Unpaid Wages Hit Record High... 'Labor Rights Education' Planned for Employers Who Repeatedly Withhold Wages

Broader sanctions for employers who fail to pay wages under consideration
Key is distinguishing simple payroll errors from deliberate wage withholding

The government is pursuing a plan to require employers who repeatedly fail to pay wages to take labor rights education courses. The aim is to supplement financial sanctions, such as restrictions on access to loans, with measures to improve employers' labor-management capabilities and prevent repeat violations.

According to labor groups on Nov. 9, the Ministry of Employment and Labor is conducting research and internal reviews to develop a comprehensive plan to address wage arrears. The interim report on the research is also said to have highlighted the need for education for employers. Minister Kim Young-hoon recently wrote on social media, "Following credit sanctions, we will pursue requiring employers to complete labor rights education," adding, "A situation in which people work but do not get paid should never exist." The government is seeking to improve employers' awareness and develop preventive measures as the problem worsens: nationwide wage arrears totaled 2.0679 trillion won last year, a record high for the third consecutive year. A ministry official said, "Training for employers who repeatedly fail to pay wages has been under review since preparations for this year's work report," adding, "The measure is intended to prevent repeated wage arrears caused by a lack of labor-management knowledge or inadequate responses to the risk of falling behind on payments."

Minister of Employment and Labor Kim Young-hoon delivers opening remarks at a ruling party-government meeting on issues related to the Climate, Environment and Labor Committee, held at the National Assembly Members' Office Building on Oct. 29, 2026. Photo by Yoon Dong-ju

Options being discussed include orders requiring repeat offenders to take courses after the fact, linking education to judicial proceedings, and making labor law education mandatory for employers generally. One proposal would require employers whose names are publicly disclosed for wage arrears or who are subject to credit sanctions to complete labor rights or Labor Standards Act training, with fines imposed if they fail to do so without justifiable reason. The Occupational Safety and Health Act, which requires employers and management-responsible officers at workplaces where serious accidents occur to undergo safety and health training, is cited as a precedent. Those who fail to complete the training without justifiable reason may be fined up to 50 million won.

Linking education to judicial proceedings is also under consideration. First-time offenders responsible for minor wage arrears could receive lenient treatment, such as a suspension of indictment, on the condition that they complete training. Those who refuse the training or repeatedly fail to pay wages would face strict punishment. There are also cases overseas in which companies with wage arrears are required to take steps to prevent recurrence. The United States and Australia, among others, have systems requiring such companies to provide labor law training or conduct internal reviews. In Australia, the Fair Work Ombudsman (FWO) enters into enforceable undertakings with companies that have failed to pay wages. These can require not only repayment of the arrears but also labor relations law training for chief executives and human resources managers, as well as regular audits by external organizations.

Making labor law education a legal requirement for employers generally is also being discussed. The proposal would expand labor-management training for small-business owners, which is currently voluntary, so they can learn the basics of labor relations law, including employment contracts and wage payments, in advance. However, challenges remain, including establishing a legal basis and addressing opposition from businesses. In the past, bills were introduced in the National Assembly to require employers with wage arrears to complete preventive training (a 2018 bill sponsored by Assemblywoman Shin Bora) and to make labor law education mandatory for employers (a 2021 bill sponsored by Assemblyman Kim Jooyoung), but both were scrapped when their sponsors' terms ended.

Small-business owners and small and medium-sized enterprises are concerned that increased training could become an additional regulation that fails to account for conditions in the field. Critics also argue that it would treat even small-business owners who were unable to pay wages on time due to an economic slowdown and weak domestic demand as potential criminals. Lim Youngju, director of the Workforce Policy Office at the Korea Federation of SMEs, said, "We understand the goal of preventing wage arrears, but making training mandatory and requiring employers to set aside separate time for it is out of touch with conditions on the ground." Lim added, "Businesses often cannot afford to have human resources and labor experts, and they are struggling amid the economic slowdown. In this situation, increased training could add to their burden and lower morale." A ministry official said, "Training for employers who repeatedly fail to pay wages is under review as a preventive measure," adding, "The specific approach, including whether to make it mandatory, requires further consideration, including the establishment of a legal basis."

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