Reason for proposal

The Act punishes wage arrears by imprisonment for up to three years or a fine of up to KRW 30 million, but most criminal of the penalties imposed are only small fines. Although various sanctions, such as disclosure of the list of delayed payment employers, credit restrictions and delayed interest, are imposed on business owners who arrears payment to prevent wage arrears, it still remains a serious problem, with about KRW 1.7 trillion in wage arrears occurring every year and about 270,000 workers being affected. 

In order to prevent wage arrears and ensure that workers can maintain a stable life, the revision is designed to restrict government support, impose disadvantages in public bidding, and expand or strengthen credit sanctions, in addition to charging delayed interest on outstanding wages of incumbent workers, and imposing criminal punishment on habitual delayed payment employers who intentionally and repeatedly fail to pay wages as they have no will to settle outstanding payments to their employees.

The revision also seeks to strengthen the protection of workers' labor rights by providing a legal basis for requesting the provision of data to the relevant agencies in connection with the selection of workplaces for labor supervision and other related purposes.

Main contents

a. It expands the target of delayed interest payment on unpaid wages to include current employees (Article 37 of the Draft).

b. It allows the Minister of Employment and Labor to provide data on wage, etc. arrears of employers who habitually arrears wages, etc. (hereinafter referred to as "habitual delayed payment employers") to a centralized credit information collection agency (Article 43-3 of the Draft).

c. It allows the Minister of Employment and Labor to provide the wage and other arrears data of habitual delayed payment employers to a government agency upon request in order to restrict the provision of administrative assistance or support to them (Newly established in Article 43-4 of the Draft).

d. It provides statutory grounds for entrusting tasks to agencies with expertise in order to efficiently handle tasks related to habitual delayed payment employers, etc. (Newly established in Article 43-5 of the Draft).

e. It provides statutory grounds for requesting the provision of data in order to carry out tasks such as restricting assistance or support to habitual delayed payment employers (Newly established in Article 43-6 of the Draft).

f. It provides a legal basis for requesting the provision of data to the relevant agencies in connection with the selection of workplaces for labor supervision (Newly established in Article 102-2 of the Draft).