Labor News: Workers in small workplaces can claim substitute payments at no cost

Workers in small workplaces can claim substitute payments at no cost

Starting on January 1 this year, if a person who has worked in a workplace ordinarily employing fewer than 10 workers does not receive wages or retirement pay due to the company's bankruptcy or shutdown, he/she can claim substitute payments*, paying no fee to the certified labor affairs consultant.

* 'Substitute payments' refers to money which is paid to a certain extent by the State, on behalf of an employer unable to pay wages, to a worker retiring due to the company's bankruptcy, etc., if the worker does not receive wages, compensation for business suspension or retirement pay. The amount of substitute payments is equivalent to the worker's final three months of wages and compensation for business suspension or retirement pay for final three years of service.

At present, workers who want to receive substitute payments are required to meet strict payment conditions and submit many documents for eligibility check to prevent fraudulent receipt. So they have to hire certified labor affairs consultants and pay no small fee out of their own pocket when applying for such payments.

To address this problem, the government has decided to introduce the Substitute Payment Application Assistance System. Under the system, certified labor affairs consultants chosen by the government help, free-of-charge, workers in small workplaces with fewer than 10 workers to seek substitute payments.

Thanks to the system, workers who have had unpaid wages, but hesitated to claim substitute payments, knowing that the amount they can claim is so small that certified labor affairs consultants would be reluctant to take their cases will now be able to apply for such payments at no cost.

? Substitute payments

(Unit : persons, 100 million won)

Total
Workplaces with fewer than 10 employees
No. of workers
Amount paid
No. of workers
Amount paid
As of Nov. 30, 2011
45,360
2,134
9,155
(20.2)
450
(21.1)
2010
58,718
2,639
9,691
(16.5)
450
(17.1)

However, workplaces that pay their workers an average of 2 million won or more a month are excluded from the assistance services even when they are employing fewer than 10 workers.

A certified labor affairs consultant providing assistance services cannot charge fees to the worker claiming substitute payments. However, if the amount of substitute payments paid exceeds 10.2 million won, he/she can receive a fee of up to 2% of the paid amount directly from the worker concerned.

Any worker who wants to apply for substitute payments should visit the working conditions improvement division of the local employment and labor office in the area where the workplace to be recognized as bankrupt is located.

After counseling with a certified labor affairs consultant appointed to assist him/her in applying for substitute payments, the worker proceeds with necessary application procedures.

For more details, please call the competent local employment and labor office or visit the MOEL website (www.moel.go.kr).


http://www.moel.go.kr/english/topic/working_view.jsp?&idx=892

courtesy of MOEL