Including Maternity Leave Pay in 'Chedanggeum' for Unpaid Wages... Establishment of Dedicated Account

Resolution of the Amendment to the Enforcement Decree of the Wage Claim Guarantee Act at the State Council
Prohibition of Seizure of Wage Claim Payment Accounts... Cash Payment if Transfer is Not Possible

[Sejong=Asia Economy Reporter Moon Chaeseok] Going forward, the scope of 'substitute payment of wages' (Chetdanggeum), where the state pays wages owed to workers due to company insolvency, will include wages during maternity leave. Workers can open a 'Chetdanggeum receiving account' upon application, and this account will be protected from seizure.

On the 25th, the Ministry of Employment and Labor announced that the amendment to the Enforcement Decree of the Wage Claim Guarantee Act containing these provisions was reviewed and approved at the Cabinet meeting. This is a follow-up measure following the amended Wage Claim Guarantee Act, which passed the National Assembly at the end of last year and will take effect on the 9th of next month.

Chetdanggeum is a system where the state pays a certain range of unpaid wages on behalf of the employer when a retired worker does not receive wages due to company insolvency. It is divided into 'general Chetdanggeum' received in case of company insolvency and 'small-amount Chetdanggeum' received in case of wage arrears. Until now, the scope of Chetdanggeum payments included the last three months' wages, suspension allowances, and severance pay for the last three years. The upper limit for general Chetdanggeum is 21 million KRW, and for small-amount Chetdanggeum, it is 10 million KRW.

The amendment adds wages during maternity leave for the last three months to the scope eligible for Chetdanggeum. Additionally, a new system for a 'Chetdanggeum receiving account' was established, allowing workers to receive Chetdanggeum payments separately upon application. This is to protect the Chetdanggeum received by workers in case of financial hardship, and seizure of this account is prohibited.

However, in cases where it is unavoidable due to reasons such as financial institution closure, suspension of business, or information and communication failures, and Chetdanggeum cannot be transferred to the Chetdanggeum receiving account as delegated by law to the enforcement decree, payment in cash directly is allowed. The Ministry of Employment and Labor stated, "With the recent amendment of the law and this enforcement decree, it is expected that the protection of Chetdanggeum received by workers from seizure and the expansion of the payment scope will substantially strengthen relief for workers who have not received wages."

At the Cabinet meeting on the same day, an amendment to the Enforcement Decree of the Basic Labor Welfare Act was also approved, allowing the joint labor welfare fund, established for win-win cooperation between large and small-medium enterprises, to use up to 90% of the current contribution amount instead of 80%. Furthermore, large enterprises' in-house labor welfare funds can support the joint funds of partner companies, and in such cases, the in-house fund of the large enterprise can use up to 50% of the joint fund support amount. The amended provisions will take effect from the 9th of next month.

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