The government is reviewing a plan to raise the living expense loan limit for Homeplus Co. workers with unpaid wages to 20 million won per person from 10 million won, according to reports on the 4th. Wage arrears for Homeplus Co. workers have occurred since January this year and are being resolved sequentially. However, the government judges that if the situation drags on, there is concern that a 10 million won living expense loan per person may be insufficient.
According to the Ministry of Planning and Budget and the Ministry of Employment and Labor (MOEL), the budget for the "living expense loan for unpaid wages" allocated this year is 70.6 billion won. From this, victims of wage arrears can borrow up to 10 million won per person at an annual interest rate of 1.5% (up to 20 million won in employment crisis areas, etc.).
However, 10 billion won of the budget had been executed by February, and the depletion pace is being assessed as faster than expected. A Labor Ministry official said, "Applications from Homeplus Co. workers who have experienced wage arrears are pouring in," and noted, "Demand from Homeplus Co. workers was not reflected in this year's budget."
Wage arrears for 18,000 people directly employed by Homeplus Co. began in January. The total arrears for January were 50 billion won, about 2.8 million won per person. Half of that was settled in January, and the remaining half was reportedly settled in February. However, similar-scale arrears have been occurring since February as well.
In this situation, Kim Byung-ju, chair of MBK Partners, the largest shareholder of Homeplus Co., recently injected 100 billion won as debtor-in-possession (DIP) emergency operating funds. The money is expected to alleviate wage arrears to some extent. But the government believes that if Homeplus Co.'s corporate rehabilitation proceedings are prolonged or lead to bankruptcy, it will be necessary to expand the emergency living expense loan.
There are two main ways to expand the emergency living expense loan. First is to raise the per-person limit. A government official said, "We are closely reviewing the request to raise the current 10 million–20 million won loans to 20 million–30 million won."
The government is also pushing to expand the budget by changing the fund management plan of the Wage Claim Guarantee Fund, which finances the living expense loan program. It can increase the expenditure of key fund items within 20% of the budget.