Ministry seeks increase in wage-delay penalties

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Ministry seeks increase in wage-delay penalties

Beginning next year, a company based in Korea will have to pay more than double the amount of unpaid wages if caught delaying payment. A company caught violating the minimum wage requirement also would be fined up to 20 million won ($19,646).

The Ministry of Employment and Labor said yesterday it will push to revise related laws by the end of the year.

Last year, there were more than 250,000 instances of employees not being paid on time, with total wages involved exceeding 1 trillion won.

Under current labor law, even if a court rules that an employer delayed payment of wages in a suit arbitrated by the ministry, the employer is only required to pay the delayed wage, with no additional penalties stipulated for the delay.

The revised law would mandate that employers pay double the amount of late wages. Plus, the employers would be assessed interest on the unpaid amount.

So far, employers are only required to pay interest on unpaid wages if the employees affected are retired or deceased at the time the payment is made. Under the new law, they would have to pay interest on unpaid wages regardless of the status of the employee. The interest rate would increase in proportion to the length of the delay: 5 percent for up to six months, 10 percent from six months and a year, and 20 percent for a year or longer.

The ministry also wants to strengthen punishment for violations of minimum wage regulation

So far, employers are allowed to pay 90 percent of the minimum wage, currently 5,580 won per hour, for the first three months, which can be classified as an apprenticeship period. They would have to pay 100 percent from the start of employment under the new law.

In addition, if a company violates the minimum wage regulation twice, it would be subject to criminal punishment, the ministry said.


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