(1) Reasons for Proposal

Although overdue wages is a serious problem that threatens the livelihood of workers, the amount of overdue wages increases every year. Last year, there were 345,000 unpaid workers, and the amount of overdue wages reached a record high of 1,721,700,000,000 won. 

To tackle this problem, the government has put in place the substitute payment program, which pays a certain amount of overdue wages on behalf of their employers to retired employees who have not been paid, but it is too limited to quickly remedy the rights of workers with overdue wages as it is only provided to retired workers and it takes a lot of time (7 months) from application to payment.

In this regard, this Act aims to overhaul the program so that workers can get support quickly and easily by expanding the recipients and scope of substitute payment and simplifying the procedure while putting in place safeguards to minimize moral hazard among employers and improve the soundness of the Wage Claim Guarantee Fund.

(2) Major Provisions

A. Specify substitute payment for current employees

Prepare the basis that includes low-income current employees in the small substitute payment program, which previously applied only to retired workers

B. Simplify the small substitute payment procedure (Article 7 (1) 5)

Allow the head of a local employment and labor office to pay a small substitute payment without the court’s definitive ruling if it is confirmed by documentation that the wages have not been paid by the employer 

C. Introduce a compulsory collection of payments under the procedure of dispositions on national taxes in arrears (Article 16 (1))

Change the collection of payments from under the civil procedure to under the procedure of dispositions on national taxes in arrears

D. Introduce a program that introduces preservation seizure and collection before the payment deadline (Articles 8-2 and 8-3) 

Introduce ‘preservation seizure,’ which can seize the employer’s properties to the extent of the substitute payment if any payment cannot be recovered after notifying such payment as a particular reason arises 

Introduce ‘collection before the payment deadline’ to collect any payment before the deadline even if a particular reason arises

E. Prevent false claims for substitute payment (Article 14)

Revise the provision so that up to 5 times the substitute payment can be recovered for any false claim, as opposed to the current one which only allows the recovery of an amount equivalent to the substitute payment

F. Request information cooperation from competent agencies (Article 23)

Add data which can be requested from government agencies to recover payments and pay substitute payments