Salon A, which operates more than 250 franchise locations nationwide, is suspected of running three of its Daegu branches as a single workplace. B, the de facto representative, has gathered hair designers from all three branches into a single KakaoTalk group chat, where he not only receives sales reports but also issues detailed work instructions. Following B's directions, the designers move between branches to work and receive their wages split across multiple locations. The situation is similar at Salon C in Cheonan. D, the owner there, runs two branches as one workplace. Interns hired at each branch are shifted between locations whenever D directs, regardless of their own wishes. Although they are employees under the Labor Standards Act (LSA), they face a double disadvantage — being treated like self-employed individuals at workplaces with fewer than five employees.
The practice of hiring employees as freelancers to strip them of LSA protections and forcing them to work at disguised under-5-employee workplaces continues to persist. Labor circles estimate there are roughly 150,000 such disguised small workplaces across the country. Critics say the government has failed to properly inspect these illegal workplaces.
The Association of Labor Attorneys for Labor Human Rights (Nonomo), the Justice Party, and Platform Labor Hope Search held a press conference in front of the Seoul Regional Employment and Labor Office on the 30th of last month, stating, "Suspected disguised under-5-employee workplaces using loopholes and illegal practices continue to increase. The government must conduct a nationwide planned labor inspection."
These organizations have been gathering field complaints since 2024 and filing joint petitions urging the Ministry of Employment and Labor to take action. The petition filed this day was already the sixth joint petition. As a result, the labor ministry inspected so-called "fake 3.3" workplaces last year and this year — businesses that disguise LSA-protected employees as freelancers. However, only 108 workplaces were inspected. Critics say this is far too small a scale to regulate the roughly 140,000 workplaces suspected of legal violations.
At the press conference, employees working at Salon A and Salon C came forward to expose unfair labor practices and call for inspections. They voiced the need to merge the paper-divided branches into a single workplace with five or more employees so that the LSA can be properly applied. Workplaces with fewer than five employees are not entitled to basic legal protections such as overtime pay and rest breaks. A Salon A employee said, "The owner directly instructs and manages multiple stores, but the labor office does not consider it as one workplace because he is not the nominal business owner." A Salon C employee expressed frustration, saying, "Through strong labor inspection, violations such as failure to observe rest breaks, distortion of employee status, and workplace splitting must be punished."
At the scene, criticism poured in that the labor ministry has failed to correct its uniform and complacent administration that fails to keep up with field realities. Oh Min-kyu, research director at the Haebang Labor Issues Institute, said, "The way 'fake 3.3' operates differs by region. Labor inspections should not apply the same nationwide standard. Instead, key industries by region should be identified, classified by type, and regional inspection strategies should be established." Ha Eun-sung, a labor attorney with Nonomo, also pointed out, "Looking at the results of investigations by the labor office and the Labor Relations Commission into the cases disclosed today, they remain excessively formal. Investigations into specific and fundamental facts based on substance are needed." They argued that various investigation methods such as account tracing should be used, and that sanctions for legal violations should be strengthened, including the imposition of fines. Justice Party leader Kwon Young-gook said, "I agree with President Lee Jae-myung's remark that 'we must build a society where it is impossible to make money through illegal means.' Society and the government must be alert to freelancers in name only and the splitting of workplaces into units of fewer than five employees."
