Despite COVID-19, Wage Arrears Decreased by 8.1%... "Thanks to Small Wage Claims and Labor Inspections"

Wage Arrears of 160 Million Won Last Year... Increased Settlement Amount and 35.9% Decrease in Unsettled Amount
Ministry of Employment to Operate 'Wage Arrears Prevention and Settlement Intensive Guidance Period' Until the 10th of Next Month

Members of the Korean Confederation of Trade Unions Public Transport Workers' Union and the Eastar Jet Pilots' Union held a press conference on the 29th at the Southern District Prosecutors' Office in Yangcheon-gu, Seoul, to file a complaint against Lee Sang-jik, a member of the Democratic Party of Korea, and his family. Considering the ongoing uncertainty surrounding the M&A, they had been weighing the timing, but following the final cancellation of the stock purchase agreement (SPA) with Jeju Air last week, they decided to accuse the prosecution of suspicions of illicit succession involving his children and various paper company allegations. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kim Bo-kyung] Despite the impact of the novel coronavirus disease (COVID-19) last year, the amount of unpaid wages actually decreased by 8.1% compared to the previous year.

According to the Ministry of Employment and Labor's announcement on the 17th, the amount of unpaid wages incurred last year was 1.583 trillion KRW, down 8.1% from the previous year. Among this, the amount of unpaid wages settled was 1.2549 trillion KRW, an increase of 3.8% compared to the previous year. The unsettled unpaid wages remaining amounted to 328.1 billion KRW, a decrease of 35.9% from the previous year.

In other words, despite the economic crisis caused by COVID-19 last year, the issue of unpaid wages rather improved. Regarding this, a Ministry of Employment and Labor official explained, "It appears to reflect the efforts of labor and management to overcome the crisis together, as well as the impact of government support such as employment retention subsidies and small business support funds."

The reason for the decrease in unsettled unpaid wages is analyzed to be due to the increase in the maximum amount of the wage claim guarantee fund from 4 million KRW to 10 million KRW, which increased the payment amount of the guarantee fund, and the increase in the amount of unpaid wages settled through labor inspectors.

Last year, the amount paid from the wage claim guarantee fund was 579.7 billion KRW, a 26% increase compared to the previous year (459.9 billion KRW). The resolution rate guided by labor inspectors was 52.5%, up 4.5 percentage points from 2019.

[Image source=Yonhap News]

Furthermore, the Ministry of Employment and Labor announced that it will establish and implement a 'Wage Arrears Prevention and Settlement Plan' so that workers can spend the Lunar New Year holiday comfortably without worrying about unpaid wages.

First, from the 18th to the 10th of next month, a focused guidance period for the prevention and settlement of unpaid wages will be operated for about four weeks. During this period, workplaces at risk of unpaid wages, such as those with overdue social insurance premiums, will be selected and guided to prevent the occurrence of unpaid wages.

A 'Wage Arrears Settlement Task Force' will be organized at 48 local labor offices nationwide to immediately dispatch and resolve cases where collective wage arrears sit-ins occur at construction sites and other locations.

Labor inspectors at local labor offices will conduct emergency duty to promptly respond to unpaid wage reports that may occur urgently during holidays and nighttime.

In addition, plans include expanding non-face-to-face investigations and guiding the swift settlement of unpaid wages before the Lunar New Year holiday.

Support for the livelihood stability of workers with unpaid wages will also be strengthened. To enable quick payment of the wage claim guarantee fund before the Lunar New Year, the processing period for the guarantee fund payment will be temporarily shortened from 14 days to 7 days.

The interest rate on livelihood loans for low-income workers with unpaid wages (combined annual income of a couple in the previous year of 58.52 million KRW or less) will also be temporarily reduced by 0.5 percentage points.

Minister of Employment and Labor Lee Jae-gap stated, "Many workers are experiencing difficulties in their lives due to the prolonged COVID-19 pandemic," and added, "We will do our best to prevent wage arrears and support livelihood stability so that everyone can have a warm Lunar New Year holiday."

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