Legal exploitation of migrants in South Korea

By Kim Aehwa

Last year, over 280 Chinese workers in a single textile factory located in South Korea demonstrated to demand payment of the legal minimum wage. The 280 workers were receiving as little as their counterpart workers in a subsidiary Korean-invested factory in China, where the cost of living is considerably less than in South Korea.

These workers transferred from the factory in China, which is owned by the same Korean company. The factory in China is in Qingdao city, Shandong province. In that factory there are around 1,000 Chinese workers who receive around Rmb350 (US$1 = Rmb8.3) per month, the Shandong provincial minimum wage. According to workers interviewed by AMRC, they believe that if they go to Korea, they can earn at least 10 times as much as they earn in China as a basic wage.

Because of this dream, they are not reluctant to spend at least Rmb10,000 (about 29 months’ salary) to go and work in Korea. They think it is advantageous to be recruited by their own company because the expenditure is less than applying to private agencies individually, and they get the same treatment as other migrant workers who go to Korea through private recruitment agencies contracted to the Korea Federation of Small and Medium Businesses.

Naturally they are angry on finding out that Korea has different regulations for different classes of migrant workers.The workers appealed to the labour ministry that the company should be forced to pay the legal wage and backpay of the difference between the minimum wage and what they had been receiving.

But the labour ministry interpreted the law to favour the company - that it is lawful for the company to pay less than minimum wages to Chinese workers who had entered South Korea since 2000. The ministry claimed this ruling was according to regulations governing payment of trainees who had transferred from Korean invested companies overseas.

The regulations concerning foreign trainees in South Korean-invested factories overseas were established to protect trainees working in overseas invested companies as much as other migrant workers in South Korea.
There are three types of migrant workers in Korea:

   1. undocumented (illegal) workers
   2. migrant workers registered as trainees by the Korea Federation of Small and Medium Businesses
   3. trainees from overseas invested companies

Among the three groups, it was discovered that workers in the last one were in the worst situation. There were no regulations to protect them until a new regulation to cover them was established in December 1999.

Workers from overseas invested companies are protected by the Industrial Accident Compensation Law and the Minimum Wage Act. But there is still a big legal loophole whereby workers who are paid by the original factory abroad can be paid the same wage as the workers there.
This allows Korean companies to use the legal loophole to exploit migrant labour.

In Korea the minimum wage is 40 percent of the Korean national workers’ average wages. In effect, Koreans will not work for such poor pay. The workers who it is really meant for are foreign trainees. This Korean factory employs Korean workers, normal migrant workers, and migrant workers transferred from overseas factories – all on different pay rates. Even though workers perform the same job, work the same hours under the same roof, three legal wage systems apply.

Compared to Korean workers, migrant workers usually get 60-70 percent, but migrant workers transferred from overseas factories get only 10-20 percent.