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Poor living and working conditions

K-pop management companies have also been criticized for exploitation of idols through overwork and restrictive contracts, described as " slave contracts " in a BBC report. According to The Hollywood Reporter, "Korea's entertainment business is notoriously improvisational and unregulated. In-demand K-pop stars – many of whom are teenage 'idols' – have been known to rehearse and perform without sleep."

In July 2009, S.M. Entertainment was taken to court by TVXQ and a Super Junior member, who alleged that their working conditions had led to adverse health effects. The court decision in the TVXQ lawsuit determined their contract with S.M. Entertainment void, and resultantly the Fair Trade Commission released contract templates to regulate industry conditions.

In 2014, South Korea passed a law to regulate its music industry, protecting idols aged under 19 from unhealthy labor practices and overtly sexualized performances and guaranteeing them "the basic rights to learn, rest and sleep." Failure to comply with these regulations may lead to the equivalent of a US$10,000 fine.

Industry professionals such as SM Entertainment's CEO Kim Young-min have defended the system, arguing that individuals trained within the system are "no different than typical middle or high school kids, who go to after-school programs to cram for college entrance exams." Kim has also argued that there is a need to consider the expenses incurred by the company during the trainee period, including "facilities, equipment, costumes, and virtually everything the trainees need."

On March 7, 2017, the South Korea Fair Trade Commission (KFTC) passed new regulations in order to protect trainee idols from unfair terms and working conditions. Prior to these regulations, trainee idols at eight idol agencies were not permitted to seek contracts at any other agency while at training. Moreover, agencies were able to terminate a trainee contract at any time for any reason. The Fair Trade Commission states that they believe these changes will "result in a more just contract culture within the entertainment industry between trainee and agency." The Ministry of Culture applied these regulations to all existing agencies throughout 2018.

Some of the concerns raised by the idol agencies over these regulations include the risk of a trainee at one agency going undercover at another agency to receive training with the other agency. This introduces the further risk that the idol agencies must take in training new idols. Trainees train for 3 years on average and the agencies support these trainees with various training programs during this duration, resulting in each trainee being a very large investment for the agency.