Even if the company you worked for goes bankrupt, you will be able to have up to six months of wages covered by the state.
The Ministry of Employment and Labor (MOEL) said on the 19th that revisions to the Wage Claim Guarantee Act and its enforcement rules, centered on these measures, will take effect.
Previously, no matter how many months of pay were in arrears, workers could receive only up to three months of wages. In response, the ministry revised the Wage Claim Guarantee Act and the enforcement rules so that workers can receive up to six months of wages. Accordingly, the cap on bankruptcy substitute payments increased from 21 million won to 31.5 million won. Bankruptcy substitute payments are a system in which the state pays overdue wages to workers on behalf of a bankrupt company, and the state later claims the expense from the business owner.
In addition, the loan limit for employers using the arrears settlement support program was raised from 150 million won to 200 million won. An arrears settlement support employer loan is a system in which the state lends funds to employers who are willing to clear arrears on their own. A "special loan" was also created that provides up to 1 billion won if arrears exceeding 200 million won occurred within the past three months and real estate is provided as collateral. In this case, the collateral must be real estate valued at least 120% of the requested loan amount.
Minister Kim Young-hoon of the ministry said, "We will strengthen government support so the shattered daily lives of workers with unpaid wages, who worked diligently yet did not receive fair compensation on time, can be restored as soon as possible."