In order to receive substitute payment, a claim must be made to the Korea Labor Welfare Service, and workers who have retired from a business of a certain size can receive support from a certified public labor attorney.
Substitute payment claim
- A person who intends to receive payment for bankruptcy shall submit a claim for payment of bankruptcy payment within 2 years from the date of the decision to commence rehabilitation procedures, a decision to declare bankruptcy, or the recognition of the fact of bankruptcy, etc. to the Korea Labor Welfare Service (hereinafter referred to as the "Corporation") through the head of the regional employment and labor office having jurisdiction over the workplace at the time of retirement or the head of the branch office (hereinafter referred to as the "head of the competent regional employment and labor office"). (Article 7(8), Wage Claims Guarantee Act, Article 9(1), Enforcement Decree of the Wage Claims Guarantee Act, Article 5(1) and Annex 3 of the Enforcement Rule of the Wage Claims Guarantee Act)
- A person who intends to receive simplified substitute payment must submit documents below to the Corporation along with the following classification request form. (Article 7(8), and Article 7-2(7), Wage Claims Guarantee Act, Article 9, Enforcement Decree of the Wage Claim Guarantee Act, Article 5(2) and Annex 3-2 of the Enforcement Rule of the Wage Claim Guarantee Act)
|
Division
|
Request period and attachments
|
|
Substitute payment when there is a judgment to pay unpaid wages, etc (Subparagraph 4, Article 7(1), Wage Claim Guarantee Act)
|
• The following documents shall be attached within 1 year from the date of judgment, etc √ If there is a judgment, etc., the authentic copy or copy thereof √ If there is a decision in place of settlement or conciliation in court among those having the same effect as a final judgment, an authentic copy or copy of the certificate of confirmation
|
|
Substitute payment when unpaid wages, etc. Of the employer are confirmed by issuing aconfirmation of unpaid wages, etc. And employers in arrears of wages (Subparagraph 5, Article 7(1), Wage Claim Guarantee Act)
|
• An authentic copy or copy of the confirmation of unpaid wages, etc. And employers in arrears of wages issued for substitute payment claims within 6 months from the date of initial issuance of a confirmation of unpaid wages, etc. And employers in arrears of wages
|
Support for substitute payment billing statement by certified public labor attorney
- When a worker who has retired from a workplace that meets all of the requirements such as the scale of the workplace, the employee may receive support for filling out a substitute payment claim form and verifying the facts from a certified public labor attorney who has been commissioned by the head of the competent regional employment and labor office to support substitute payment-related tasks in accordance with the procedures set by the Minister of Employment and Labor among the certified public labor attorneys registered pursuant to Article 5 of the Certified Public Labor Attorney Act (Article 7(5) of the Wage Claim Guarantee Act, Article 8-2 and Article 8-3(1) of the Enforcement Rule of the Wage Claim Guarantee Act, and Subparagraph 1 of the Average Remuneration of the Retired Workers Who Are Eligible for Support for Work Related to Substitute Payments Such as Unpaid Wages)
.A worker who has retired from a workplace that falls under all the following conditions or has applied for acknowledgment of insolvency facts (Subparagraphs 2 and 3 of Article 5(1), Enforcement Decree of the Wage Claim Guarantee Act)
|
Item
|
Requirements
|
|
① When the business has been abolished or is in the process of being discontinued for any of the following reasons
|
• Where the main business facility is seized, provisionally seized, or transferred for the purpose of repayment of debts while the production or business activities of the business have been suspended (including the case where an auction under the Civil Execution Act is in progress) • In case the license, permission, registration, etc. For the business is revoked or canceled • When the main production or business activity of the business has been suspended for more than 1 month
|
|
② When the employer is unable to pay wages, etc. or it is significantly difficult to pay wages, etc. For any of the following reasons
|
• In case the whereabouts of the business owner is unknown for more than 1 month as of the date of recognition of bankruptcy, etc • When it is recognized that it will take more than 3 months from the date of application for recognition of bankruptcy, etc. For the redemption or recovery of the business owner's property • When the business owner (limited to the business owner of a business with less than 10 full-time employees) fails to pay wages, etc. To a worker who has applied for recognition of bankruptcy, etc. Within 3 months from the date of liquidation of money and valuables
|
A workplace from which the employee was retired shall have less than 30 full-time workers (calculated in accordance with Annex Table 1 of the Enforcement Decree of the Wage Claim Guarantee Act)
The employee’s average monthly remuneration before retirement shall be
3.5 million won or less
A retired employee who wishes to receive the support noted above shall submit 『Application for a certified labor attorney for work related to payment』 with documentation verifying the claimant's average monthly remuneration before retirement, which falls under any of the following to the head of the local labor office in jurisdiction, and the retired employee who applied for the support may designate a certified labor agent to act on behalf of the substitute payment business, or request the head of the local labor office in jurisdiction to designate such a person (The main text of Article 8-3(2), Article 8-3(3), and Annex 6-2 of the Enforcement Rule of Wage Claim Guarantee Act).
1. Proof of income amount
2. Calculated statement for individual notification of employment insurance and industrial accident compensation insurance premiums
3. National Pension Service subscription verification
4. The employee’s insurance premium query data of National Health Insurance Service
※ However, if one can verify any of the 1 to 3 information through joint use of administrative information, it can replace the attachment (The proviso of Article 8-3(2) of the Enforcement Rule of Wage Claim Guarantee Act).
The corporation that has received a substitute payment request must pay the substitute payment within a certain period unless there is a special reason.
Payment of bankruptcy substitute payments
- The Corporation, which has received the claim for payment of bankruptcy payment, shall pay the payment for bankruptcy to be paid to the claimant within 7 days from the date of receipt of the claim for payment of insolvency, unless there are special circumstances. (Article 9(2), Enforcement Decree of the Wage Claim Guarantee Act and Article 8(1), Enforcement Regulations of the Wage Claim Guarantee Act)
Payment of simple substitute payments
- The Corporation, upon receipt of the request for payment of simplified substitute payment, shall determine whether to pay the simplified payment and pay the claimant within 14 days from the date of receipt of the request for payment, if there is no special reason. (Article 9(2), Enforcement Decree of the Wage Claim Guarantee Act and Article 8(2), Enforcement Rule of the Wage Claim Guarantee Act)
· Whether the claimant meets the standards for retired or incumbent workers who are eligible for substitute payment
· Whether the claimant has submitted a request for simple substitute payment to the corporation within the claim period
· Unpaid amount of wages, etc. That fall within the scope of substitute payment (Subparagraphs 1 through 3, Article 7(2) or Subparagraphs 1 through 3, Article 7-2(2), Wage Claim Guarantee Act)
· Amount of simple substitute payment to be paid
· Whether the business owner meets the standards for business owner
Protection of the right to payment
- No entitlement to a substitute payment shall be transferred, seized, or provided as collateral. (Article 11-2(1), Wage Claim Guarantee Act)
- If a person who is entitled to receive substitute payment cannot apply for the payment due to injury or disease, the payment may be delegated to his/her family, and a person delegated to receive a substitute payment intends to receive the substitute payment, he/she shall submit a document certifying the fact of such delegation and family relations. (Article 11-2(2), Wage Claim Guarantee Act and Article 18-2, Enforcement Decree of the Wage Claim Guarantee Act)
- Any employee who is a minor may independently claim a substitute payment. (Article 11-2(3), Wage Claim Guarantee Act)
Employers can get a loan to pay for their unpaid wages, and workers can get a loan for their living expenses.
Loans for the cost of payment of unpaid wages by employers
- If an employer is in arrears of wages, etc. for any employee due to his or her temporary financial difficulties or other grounds prescribed by Article 8-5, Enforcement Rule of the Wage Claim Guarantee Act, ordinance of the Ministry of Employment and Labor, the Minister of Employment and Labor may, upon the employer’s application, provide him or her with loans necessary to pay the overdue wages, etc.(Article 7-3(1), Wage Claim Guarantee Act)
Loans for living expenses for workers
- In order to stabilize the livelihood of employees who have not received wages, etc. From their employers (including retired employees), the Minister of Employment and Labor may make loans to them for living expenses at the request of such employees. (Article 7-3(2), Wage Claim Gurantee Act)
Direct payment of loan amount
- The loan amount must be paid directly to the worker by the Minister of Employment and Labor. (Article 7-3(3), Wage Claim Guarantee Act)