Overdue wages rise 20% in 4 years: data

Employers owed more than 7 trillion won ($6.05 billion) in overdue wages to 1.53 million workers over the past 4 1/2 years, data showed Thursday.

According to Labor Ministry data obtained by the office of Rep. Kim Sung-won of the People Power Party, the sum of all overdue wages rose 20 percent in the four-year period from 2016-2019, from 1.43 trillion won for 325,430 workers in 2016 to 1.72 trillion won for 344,977 workers in 2019. In the first eight months of this year, unpaid wages totaled 980 billion won.

The aggregate sum of overdue wages from 2016 to August this year was 7.17 trillion won, affecting a total of 1.53 million workers.

The largest proportion of these cases was reported in the manufacturing industry, followed by the construction, retail, restaurant and accommodation sectors, Kim said, adding that overdue wages were more prevalent in businesses with fewer employees.

In 2019 businesses with five or fewer workers owed 545.6 billion won in overdue wages, while the figure stood at 60 billion won for enterprises with 500 or more workers.

Wage delays have emerged as a major concern amid the coronavirus pandemic, as more businesses struggled to pay their workers on time in the face of a sharp business downturn.

The lawmaker also pointed out an increase in reports of fraud by employers in connection with the government’s support program for financially troubled businesses facing lump-sum payments of overdue wages and severance pay to retiring workers.

Kim said 514 employers fraudulently received 2.36 billion won from state coffers in the five years ending in 2019, by inflating the number of employees covered by the program. The government only managed to collect 70 percent of the due amount.

Businesses are given 30 days to return the payments they received unlawfully, or they can face criminal charges.

Kim called for tougher penalties.

“The ministry should strengthen its penalties for those illegally gaining the funds, and should come up with ways to make businesses return the funds in 30 days,” Kim said in a statement.

By Ko Jun-tae (ko.juntae@heraldcorp.com)