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20 companies pay fines rather than pay for day care

US retail giant Costco among them

Sept. 19, 2023 - 15:41 By Lee Jaeeun

Twenty workplaces in Korea have failed to set up day care centers for employees' children in the last five years, even though they face fines of up to 200 million won ($153,000) per year if they keep failing to provide them, government data showed Tuesday.

Under the Child Care Act and Equal Employment Opportunity and Work-Family Balance Assistance Act, businesses that have more than 500 workers or 300 female workers are required to either set up day care facilities, or pay nearby centers that take care of their workers' children.

Violators can face a fine of 100 million won, up to twice per year, but this is often cheaper for the company, because it is less than the cost of providing child care.

According to the Ministry of Health and Welfare, however, 20 workplaces subject to the regulation have not had day care centers over the past five years nor paid nearby centers that take care of their workers' children. A total of 62 fines have been imposed on these 20 workplaces since 2018.

The ministry disclosed the names and addresses of the violators, which include global giant, Costco Wholesale Korea; auto parts maker DAS, which is run by former Korean president Lee Myung-bak’s elder brother, Lee Sang-eun; a Korean low-cost airline, T'way Air; a high-level general hospital, Ewha Womans University Mokdong Hospital; a Korean member firm of KPMG International, a global accounting and consulting provider, Samjeong KPMG Accounting Firm.

At DAS alone, the number of employees' children subject to childcare at daycare centers reportedly exceeds 300. Since companies' share of day care provision amounts to hundreds of thousands of won per month, this would far exceed the fine.

Rep. Choi Youn-suk of the National Assembly's health and welfare committee said “In order to overcome the huge demographic crisis in terms of low fertility rates, it is important to make a society where people can balance work and family. Companies should fulfill their social responsibilities in creating a suitable environment for giving birth and raising children. The government should come up with more effective systems and regulatory measures to encourage companies to actively set up daycare centers for employees' children.”