Government Intensifies Wage Arrears Supervision Ahead of Seollal... Loan Interest Rate Reduction

Wage Arrears Amounting to 1.2334 Trillion KRW Occurred from January to November Last Year... 83.3% Settled

[Sejong=Asia Economy Reporter Moon Chaeseok] The Ministry of Employment and Labor announced on the 9th that it will conduct intensive inspections and guidance on wage arrears for three weeks from the 10th to the 30th ahead of the Seollal holiday.

The Ministry of Employment and Labor will select workplaces with a high possibility of wage arrears, such as those that have defaulted on social insurance premiums, and provide prior guidance to prevent arrears. Labor inspectors at 48 local labor offices nationwide will be on emergency duty.

The ministry sent cooperation letters to all public institutions and major construction companies, urging them to expedite the execution of progress payments (money paid based on the amount of work completed during construction) before the holiday. In particular, labor inspectors plan to visit 500 public construction sites in person to inspect and guide wage arrears and encourage early execution of progress payments.

The ministry also decided to intensively manage illegal subcontracting, a major cause of wage arrears in the construction industry. To ensure that workers who have not received wages can quickly receive advance payments before Seollal, the simplified advance payment processing period will be temporarily shortened from 14 days to 7 days. Advance payments are a system in which the state pays a certain amount of unpaid wages on behalf of the employer when workers do not receive wages due to company bankruptcy, etc.

The interest rate on living expense loans for workers with wage arrears will be temporarily reduced by 0.5 percentage points (p) from 1.5% to 1.0% per annum.

Meanwhile, the total amount of wage arrears from January to November last year was 1.2334 trillion won (226,539 workers with arrears), a 14.6% decrease compared to the same period the previous year. Of this, the amount settled was 1.0278 trillion won (settlement rate 83.3%).

Minister of Employment and Labor Ahn Kyung-deok told the heads of local labor offices nationwide, "For large-scale and collective wage arrears, the heads of institutions should personally guide and actively settle the arrears."

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