Korea Workers' Compensation & Welfare Service (K-COMWEL) will impose disadvantages in financial transactions on employers who have long failed to repay subrogated payments starting in June this year. Employers who have not repaid 20 million won or more for over a year are subject to the measure. Subrogated payments are a system in which the state pays wages on behalf of workers whose wages are in arrears.
Korea Workers' Compensation & Welfare Service (K-COMWEL) said on the 3rd, "We will establish a 'wage arrears prevention support department' to carry out this work and begin full-scale operations," adding, "This is a follow-up measure to revisions to the Labor Standards Act and the Wage Claim Guarantee Act."
According to the agency, a bill to extend the government's subrogated payment period from three months to six months recently passed the National Assembly. In addition, whereas the agency had to file a civil lawsuit to reclaim money from employers after making subrogated payments, going forward it will be able to take compulsory measures such as property seizures, collections, and public auctions promptly without litigation.
Accordingly, the agency plans to take stronger measures against employers who are in arrears on subrogated payments. First, the agency will give employers designated by the Ministry of Employment and Labor (MOEL) as habitual wage defaulters an opportunity to explain and will review the materials. Habitual wage defaulters are those who, in the previous year, ▲ failed to pay more than three months of wages or ▲ failed to pay wages five or more times, with the amount in arrears totaling 30 million won or more.
The agency plans to impose economic sanctions on employers who habitually default. It also plans to submit, starting in June, the list of employers who have not paid back subrogated repayment amounts to credit information agencies. Going forward, money the agency is owed by employers will be collected by seizing property or by provisionally seizing or collecting deposits and real estate.
K-COMWEL President Park Jong-gil said, "Subrogated payments are funded by the people's precious taxes and funds," adding, "We will hold employers who evade responsibility accountable and push forward thoroughly with wage arrears prevention efforts, including credit sanctions on employers in arrears."