Substitute payments and loans that were attempted or received through fraudulent methods will not be paid or will be refunded for unfair gains.
Non-payment or recovery of substitute payments and loans
- Where a person attempts to receive a substitute payment or loan by fraud or other improper means, the Minister of Employment and Labor may opt not to provide all or some of the substitute payment or loan as prescribed below. (Article 14(1) and (2), 「Wage Claim Guarantee Act」 And Article 20(1),「Enforcement Decree of the Wage Claim Guarantee Act」)
· If the conditions for payment of substitute payments or loans are not met: all of the amount requested or paid
· If the conditions for payment of substitute payments or loans are met: part of the amount requested or paid (referring to amounts equivalent to substitute payments or loans that have been received or attempted to be received by fraudulent or other improper means or incorrectly paid)
- When the Minister of Employment and Labor decides to claw back a substitute payment or loan received pursuant to described above(including additional collection below), he/she shall notify the person obliged to make the payment to pay the relevant amount.(Article 20(2), 「Enforcement Decree of the Wage Claim Guarantee Act」, Article 11(1) and Annex 10, 「Enforcement Rule Of The Wage Claim Guarantee Act」)
- A person in receipt of a notice under description above shall pay the notified amount within 30 days from the date the notice is received. (Article 20(3), 「Enforcement Decree of the Wage Claim Guarantee Act」)
Additional collection of 5 times or less of the substitute payments
- Where a clawback of a substitute payment arises, an amount not exceeding 5 times the amount of such substitute payment received by fraudulent or other improper means may be additionally collected as prescribed. Provided, additional collection may be exempted from the person who reported the misconduct confidently. (Article 14(3), 「Wage Claim Guarantee Act」 and Article 11(2), 「Enforcement Rule of the Wage Claim Guarantee Act」)
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Additionally collected amount
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Reason for collection
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① In any of the following cases, 5 times the substitute payments paid by fraudulent or other improper means
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• In case the claimant receives substitute payments by deceiving that the payment has been made in a collusion between the business owner (including the person in charge of business management and other persons acting for the business owner) and the claimant despite the fact that the claimant has been paid during the period covered by the substitute payments claim • In case the claimant claims substitute payments by fraudulent or other improper means more than twice in the 5 years prior to the discovery of the fact that substitute payments were made by fraudulent or other improper means (hereinafter referred to as "improper payment")
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② In any of the following cases, 2 times the substitute payments paid by fraudulent or other improper means
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• In case the employer and the claimant collude to pretend that the payment of an amount greater than the actual amount of unpaid wages has been delayed, or when substitute payments are made while concealing the fact that overdue wages have been paid • When the number of claiming substitute payments by fraudulent or other improper means is 1 in 5 years before the date of detection of improper payment
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③ In cases where substitute payment is made by fraudulent or other improper means other than the above ① and ②, twice the amount of the substitute payment received by fraudulent or other improper means
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※ In cases where the illegal receipt falls under more than two cases of ① to ③ above, the bigger amount is applied. (Article 11(3), 「Enforcement Rule of the Wage Claim Guarantee Act」)
Collective responsibility
- If a substitute payment or loan is provided by fraudulent means, such as making a false report, making a false statement or false certification, or submitting false documents, the employer and the recipient of the substitute payment or loan shall be jointly and severally liable therefor. (Article 14(4), 「Wage Claim Guarantee Act」)
Penalty for violation
- Any of the following persons shall be punished by imprisonment with labor for not more than 3 years or by a fine not exceeding 30 million won (Subparagraph 1, Article 28(1) and Subparagraph 2, Article 28(1), 「Wage Claim Guarantee Act」)
·A person who has received a substitute payment or a loan by fraudulent or other improper means
· A person who has made another person receive a substitute payment or a loan by fraudulent or other improper means
- Any of the following persons shall be punished by imprisonment with labor for not more than 2 years or by a fine not exceeding 20 million won., (Article 28(2), 「Wage Claim Guarantee Act」)
· A person who has submitted a false report, proof, or document in order to obtain an unfair substitute payment or loan
· A person who has submitted a false report, proof, or document in order to make another person receive an unfair substitute payment or loan