"Refusing 1 Year Salary Claiming 'Management is Difficult'... Ministry of Employment Uncovers 9.1 Billion Won in Unpaid Wages"

Small and medium-sized IT venture companies, manufacturing businesses, and hospitals, where many young people work, have been repeatedly found to withhold wages due to financial difficulties, according to a planned inspection by the Ministry of Employment and Labor.

The Ministry announced on the 3rd that, as a result of planned inspections of 131 suspected habitual wage arrears companies and 12 construction sites, they uncovered over 9.1 billion KRW in unpaid wages and immediately took legal action against 69 companies for 148 violations of the law.

This planned inspection was conducted to address the difficulty employees face in reporting wage arrears while still employed. Particularly, intentional and habitual wage arrears were met with immediate legal action, making this operation more rigorous than ever. As a result, this single planned inspection led to the largest scale of wage arrears detection and legal prosecution to date.

Wage arrears were mainly found in the information and communication industry, manufacturing, and hospitals, where wages were habitually unpaid for several months up to a year due to financial difficulties. In some cases, arbitrary wage payments by employers and lack of awareness of labor laws led to habitual arrears of various allowances for several years. For example, a small software development venture company, Company A, withheld a total of 1.7 billion KRW in wages and severance pay for 25 employees over one year, citing poor business conditions and difficulty in attracting investment. Even before the labor inspection, 36 cases involving over 900 million KRW in wage arrears had been reported, indicating habitual wage withholding. Additionally, Company B, a small hospital, withheld a total of 450 million KRW in wages and severance pay for 25 employees over one year and three months, citing financial difficulties following COVID-19.

The Ministry plans to ensure thorough protection of workers' rights by pursuing legal action for confirmed wage arrears and requiring submission of liquidation plans to monitor future compliance.

Furthermore, in the 12 construction sites jointly inspected by the Ministry of Employment and Labor and the Ministry of Land, Infrastructure and Transport, illegal subcontracting and violations of direct wage payment were detected at six sites. Legal actions were taken accordingly.

Taking this planned inspection as an opportunity to resolve wage arrears issues for current employees, the Ministry of Employment and Labor will operate an 'Anonymous Wage Arrears Reporting Center' from the 11th to the 31st to strengthen surprise inspections and plans to expand labor inspections at construction sites in the future.

Minister of Employment and Labor Lee Jeong-sik stated, "Wage arrears are a clear criminal act that undermines the foundation of workers' lives and cannot be tolerated for any reason," adding, "We will continue to mobilize all available means to eradicate wage arrears."