[2020 National Audit] Wage Arrears in Small and Medium Enterprises Increase by 33% in Two Years

Trends in Wage Arrears in Workplaces with Fewer Than 30 Employees by Year.
[Photo by Song Gap-seok]

[Asia Economy Reporter Kim Jong-hwa] There has been a growing call for a comprehensive government-level response as wage arrears among small and medium-sized enterprises (SMEs) continue to increase year by year.

On the 8th, Song Gap-seok, a member of the National Assembly's Industry, Resources, Trade, and Small and Medium Venture Business Committee from the Democratic Party of Korea (Gwangju Seo-gu Gap), analyzed the 'Wage Arrears Status for the Past 3 Years' submitted by the Ministry of Employment and Labor. The analysis revealed that over the past three years, a total of approximately 405,000 workplaces have accumulated wage arrears amounting to 4.75 trillion KRW.

Among these, workplaces with fewer than 30 employees accounted for 371,844 sites, representing 91.7% of the total, with arrears amounting to 3.3193 trillion KRW, or 70% of the total amount. Workplaces with 30 to fewer than 300 employees numbered 30,507, with arrears of 1.163 trillion KRW, while those with 300 or more employees numbered 3,015, with arrears of 263.7 billion KRW.

The wage arrears for workplaces with fewer than 30 employees showed an increasing trend: 943 billion KRW in 2017, 1.1181 trillion KRW in 2018, and 1.2582 trillion KRW in 2019. The proportion of wage arrears in these small workplaces compared to the total arrears increased from 67.9% in 2018 to 73.2% in 2019, indicating that wage arrears among workers in small and medium-sized enterprises are rising year by year.

Assemblyman Song Gap-seok emphasized, "While government support for SMEs is important, protecting the rights and interests of SME workers is equally crucial," adding, "To structurally resolve wage arrears, the Ministry of SMEs and Startups should take the lead in collaborating with related ministries to establish fundamental countermeasures."

This content was produced with the assistance of AI translation services.