E-Mart Cashiers Get Full-Time Status

Shinsegae E-Mart, the top large-sized retailer in Korea, has decided to change the status of all its women cashiers to regular employees before this coming July.

The shift of irregular workers to regular employees is expected to become the trend across the entire industry this year, as the phenomenon, which began at the end of 2006 in the financial sector, including Woori Bank, is spreading to the retail industry.

Especially noteworthy is the move by E-Mart and Woori Bank to introduce a separate wage system from the existing regular workers, in order to reduce the additional burden on wages that arises from absorbing the irregular workers into the regular workforce.

The widespread introduction of this new wage system, which determines salary by the importance and amount of the employee’s work, can change the landscape in the previous wage model.

Shinsegae E-Mart confirmed on Tuesday that all of its cashiers will be switched to regular employees before July, when the Irregular Workers Protection Law is scheduled to go into effect.

“We are carrying out internal measures to prepare for turning the 4800 women cashiers into regular staff by July,” said a high-ranking source from Shinsegae. “The additional cost will not be too burdensome, since we already have raised the irregular employees’ wages.”

Shinsegae is putting together a measure that extends the working hours of cashiers from the current 6 hours per day and less than 36 hours per week, to 40 hours weekly. The change is necessary because employees that work less than 36 hours per week are classified as “hourly employees,” which fall into the irregular category.

The company is also introducing a new wage system to be applied to the cashiers as they become part of the regular staff. Other companies also agree that such a new system is imperative in order for them to survive.

“The Irregular Workers Protection Law that was passed in the National Assembly end of last year means we have to make the irregular employees into regular staff,” said a HR manager at a large local company. “In this case, we would not be able to bear the increasing wage burden if we maintained the previous single payroll system.”

According to businesses, as companies must turn irregular employees, who they could lay off relatively easily, into regular personnel, they have no choice but to balance the declining labor flexibility with higher wage flexibility by deploying the new wage system.

“The developed countries have a long tradition of the nature of jobs determining the ‘market price’ of wages,” said Chung Jin-ho, head of Wage and Jobs Innovation Center at Korea Labor Institute. “The new wage system gaining popularity as a result of the Irregular Workers Protection Law may bring about a groundbreaking change in Korean businesses’ wage structure.”

sanjuck@donga.com jsonhng@donga.com