Ruling Party and Government to Toughen Penalties for Malicious Wage Arrears: "Increasing Maximum Sentence from 3 to 5 Years"

Reviewing Expansion of Wage Segregation Payment System to the Private Sector
Labor Standards Act Amendment Targeted Within the Year
Improvement of Job Advertisement Monitoring System Also Planned

The Democratic Party of Korea and the Ministry of Employment and Labor have agreed to pursue institutional reforms, including strengthening penalties to prevent wage arrears and expanding the scope of the wage separation payment system.

On November 26, members of the Democratic Party's Climate, Energy, Environment, and Labor Committee and Kim Younghoon, Minister of Employment and Labor, held a party-government meeting at the National Assembly and finalized a list of fast-track agenda items to be implemented within the year. Kim Jooyoung, the Democratic Party's secretary for the Environment and Labor Committee, told reporters after the meeting, "We will seek to increase the statutory penalties for wage arrears, which are directly linked to the livelihoods of workers and their families, within this year," adding, "We plan to strengthen the punishment from the current imprisonment of up to three years to up to five years." In addition, joint inspections and compulsory investigations will be conducted in cooperation with other ministries such as the Ministry of Land, Infrastructure and Transport, the National Tax Service, and local governments to prevent wage arrears.

Kim Younghoon, Minister of Employment and Labor, and Ahn Hoyoung, Chairman of the National Assembly Environment and Labor Committee Photo by Kim Hyunmin

Assemblyman Kim explained, "Malicious wage arrears at workplaces require heightened awareness," and added, "Punishments are currently too lenient, which leads to disregard for the law, so we have decided to strengthen them."

They also plan to introduce and expand the wage separation payment system in public construction projects. The idea is to establish an escrow-like system that separates labor costs from general expenses in subcontracting contracts. Assemblyman Kim stated, "In public construction projects, the prime contractor applies the wage separation payment system by paying wages as a separate item when making payments to subcontractors. To fundamentally block wage arrears, we will gradually introduce and expand this system to the private sector as well." He added, "Taking into account the fields and industries to which it will apply, we will pursue amendments to the Labor Standards Act within this year."

To eradicate illegal high-profit job advertisements such as Cambodian employment scams, they will comprehensively review the job advertisement monitoring system and pursue institutional improvements. Assemblyman Kim explained, "We plan to collaborate with private recruitment platforms and the Korea Employment Information Association." In addition, to address youth employment issues, they will consult with fiscal authorities to expand the Youth Employment Leap Incentive to workplaces with more than 500 employees in local areas. They will also prepare innovative measures to expand the scope of labor inspections and strengthen the capabilities of labor inspectors as the workforce increases.

Meanwhile, regarding the legislation to extend the retirement age, Assemblyman Kim conveyed, "It is difficult to set a timeline immediately, and the discussions have not yet been concluded even in the special committee."

This content was produced with the assistance of AI translation services.