According to industry sources on the 29th, Laina Life paid a salary on January 25th, and paid a considerably smaller amount than usual to some employees (employees and agents who joined from the end of 2017 to the end of 2018). The reason is that the’deferred annual compensation’ paid in the past was deducted by the amount that was paid in excess. All that was reported to the employee on the 24th was the company’s email notification.
The problem is that this situation was entirely caused by administrative errors by the management.
Prior to 2017, annual leave was normally guaranteed from one year after joining the company, but the 2017 Labor Standards Act was revised because the right to rest for workers was not guaranteed. The main idea of the revised bill is to ensure that even workers with less than one year can receive an annual leave of up to 11 days if the rate of attendance after joining is 80% or more.
Even before the revision of the law, Laina Life has already guaranteed 15 days of annual leave for employees who have been employed for less than a year. The problem is that after the revision of the law, an annual leave of 11 days was duplicated due to administrative error, guaranteeing an annual leave of 26 days for those who entered less than one year. Unused annual leave was paid as compensation. The company, which caught the administrative error belatedly, deducted 11 days’ worth of compensation from the compensation paid at this time. More problematic is that the redemption procedure was not applied retroactively, so the redemption procedure was carried out only for some employees, not all overpaid employees, and a large number of employees with a redemption scale of around 1 million won. As such, the backlash from employees is great.
Lee Jeong-in, labor manager Lee Sang-in, said, “In principle, according to Article 43 (Wage Payment) of the Labor Standards Act, wages are paid in full. Can be.” He added, “As the amount equivalent to one-half of wages is prescribed as a bond with no seizure, it is illegal if more than one-half of the salary is deducted.”
As the backlash from employees grew, Laina Life gathered the targets and held an urgent briefing session on the 27th. It was a place to acknowledge the administrative error of the management. In addition, measures were taken against employees who had deducted a significant amount.
An official at Laina Life said, “We plan to provide a plan to deduct the deducted amount only to the applicants and deduct it when paying incentives in March, or to deduct in installments over six months to one year.”
Meanwhile, on the morning of that day, CEO Ji-eun Jo prepared a meeting to directly explain the controversy to employees. It is reported that Cho has apologized for the process of redeeming the overpaid annual compensation and mentioned the solution.
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