Unpaid Wages Hit Record 1.1 Trillion Won in First Half, Up 5% from Last Year

Ministry of Employment and Labor Reports
Over 130,000 Workers Affected

Amid a prolonged economic downturn, the total amount of unpaid wages in the first half of this year reached approximately 1.1 trillion won, marking an all-time high.

According to the Ministry of Employment and Labor on July 31, the amount of unpaid wages from January to June this year totaled 1.1005 trillion won, with 136,134 workers affected.

Compared to the first half of last year (1.0436 trillion won and 150,503 workers), the amount of unpaid wages increased by 56.9 billion won (5.5%), while the number of affected workers decreased by 14,369 (9.5%). Last year, the annual unpaid wage amount reached 2.0449 trillion won, surpassing 2 trillion won for the first time in history and setting a record high. This year, it is expected to exceed last year's record as well. However, while the growth rate in the first half of last year was 27% compared to the previous year, resulting in a significant difference, this year the amount remains only slightly higher than last year, indicating a trend toward stabilization.

Of the unpaid wages in the first half of this year, about 940.4 billion won, or 85.5%, has been settled. The settlement rate also increased compared to last year's 78.9% (823.8 billion won).

The continued rise in unpaid wages appears to be primarily influenced by economic factors, such as the deterioration of the construction market. Additionally, the increase in business closures among self-employed individuals due to sluggish domestic demand is also believed to have contributed to the rise in unpaid wages.

As the scale of unpaid wages continues to grow, the government has announced its intention to strengthen labor inspections of businesses suspected of wage arrears and to impose stricter penalties on employers responsible for non-payment. Minister of Labor Kim Younghoon emphasized the need to eradicate wage arrears and stated that a pan-government task force (TF) would be launched to announce comprehensive measures.

The revised Labor Standards Act, which strengthens economic sanctions such as credit restrictions, limits on government support, and disadvantages in public bidding for habitual offenders, has also been fully amended and will take effect in October. This law includes provisions allowing workers who are habitual victims of wage arrears to claim up to three times the unpaid amount in damages from their employers.