The government will strengthen sanctions on wage arrears. If a wage arrears 'guilty' verdict is confirmed even once, the names of the business owners will be published, and measures such as disadvantages in loans, departure bans, and limitations on policy support will be pursued.
The Ministry of Employment and Labor and other related agencies announced the 'Measures to Eradicate Wage Arrears' on the 2nd. This is key as it raises the level of sanctions compared to the 'Habitual Wage Arrears Business Owner Eradication Law' (revised Labor Standards Act) set to be implemented on the 23rd of next month.
Currently, the Ministry of Employment and Labor publicly discloses a list of business owners who have been found guilty of wage arrears 'twice or more within 3 years or with a total wage arrears exceeding 30 million won within a year' for three years. If they are subject to the list disclosure, they are disadvantaged in loan limits and interest rates. Starting next month when the revised law is implemented, departure bans will be enforced until wages are paid, and participation in policy loan support or state, local government, and public institution subsidy and support projects will also be restricted.
The government plans to expand the criteria for publicizing the names of such businesses subject to various sanctions to include 'cases where a wage guilty verdict is confirmed even once without any time limit.'
In cases of 'recidivism' regarding wage arrears, the level of sanctions will also be increased. If a business owner who has had their name published for wage arrears commits wage arrears again, the plan is to impose penalty surcharges and fines without applying the 'non-punishable by victim's intention' rule (a crime that cannot be punished when the victim indicates they do not want punishment).
At the same time, the government plans to increase the statutory punishment for wage arrears crimes under the Labor Standards Act from the current maximum of 3 years to a maximum of 5 years in prison. The Ministry of Employment and Labor stated that this aligns with the sentencing levels for property crimes such as 'embezzlement.'
The government is also pushing forward support measures to quickly help workers who have not received their wages. For business owners who say, 'I will provide wages even if I have to borrow money,' support for policy loans up to 150 million won is currently provided after an assessment of their liquidation intentions and the potential for business recovery, and there is a plan to expand this limit.
Additionally, the government is implementing a 'large payment' system that pays workers their unpaid wages on behalf of insolvent businesses. The scope of this large payment is planned to be expanded from the 'final 3 months of wages' to 'final 6 months of wages.'
Furthermore, the government is strengthening checks by ▲ joint inspections by the Ministry of Land, Infrastructure and Transport and the National Tax Service ▲ local governments and nationwide large-scale wage arrears crackdowns ▲ conducting a 6-week intensive wage arrears settlement guidance period ▲ operating a wage arrears SWAT team ▲ and providing consultations for young and foreign workers regarding unpaid wages.
According to the Ministry of Employment and Labor, the total amount of unpaid wages exceeded 2 trillion won for the first time last year. The number of affected workers is 283,000. Half of the unpaid amounts occurred in the manufacturing and construction industries, and 80% of unpaid victims were from business sites with fewer than 30 employees.