• UPDATE : 2020.8.6 목 08:00
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[labor news] The small amount subrogated payment system revised for unpaid wages: ministry

The small amount subrogated payment system, which the government provides a subrogated payment to the retired workers whose companies are still in operation or workers whose companies declared bankruptcy but their wages and allowances were unpaid by the employers, will be revised to extend the coverage for the workers who are still hired by the companies in operation from July this year. The ceiling amount of the small amount subrogated payment will be also raised to 10 million won($8,920), up from the current amount of 4 million won($3,570), and the processing time to receive the subrogated payment will take two months, drastically reduced from the average duration of seven months, without waiting for the court verdict.

The Ministry of Employment and Labor on January 17 announced ‘a revised measure to address the unpaid wages’ to stabilize the livelihood of workers whose wages are unpaid and to provide them with prompt remedies which will be put into force from July this year. The ministry explained that the revision is made the most extensively since the subrogated payment system was first introduced in July 2015, so that it can effectively guarantee the worker’s wage claim. The ministry provides the subrogated payment to the workers and then excercise the right to indemnity against the employers concerned to retrieve the fund.

According to the Ministry of Employment and Labor, the total amount of unpaid wages and the number of workers suffered are increasing every year. Since the amount of unpaid wages surpassed 1 trillion won($892 million) for the first time in 2012, with the number of 284,000 workers in difficulty, the total amount of wage claims has shown an upward trend to mark 1 trillion 647.2 billion won($1.5 billion) with 352,000 victimized workers last year. The manufacturing industry is the largest in terms of occurrences with 39 percent, followed by the construction industry(18 percent) and wholesale and retails, and the hospitality industry(13 percent each). According to the size of the company, those with less than 30 workers are the most reported with 68 percent.

The ministry focused on the measure to help the vulnerable groups of workers get paid their unpaid wages in an easier and prompt manner. In order to do so, workers of the companies which are still in operation will be the first target group to be benefited from the revised small amount subrogated payment system. Up until now, the provision of the subrogated payment system has been limited to the workers whose companies went bankrupt or the retired workers whose companies were still in operation. The revised system assures that workers belonging to the minimum wage level and those of their household income falling below 50 percent of the national median household income will become the priority group. The system will be further improved to cover the workers whose wages are 120 percent of the minimum wage by July 2021.

reported by Bae Hye-jung
translated by Kim Sung-jin

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