In short: when an employee dies or leaves a job in Korea, the employer must pay all wages and any other money owed within 14 days, unless the parties agree to extend it because of special circumstances (Labor Standards Act, Article 36). Wages must also be paid directly to the employee, in full, in currency, at least once a month on a fixed date (Labor Standards Act, Article 43). Failing to do either is punishable by up to 3 years’ imprisonment or a fine of up to ₩30 million under Article 109 of the Labor Standards Act until October 7, 2026, and by up to 5 years’ imprisonment or a fine of up to ₩50 million under Article 107 from October 8, 2026, though prosecution cannot go forward against the employee’s clearly expressed wishes (Article 109(2); Article 107(2) from October 8, 2026). Separately, the Wage Claim Guarantee Act lets an eligible employee claim a capped substitute payment from a government fund rather than only from the employer directly.
What the law requires
Settlement within 14 days (Article 36). When an employee dies or retires — including resignation, dismissal, or the end of a fixed-term contract — the employer must pay the wages, compensation, and any other money or valuables owed within 14 days of the date that obligation arose. The only exception is where the parties agree between themselves to extend the deadline for a special reason; there is no automatic extension.
Four rules for how wages are paid (Article 43). Separately from the 14-day settlement deadline, Article 43 sets out the basic rules for paying wages at all, whether or not someone has left the job:
- Wages must be paid in currency, not in kind — unless a statute, regulation, or collective agreement specifically allows otherwise.
- Wages must be paid directly to the employee, not routed through a third party.
- Wages must be paid in full — deductions are only allowed where a statute, regulation, or collective agreement specifically permits them.
- Wages must be paid at least once a month, on a fixed date — with an exception for irregular payments such as one-off bonuses or allowances, or wages the Presidential Decree separately designates.
These four rules and the 14-day settlement rule both apply regardless of business size — they are not limited to workplaces above a certain number of employees.
Public disclosure of habitual non-payers (Article 43-2). Separately from criminal penalties, the Ministry of Employment and Labor can publish the identity of an employer who has been convicted at least twice for unpaid wages within the 3 years before the disclosure date, where the total amount unpaid in the year before disclosure is at least ₩30 million. The employer gets at least three months to respond before any disclosure. A single unpaid-wage conviction does not, by itself, put an employer on this list.
Penalties until October 7, 2026 (Article 109). Violating Article 36, 43, 44, 44-2, 46, 51-3, 52(2)2, or 56 is punishable by up to 3 years’ imprisonment or a fine of up to ₩30 million (Article 109(1)). Prosecution for these violations cannot go forward against the clearly expressed wishes of the employee who suffered the non-payment (Article 109(2)). The one exception is an employer who has already been publicly disclosed under Article 43-2 and violates again during the disclosure period; in that case the bar on prosecuting against the victim’s wishes does not apply.
Penalties from October 8, 2026 (Article 107). This penalty structure moves from Article 109 to Article 107 of the Labor Standards Act, and the maximum penalty rises to 5 years’ imprisonment or a fine of up to ₩50 million. The rule barring prosecution against the victim’s clearly expressed wishes — with the same exception for employers already on the public disclosure list — carries over unchanged, just renumbered to Article 107(2). The article numbers cited elsewhere in this piece (Article 36, Article 43, and so on) do not change; only the penalty article’s number and the size of the penalty change. A violation is judged under the law in force when it occurred (Criminal Act, Article 1(1)).
Substitute payment (daejigeupgeum) through the Wage Claim Guarantee Fund
Beyond pursuing an employer directly, an employee may be able to claim a substitute payment from the Wage Claim Guarantee Fund, administered by the Minister of Employment and Labor. This runs under the Wage Claim Guarantee Act rather than the Labor Standards Act, and it pays the employee on the employer’s behalf rather than requiring the employee to first collect from the employer.
For retired employees (Article 7). A retired employee who has not been paid can claim a substitute payment where the employer falls into one of five situations: (1) a court has commenced rehabilitation proceedings against the employer, (2) a court has declared the employer bankrupt, (3) the Minister of Employment and Labor has determined, under criteria set by Presidential Decree, that the employer is unable to pay, (4) a court judgment, payment order, court settlement, civil mediation, or performance-recommendation ruling orders the employer to pay, or (5) the Minister has issued a written confirmation, under Article 12 of the Act, that the employer has unpaid wages owed to the employee.
The scope of what can be substitute-paid differs depending on which of those situations applies:
- Situations (1)–(3), called “bankruptcy substitute payment” (도산대지급금): the final 6 months of wages, the final 3 years of retirement benefits, the final 6 months of shutdown allowance, and the final 6 months of maternity leave benefits.
- Situations (4)–(5), called “simple substitute payment” (간이대지급금): a narrower slice of unpaid wages plus the final 3 years of retirement benefits, the final 3 months of shutdown allowance, and the final 3 months of maternity leave benefits.
For employees still on the job (Article 7-2). Where an employer falls under situation (4) or (5) above, an employee whose employment has not ended can also claim a substitute payment, covering unpaid wages, shutdown allowance, and maternity leave benefits for the 3 months counting back from the most recent date of non-payment, measured from the day the employee files a lawsuit or a petition, complaint, or accusation against the employer (Article 7-2(2)). This can only be claimed once while working for the same business (Article 7-2(4)). Not every current employee qualifies: the Enforcement Decree limits this payment to an employee whose employment had not ended when the lawsuit or petition was filed (excluding day laborers on contracts shorter than one month), whose contractual wage is below an amount set by Ministry of Employment and Labor notice, and who filed within 2 years (lawsuit route) or 1 year (petition route) after the day following the most recent non-payment; the employer must also have run the business for at least 6 months (Enforcement Decree of the Wage Claim Guarantee Act, Articles 7(3) and 8(4)). The notified wage threshold is not reproduced here.
Where one type has already been paid, that amount is deducted before the other type is paid (Article 7(3)) — the Act prevents double payment of the same unpaid amount by offsetting one substitute payment against the other.
Upper limits. The amount payable is capped, and the cap depends on the employee’s age at the time of retirement (for bankruptcy substitute payment) and on the type of payment. Under the Enforcement Decree of the Wage Claim Guarantee Act, the Minister of Employment and Labor sets and publishes these caps by notice, taking into account wage and income levels, inflation, the fund’s financial condition, and (for bankruptcy substitute payment) the employee’s age at retirement.
The current caps come from Ministry of Employment and Labor Notice No. 2021-81, issued October 14, 2021 — the most recent version of this notice as of this writing, meaning the figures below reflect 2021 price levels rather than a more recent adjustment:
Bankruptcy substitute payment, by age at retirement (₩10,000 units):
| Item | Under 30 | 30–39 | 40–49 | 50–59 | 60 and over |
|---|---|---|---|---|---|
| Wages (per month) | 220 | 310 | 350 | 330 | 230 |
| Retirement benefits (per year) | 220 | 310 | 350 | 330 | 230 |
| Shutdown allowance (per month) | 154 | 217 | 245 | 231 | 161 |
| Maternity leave benefit (per month) | 310 (all ages) |
Simple substitute payment:
| Item | Cap |
|---|---|
| Wages, maternity leave benefit, shutdown allowance | ₩7,000,000 |
| Retirement benefits | ₩7,000,000 |
For simple substitute payment, the combined cap across all items is ₩10,000,000, and the retirement-benefit component only applies to a retired employee (not to an employee still on the job).
Filing a claim
There are two separate routes, and they can run side by side.
1. A wage petition (jinjeong) to the Ministry of Employment and Labor. An employee who has not been paid can file a petition asking the Ministry to have the unpaid wages paid. The Ministry’s Labor Portal lists two ways to file: online through the Labor Portal (labor.moel.go.kr, under the labor-standards complaint menu), or in person at the customer support office of the regional employment and labor office that covers the workplace. The Ministry states a processing period of 25 days, excluding Saturdays and public holidays, which can be extended twice. General questions go to the Ministry’s call center at 1350 (weekdays 9:00 a.m. to 6:00 p.m.; call charges apply).
2. A simple substitute payment claim to the Korea Workers’ Compensation & Welfare Service. For situation (5) above, you first get a written confirmation of the unpaid wages and the employer (체불 임금등·사업주 확인서) from the regional employment and labor office, which issues it on the Minister’s behalf (Enforcement Decree of the Wage Claim Guarantee Act, Article 24(1)1). You then file the simple substitute payment claim form with the Korea Workers’ Compensation & Welfare Service, attaching the original or a copy of that confirmation, or, for situation (4), the judgment or other ruling (Enforcement Rule of the Wage Claim Guarantee Act, Article 5(2)). The deadline is 6 months from the date the confirmation was first issued, or 1 year from the date of the judgment or ruling (Enforcement Decree, Article 9(1)2–4). Unless there are special circumstances, the Service is to decide and pay within 14 days of receiving the claim (Enforcement Rule, Article 8(2)).
Three common misconceptions
“If my employer is bankrupt, I have no way to get paid.” The Wage Claim Guarantee Act exists specifically for this situation. Rehabilitation proceedings or a bankruptcy declaration against the employer is one of the triggers for bankruptcy substitute payment under Article 7(1), meaning a bankrupt employer does not automatically mean unpaid wages are unrecoverable — though the amount is capped, not a guarantee of the full sum owed.
“Unpaid wages will automatically be prosecuted as a crime.” Under Article 109(2) (Article 107(2) from October 8, 2026), prosecution for a violation of Article 36 or 43 generally cannot proceed against the employee’s clearly expressed wishes — in other words, the employee’s position matters to whether a criminal case moves forward, except where the employer is already on the public disclosure list under Article 43-2 and re-offends during the disclosure period.
“The substitute-payment system pays whatever amount I’m owed.” It does not. Both bankruptcy and simple substitute payments are capped under Ministry of Employment and Labor Notice No. 2021-81, and the simple substitute payment additionally covers a narrower period than the bankruptcy substitute payment. An employee owed more than the applicable cap needs to pursue the remainder through other means.
A note on translations: the official English translation of the Labor Standards Act was published on October 22, 2024, before the Korean amendments effective August 20, 2026 and October 8, 2026, so treat the English text as a guide and check the current Korean text for anything time-sensitive, and the official English translation of the Wage Claim Guarantee Act (November 11, 2025) predates its current Korean text (effective August 20, 2026).