The amount of overdue wages and the number of workers who have suffered losses continues to increase in Korea. Looking at the trend of overdue wages published by the Ministry of Employment and Labor, the amount of overdue wages has increased from 1.1771 trillion won in 2012, 1.3194 trillion won in 2014, to 1.4286 trillion won in 2016. Last year, the overdue wages and the number of workers waiting for overdue wages accounted for 1.6472 trillion won and 351,531 respectively, the largest ever in history. They are relatively large compared to developed countries. In the United States and Japan, the number of workers waiting for overdue wages accounts for 0.2 to 0.6 percent of the total workers, while it accounts for 1.7 percent of the total workers in Korea.
It is a principle that a company pays corresponding wages to workers for receiving labor, and according to the current Act, if a company does not pay wages, criminal penalties are being imposed on the business owner in violation of the Labor Standards Act. However, only with insufficient criminal penalties for business owners, it has a limit to protect workers who have not received wages. Various measures are needed to remedy the workers suffering overdue wages.
In response, on January 1, 2017, the Ministry of Employment and Labor established the Reform Plan of Overdue Wages Settlement System that greatly strengthened the livelihood guarantee of workers suffering overdue wages and provided a quick remedy; but it is now necessary to prepare legislation on matters requiring the revision initiative of the Labor Standards Act, among the tasks reflected in the Reform Plan of Overdue Wages Settlement System.
Therefore, to guarantee the livelihood of workers waiting for overdue wages, the amendment aims to stipulate the provision that strengthens the education of labor-related laws on business owners who have delayed the payment of wages to prevent instances of overdue wages, and to strengthen criminal liability for business owners who have delayed the payment of wages using malicious methods such as the deliberate property concealment or bankruptcy of a workplace.

Details

A. The Minister of Employment and Labor may order a business owner who has not paid wages to be trained for the prevention of overdue wages for a prescribed period not exceeding three months if he/she falls under any of the following (Article 43-4 newly inserted):
1. Where the number of delayed payments of wages, etc., exceeds five within one year before the day on which wages are not paid
2. Where names are disclosed pursuant to Article 43-2 of the Labor Standard Act
3. Where data on overdue wages, etc., are provided pursuant to Article 43-3 of the Labor Standard Act
B. A person who violates Article 36, Article 43, Article 44, Article 44-2, Article 46, or Article 56 by concealing or destroying property or performing acts such as deliberately bankrupting or discontinuing a business or workplace shall be punished by imprisonment for up to five years or subject to a fine of up to 50 million won (Article 109 (2) newly inserted).

Article 43-4 (Order of Education) (1) The Minister of Employment and Labor may order a business owner (including a representative person in cases of a corporation; hereinafter same in this Article) who has not paid wages, etc., to be trained for the prevention of overdue wages for a prescribed period not exceeding three months if he/she falls under any of the following: