Employers delaying wage payments to be penalized by disclosing their names, etc,.

FYI lng po...


As early as the second half of 2011, the government will introduce a system under which employers who fail to pay wages to their workers will be made public through the Internet, given unfavorable treatment in terms of financial transactions or credit ratings, and prohibited from bidding for contracts awarded by the State, local governments, etc.


On December 14, 2010, the Ministry of Employment and Labor (MOEL) made a preliminary announcement of an amendment to the Labor Standards Act, providing for this system.


According to the amendment, if an employer maliciously or habitually fails to pay wages, retirement pay, etc., or owes huge amounts of overdue wages, his/her name, business name and details of the delayed payments would be disclosed through the Internet, official gazettes, etc.


And information on such an employer would be provided to the Korea Federation of Banks, and thus made available to financial institutions or credit rating agencies so that they reflect that information when lending money or evaluating credit risk. Meanwhile, the employer would be restricted from participating in tenders offered by the State, local governments or public organizations for a certain period.


* The practice of delaying payment of wages persists with the amount of overdue wages reaching 1.3 trillion won, affecting 300,000 workers last year. By the end of November 2010, overdue wages amounted to 1.04 trillion won, affecting 250,000 workers.


The main features of the preliminarily announced bill are as follows :

Among employers found not to pay their workers money and other valuables, such as wages, retirement pay, etc., prescribed by the Labor Standards Act, those who maliciously or habitually delay payment of wages or owe large amounts of overdue wages would face naming and shaming.


* Criteria for singling out employers for naming and shaming : (malicious) an employer is arrested and charged with failing to pay wages, etc., for one year from the date of disclosing his/her name, or such charge is put on hold because he/she is on the run or his/her whereabouts is unknown; (habitual) an employer has failed to pay wages, etc., at least three times during one year from the date of disclosing his/her name; and (involving a large sum) an employer owes overdue wages equal to or higher than the amount determined by the Minister of Employment and Labor.


* Employers who have paid all overdue wages are excluded from such naming and shaming.


Financial and credit sanctions would be imposed on employers who delay wage payments by providing their personal information to the Korea Federation of Banks, a credit information collection agency. Based on that information, financial institutions and credit rating agencies will unfavorably treat these employers and their companies with regard to lending, debt rollover, credit rating, etc.


As with naming and shaming, the scope of employers subject to such financial sanctions will include those who maliciously or habitually delay payment of wages or owe huge amounts of overdue wages. But the scope will be further expanded to include those who repay financial debts first, delaying sorting out overdue wages, to remove the bad practice of giving a higher priority to other debts than unpaid wages.


* Criteria for singling out employers for financial sanctions :(malicious) an employer is detained and charged with failing to pay wages, etc., for one year from the date of providing his/her personal information, or such charge is put on hold because he/she is on the run or his/her whereabouts is unknown; (habitual) an employer has failed to pay wages, etc., at least twice during one year before the date of disclosing his/her name; and (involving a large sum) an employer owes overdue wages equal to or higher than the amount determined by the Minister of Employment and Labor.


* Employers who have paid all overdue wages are excluded from the financial sanctions.


Employers singled out for naming and shaming would be disqualified from participating in tenders offered by the State, local governments or public organizations, for a certain period, and thus from participating in projects carried out by the State, etc. This will allow the public sector to take the lead in eradicating repeated delays in wage payments.


However, employers who inevitably delay payment of wages will be given the opportunity to be heard and sort out overdue wages within a certain period. If they continue to fail to pay overdue wages, the government will disclose their names and give them unfavorable treatment, such as financial sanctions.


Meanwhile, in an effort to protect workers who are not paid for their work and realize a fair society, MOEL is now in consultation with other government agencies to introduce restrictions on nomination for government awards, which will exclude workplaces and employers involved in delaying wage payments from being nominated for various government awards.


Jeong Hyun-ok, Director-General of the Labor Standards Bureau, MOEL, said, "There has been a misunderstanding that employers could get away with just a fine of several hundred thousand won for delaying wage payments. From now on, it should be recognized that employers cannot carry on business without paying wages." She stressed, "The key factor in realizing a fair society is to make sure that those who work hard get fair compensation for their work."


She also said, "This amendment demonstrates the government's strong determination to call those responsible for delaying wage payments to account and to protect workers' rights through various means, such as naming and shaming, financial sanctions and restrictions on participation in government tenders, as well as by enforcing the law strictly against employers who maliciously or habitually delay payment of wages or owe huge amounts of overdue wages."


Source: MOEL

thanks po sa information sir god bless and happy new year