1,070 Cases of 'Fake 3.3' Disguised Employment Uncovered... Unpaid Wages Reach KRW 685 Million

The government has uncovered that many businesses disguised workers as individual business owners in order to evade legal protections, following a targeted inspection of workplaces suspected of 'fake 3.3' disguised employment arrangements.

On March 19, the Ministry of Employment and Labor announced that it had conducted inspections at 108 workplaces selected based on data from the National Tax Service and filed reports, from December of last year through early this month. As a result, the ministry identified 1,070 cases of disguised employment at 72 workplaces.

Kim Younghun, Minister of Employment and Labor, is adjusting his glasses before speaking at the Ministerial Meeting on the Enforcement of the Revised Labor Union Act held on March 4, 2026, at the Government Complex Seoul in Jongno-gu, Seoul. Photo by Cho Yongjun

The workers found in violation were formally classified as business income earners (3.3%), which prevented them from enrolling in the four major social insurances and from receiving basic labor rights such as weekly holiday pay, annual leave, and overtime pay. The total amount of unpaid wages uncovered in the process was KRW 685 million, of which KRW 428 million has already been paid, while the remainder is still being settled.

Additionally, a total of 256 violations of labor laws were found, including breaches of working hours, failure to provide wage statements, and illegal dispatch of labor. Some cases have led to criminal charges, fines, and corrective actions.

By industry, disguised employment was confirmed across various sectors, including accommodation and food services, manufacturing, and wholesale and retail. At call centers, all trainees were treated as business income earners, resulting in underpayment below the minimum wage and unpaid allowances. At semiconductor subcontractors, most workers were found to be working without the four major insurances. In the logistics sector, the principal contractor exercising actual direction and supervision was ordered to directly employ the workers.

In particular, some businesses were found to have split their operations into units with fewer than five employees to avoid the law, or induced workers to choose reporting their income as business income, as a means of evading legal requirements.

The government plans to take action against violations of labor relations laws at the identified workplaces, as well as to enforce mandatory enrollment in the four major insurances and retroactive payment of premiums. Errors in tax filings will be reported to the National Tax Service.

Minister of Employment and Labor Kim Young-hoon stated, "We have identified the practice of disguising workers who should be protected as employees as individual business owners," adding, "We will continue to strengthen our oversight of actions that seek to evade the application of labor relations laws."

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