The Ministry of Employment and Labor and the Korea Workers' Compensation & Welfare Service (K-COMWEL) announced on the 8th that they will lower the interest rates on loans for settling wage arrears until Oct. 14.
The loan program to support the settlement of wage arrears provides loans to business owners willing to clear up wage arrears or to workers suffering from wage arrears affecting their livelihoods. Business owners will receive interest rates of 3.7% for unsecured loans and 2.2% for secured loans, with a limit of 150 million won on the total amount of the arrears. The living expenses loan for workers is capped at 10 million won per person, with an interest rate of 1.5% per year.
The current interest rate reduction is 1 percentage point for business loans and 0.5 percentage points for worker loans. Thus, the interest rates for business loans are 2.7% for unsecured loans and 1.2% for secured loans. In the case of worker loans, a 1% interest rate applies. This reduction in interest rates follows the allocation of an additional supplementary budget of 8.1 billion won for the relevant projects.
Business owners can apply for the loan by visiting the Korea Workers' Compensation & Welfare Service (K-COMWEL) after receiving confirmation from the local labor office about their eligibility. Workers can apply through the Workers' Compensation Net. Applications will be accepted from July 15 to Oct. 14.
Vice Minister Kwon Chang-jun said, "When wage arrears occur, workers face the greatest difficulty in maintaining their livelihoods at the moment," adding, "I hope that this reduction in interest rates will allow workers affected by wage arrears to quickly receive their owed wages and find some stability in their livelihoods."