Photo unrelated to article content [Getty Images]
Photo unrelated to article content [Getty Images]

The owner of a Paik's Coffee franchise in Cheongju who filed embezzlement charges against a part-time employee for taking three drinks has been indicted after authorities found he had illegally split his business operations and withheld wages from workers.

The Ministry of Employment and Labor on Monday announced the results of a roughly two-month targeted inspection of 33 cafe and restaurant franchise outlets in Cheongju, North Chungcheong Province, where the incident occurred.

The franchise owner, identified only as A, was found to have registered two separate businesses — a coffee shop and a dessert store — to circumvent labor regulations that apply differently based on workplace size.

The ministry found that A had withheld overtime, night-shift and holiday pay by falsely claiming his workplaces employed fewer than five people, and ordered him to pay back approximately 3 million won ($1,940) in unpaid wages owed to 49 workers.

Investigators also found that his employment contracts contained clauses effectively constituting predetermined penalty agreements — including provisions allowing the employer to seek damages based on lost sales if a worker breached the contract, and to pay only 90 percent of wages to employees who quit before completing three months. The ministry determined these clauses violated the Labor Standards Act and criminally indicted A.

After the initial case drew a flood of tips, the ministry expanded its probe to cover cafe and restaurant franchises across Cheongju. The wider inspection uncovered widespread failures in basic labor management — including missing or improperly maintained employment contracts and pay stubs — as well as violations of mandatory rest-break rules.

The ministry issued fines and corrective orders for the paperwork violations, and issued corrective orders for the wage theft and rest-break violations as well.

Using the case as a catalyst, the ministry has introduced measures to better protect the rights of young part-time workers. It has directed labor offices to conduct comprehensive investigations — rather than treating complaints as routine inquiries — whenever similar cases arise, and operates a 24-hour counseling service at ai.moel.go.kr.

"We will continue to respond firmly through inspections and other means against illegal conduct that violates the legitimate rights of young workers," Minister of Employment and Labor Kim Young-hoon said. "At the same time, we will strengthen education and outreach efforts so that employers do not break the law out of ignorance."


bbo@heraldcorp.com