According to a report by People Power Party (PPP) lawmaker Kim So-hee based on data from the Korea Workers' Compensation and Welfare Service on Monday, government payouts to cover these unpaid wages have nearly doubled over the past four years.
In 2022, about 79.1 billion Korean won (US$58.8 million) in back wages was paid to foreign workers, up 96.2 percent from the 40.3 billion won paid in 2019. Korea was home to 522,571 foreign workers at the time, according to the Ministry of Justice.
Almost half of these payments or 49 percent were made to workers employed by small businesses with fewer than five employees. Many of these smaller enterprises are not bound by labor regulations and often face financial constraints, leading to higher rates of unpaid wages.
The situation has been further exacerbated by business closures, which hit a record high last year, with nearly one million businesses going bankrupt.
According to a report by the National Tax Service released in August, some 986,487 businesses closed in 2023. A prolonged economic downturn worsened by rising interest rates was cited as the main reason for their closures, which particularly affected smaller businesses.
Kim stressed the need for better support for foreign workers, calling for the establishment of a channel to address wage disputes and increase labor-related inspections.
