UPDATE : Friday, May 29, 2020
HOME Pharma
[Exclusive] MSD Korea playing tricks to reduce daycare cost
  • By Kim Yun-mi
  • Published 2019.05.09 11:20
  • Updated 2019.05.09 11:20
  • comments 0

Korea Biomedical Review ran an exclusive story on an executive at MSD Korea who said the government, not the company, should take care of childcare. After the news report, sources from the pharmaceutical firm also said the company used a dodge scheme to reduce the cost for supporting childcare service for workers.

In 2012, the Ministry of Gender Equality and Family designated MSD Korea as a family-friendly firm and “a good place for women to work.” However, many insiders now criticize the firm, calling it “a mere company with many women.”

Recently, employees at MSD Korea told this paper that the company was pulling tricks to avoid its duty to install a daycare center.

According to the Ministry of Health and Welfare’s policy, a company with over 300 female workers or 500 employees is obliged to establish a daycare facility within the building or entrust such service to a general childcare institution.

A business not complying with the policy or refusing to respond to the government’s inspection will face an enforcement penalty and have its disgraceful name disclosed to the public.

In November, MSD Korea sent an e-mail to all employees to notify its plan to support daycare for 30 percent of the employees’ children aged between 0 to 5.

On May 31 last year, MSD Korea was on the list of companies that failed to install a mandatory daycare facility. At the time, the company had 502 regular workers including 277 women. The employees’ young children in need of daycare totaled 203.

However, MSD Korea chose to entrust childcare to an external institution, explaining to the ministry that it did not have enough children to care for. In November, the company sent an e-mail to all employees, notifying the plan to support employees’ young children through an external daycare center.

According to the e-mail, MSD Korea’s total number of employees exceeded 500 as of December 31, 2017, and it became subject to the government’s support for setting up a daycare within the company.

However, the company decided to support childcare through an outside childcare institution because over 300 employees at the Seoul office were salespersons who mostly worked outside the office. Moreover, the company could not secure a building that met legal standards for a childcare facility, it said.

As the law states that the company should support 50 percent of the government’s subsidy for childcare costs of 30 percent of young children aged zero to five, MSD Korea would meet its legal obligation, it said.

However, MSD Korea employees alleged that the company had already 203 young children in need of daycare, although it had claimed that it did not have enough children. They claimed that the company unanimously decided to use an external daycare center without asking employees if they wanted a daycare facility within the building or a designation of an external institution.

MSD Korea devised a cunning plan to minimize the support for childcare cost, sources said.

The state subsidy for monthly daycare cost goes down with an increase of a child’s age – 378,000 won ($322) for zero to one year old, 313,000 won for two years old, and 220,000 won for three to five years old. As MSD Korea has to cover costs for 30 percent of the children, it based the starting point with five-year-old children, sources said. In other words, younger children have less chance to get the daycare subsidy.

“As the company pays only 50 percent of the government’s subsidy, the basis was set at five-year-old children because it was cheaper. So, younger children who need the daycare the most were not able to benefit from the daycare service,” an informant said.

The informant noted that when MSD Korea checked the number of children for daycare through an e-mail survey, it excluded those of workers who took childcare leave.

When an MSD Korea employee takes childcare leave, he or she has to return the company’s laptop. However, the company e-mail enquiring about the need for daycare service for children was available only on the company’s laptop. Workers who had young children in need of daycare could not participate in the survey.

As for the issue, an official at MSD Korea said, “The company is continuing to make efforts to raise employee satisfaction.”

The official went on to say, “Since the company announced its plan to support an entrusted childcare institution, the support started in January this year. Globally, MSD surveyed employee satisfaction in September. Based on the results, we are discussing if there is any other room for improvement.”


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