South Korea strengthens penalties for wage theft

An amended Labor Standards Act has taken effect in South Korea, significantly increasing penalties for employers who fail to pay wages. Under the new law, the maximum prison sentence for wage theft has risen to five years, and the maximum fine has increased from 30 million won to 50 million won. Additionally, the statute of limitations for criminal prosecution has been extended from five to seven years.

Despite these stricter punishments, the government faces challenges in recovering funds. The recovery rate for simplified wage substitute payments—government funds paid to workers when employers cannot—stands at only 18.1%. Total unpaid wages in South Korea exceeded 2 trillion won for two consecutive years, with manufacturing and construction sectors accounting for approximately half of the total arrears. The number of affected workers reached 262,000 last year, with a notable increase in unpaid wages involving foreign laborers.