Coupang Accused of Employing Over 40,000 People Without Insurance Through 90 Subcontractors

Coupang Delivery Truck (Photo: Coupang)

Over 40,000 workers at 90 delivery subcontractors of Coupang have not been provided with employment insurance and industrial accident insurance, which are considered major social security nets for laborers, according to the Korea Workers’ Compensation and Welfare Service (K-COMWEL) on Wednesday.

K-COMWEL, under the direct control of the Ministry of Employment and Labor, announced the findings of an investigation into 528 delivery subcontractors and 11 logistics subcontractors that signed contracts with Coupang Logistics Service, a subsidiary of the Korean e-commerce giant.

The investigation was conducted from Dec. 20 to May 30 and examined cases over the past three years.

K-COMWEL discovered that 90 delivery subcontractors had failed to provide proper social insurance services to a total of 40,948 workers. Among them, 20,080 workers were not provided with employment insurance, while 20,868 workers were not offered industrial accident insurance.

Considering the significant overlap between laborers covered by employment insurance and industrial accident insurance, the number of workers affected by the insurance provision failure of Coupang’s subcontractors was approximately 20,000.

Korean law mandates that all workplaces, including those with temporary and part-time workers, must offer social insurance within 14 days of employment.

Following the investigation, K-COMWEL ensured that the subcontractors in question provide proper insurance coverage to these uninsured workers.

Coupang Company (Photo: Coupang)

It also plans to impose 4.74 billion won ($3.4 million) in unpaid insurance premiums, which should have been paid if these subcontractors had insured the workers at the correct time, along with a fine of 296 million won.

“Employment insurance and industrial accident insurance must be offered regardless of the size and type of workplaces,” K-COMWEL President Park Jong-kil said.

“We will continue to investigate similar industries to prevent a recurrence of failures to insure workers,” he added.

The investigation was initiated after a subcontractor operating Coupang’s logistics center was found to have requested employees to sign documents waiving their rights to industrial accident insurance last year.

Through this practice, company owners typically aim to evade compliance with labor laws or the responsibility of paying for insurance coverage.

Regarding the results of the investigation, Coupang stated that cases of uninsured workers were linked not only to its subsidiary but also to other logistics companies, noting that the probe examined incidents over the past three years.

“Even before the investigation began, we have consistently encouraged our subcontractors to insure workers,” a Coupang official said.

“We have already undertaken the process to cancel contracts with some subcontractors that have not offered sufficient insurance services to workers.”

Nate O'Hara
Nathan is a seasoned commerce writer with a passion for unraveling the intricacies of the business world and distilling them into engaging narratives. During his academic journey, he delved deep into subjects like economics, marketing, and entrepreneurship, honing his analytical skills and developing a keen understanding of market dynamics.