Special Counsel Says “Day Laborers Working One Year Must Receive Severance”...Will “Continuous Employment” Be Recognized?

If Coupang Exercised Direction and Supervision,
Severance Pay Is Deemed Payable
Day‑Labor Contracts on a Daily Basis
The Key Question in Court Is Whether Subordination Will Be Recognized

By indicting former and current heads of Coupang Fulfillment Services (CFS) on charges of violating the Employee Retirement Benefit Security Act, Special Counsel Ahn Kwonseop’s standing investigative team has taken direct aim at the issue of whether platform day laborers are entitled to severance pay. The team has determined that severance must be paid if there was substantive direction and supervision, even when day-labor contracts are repeatedly renewed. In court, the key point of contention is expected to be whether their service will be recognized as “continuous employment.”

Coupang Headquarters. 2025.12.01 Photo by Yoon Dongju

According to the legal community on the 6th, the special counsel’s team on the 3rd indicted former CFS CEO Eom Seonghwan, current CEO Jeong Jongcheol, and the corporation itself on charges including violation of the Employee Retirement Benefit Security Act. Under the Act, a worker becomes eligible for severance pay if the continuous period of employment is at least one year and the average weekly working hours over four weeks is at least 15 hours.

The special counsel’s team views several circumstances as evidence of direction and supervision by Coupang in its capacity as employer: requiring day laborers to submit resignation letters, monitoring whether they worked within the 52-hour weekly limit, and compiling and managing so‑called “blacklist” rosters. The team has concluded that platform day‑labor workers also have the right to receive severance pay if their repeatedly renewed contracts exceed one year. Coupang, on the other hand, is denying the existence of a continuous employment relationship, citing the autonomy of its day‑labor workers.

The central issue is how to determine severance eligibility for day laborers. Because day‑labor contracts are formed and terminated on a daily basis and gaps in service easily arise, the trial is expected to focus on whether the regularity, continuity, and subordination characteristic of an employment relationship can be recognized. Attorney Kim Danyoung of Kim Danyoung Law Office said, “Coupang is likely to argue that, because an unspecified number of people rotate in and out of the work schedule, it is difficult to recognize ‘regular‑employee status,’” adding, “However, even for day laborers, the determination on severance could change if factors such as regularity of work and affiliation with the company are acknowledged.”

The legal community is also paying close attention to whether Coupang’s so‑called “severance reset rule” is unlawful. Coupang has been recalculating length of service from the beginning if, even once during the employment period, an employee’s weekly working hours fell below 15 hours. Attorney Kwon Gyubo of Majung Law Firm analyzed, “The severance reset rule is highly likely to be void as it violates the mandatory provisions of the Employee Retirement Benefit Security Act,” and added, “The key question will be whether Coupang exercised substantive direction and supervision in its capacity as employer.”

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