If this budget passes the National Assembly Budget and Accounts Committee review, SEMAS's average salary will approach 73% of the public institution average. SEMAS had an unusually heavy field workload this year due to COVID-19. Some employees were even slapped and cried because they could not provide timely support to small business owners.

A SEMAS executive said, "Seeing those employees breaks my heart."

This content was produced with the assistance of AI translation services.