How Did Naver Become a Wage Arrears Company? The '52-Hour Workweek Dilemma'

[Asia Economy Reporter Boo Aeri] The IT industry is abuzz with discussions following the Ministry of Employment and Labor's announcement that Naver withheld wages amounting to 8.7 billion KRW. Some voices are calling for a flexible adjustment of the 52-hour workweek system to better reflect industry realities.

Earlier, on the 27th, the Ministry of Employment and Labor conducted a special labor inspection on Naver and revealed that over the past three years, the company failed to properly pay approximately 8.67 billion KRW in wages for overtime, night work, and holiday work allowances to current and former employees.

This has raised questions about the Ministry's inspection methods. In IT companies where talent is a key competitive advantage, neglecting 'compensation' essentially signals a willingness to fall behind in competition. Moreover, it is hard to understand how Naver, which granted stock options worth 1.2042 trillion KRW to employees over the past five years, could be involved in such an issue.

What is Naver's Work Style Like?

Naver operates a selective working hours system. Employees can set their own start and end times for work. Even those working less than the standard 40 hours per week do not face any salary deductions.

Naver provides various rest facilities within its headquarters, including cafes, hospitals, banks, and nap rooms. Employees autonomously determine whether the time spent using these facilities counts as break time, and the company does not intervene or verify this.

While Naver bowed its head, stating, "It seems there were some untracked overtime hours due to the limits of the autonomous work system," it also expressed that the recent investigation did not accurately reflect the reality of the selective working hours system. In a statement, Naver said, "There were no cases where overtime pay was unpaid when overtime work was requested," and added, "We will sincerely explain during the ongoing investigation and promptly take follow-up measures such as paying allowances for any violations."

Within the industry, it is widely believed that the Ministry of Employment and Labor likely compared employees' entry and exit records with internal work system logs. For example, if an employee logged out of the internal system at 5 p.m. but left the building at 8 p.m., it might have been counted as overtime. Critics argue that applying rigid standards like those used in manufacturing to IT companies?where freedom is guaranteed through breaks, internal meetings, and various amenities?is inappropriate.

52-Hour Workweek... Needs to Reflect IT Industry Realities

Nam Se-dong, CEO of AI startup VoyagerX, recently sparked controversy by publicly criticizing the 52-hour workweek regulation, warning it will lead to unintended future consequences. He likened the 52-hour system to a leveling down and kicking away the ladder, pointing out that complex procedures and regulations have been imposed on IT companies that operate on autonomy and responsibility.

There are calls for introducing flexible systems tailored to the characteristics of IT companies. An industry insider said, "There are times when we must be on standby 24 hours due to server failures or extremely busy periods before service launches," adding, "Instead of confining work hours to 52 per week, a flexible approach such as setting work hours monthly or quarterly is necessary."

Professor Kim Dae-il of Seoul National University's Department of Economics emphasized, "Time regulations are based on outdated ideas from the era of mass production of a few products," and stressed, "It is necessary to improve systems suitable for the innovation-driven IT industry to enhance effectiveness and reduce burdens on startups."

Meanwhile, regarding workplace harassment issues that triggered the Ministry of Employment and Labor's special labor inspection, Naver has apologized. The company stated, "We apologize to the deceased and their bereaved family," and added, "Regarding criticisms that management was aware of workplace harassment but took no separate action, we will provide additional explanations during the ongoing investigation."

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