Administrative & Labor

Unpaid Wage & Severance Pay Claims Lawyer

Unpaid Wage & Severance Pay Claims Lawyer | What you can claim and how to get it paid

Summary

Wages and severance pay are treated as protected debts under Korean labor law, and employers who fail to pay them can face both civil liability and criminal exposure. An employer who withholds wages or severance without a valid reason can be reported to the Ministry of Employment and Labor and, separately, sued in civil court for the unpaid amount plus statutory delayed-payment interest (근로기준법 제36조, 제37조). Severance pay itself is a statutory entitlement for any employee who worked one year or more, calculated as at least 30 days' average wage per year of service (근로자퇴직급여 보장법 제8조). This page walks through what counts as wages, the deadlines you need to watch, and how the claim process works step by step.

Administrative · Labor Governing law: Labor Standards Act Governing law: Employee Retirement Benefit Security Act

Unpaid Wage & Severance Pay Claims | What Counts as Unpaid Wages and Severance

Not every dispute over money is a 'wage' dispute in the legal sense, and getting this classification right determines which remedy applies. Here is how wages and severance are defined and what commonly gets missed.

Definition of wages under the law

Wages include not only base salary but any money or valuable benefit an employer pays an employee for work, including regular bonuses, allowances, and certain fixed overtime pay if they are paid regularly and uniformly (근로기준법 제2조 제1항 제5호). Employers who fail to pay wages within 14 days of the agreed payment date without an employee's consent to a different schedule are in violation of the wage payment obligation (근로기준법 제36조). Whether an irregular bonus or performance pay counts as 'wages' is often the actual point of dispute in these cases.

Severance pay eligibility and calculation

An employer must pay severance to any employee who has worked continuously for one year or more, calculated at no less than an average of 30 days' wages for each year of continuous service (근로자퇴직급여 보장법 제4조, 제8조). This applies regardless of whether the workplace calls the position 'regular,' 'contract,' or 'part-time,' as long as the employee worked at least 15 hours per week on average. Severance must be paid within 14 days of the date the employment relationship ends, unless the parties agree otherwise by special agreement (근로자퇴직급여 보장법 제9조).

Unused annual leave allowance and other frequently missed claims

Compensation for unused annual paid leave, unpaid overtime/night/holiday premium pay (calculated at 50% extra of ordinary wages), and unpaid extended-hours pay are also treated as wage claims and are commonly overlooked when employees calculate what they are owed (근로기준법 제56조, 제60조). Many workers underestimate their claim because they only count base salary and forget these statutory add-ons.

Unpaid Wage & Severance Pay Claims | The Statute of Limitations You Cannot Miss

Unlike many labor disputes, the wage claim deadline is fixed and does not get extended for personal circumstances, so knowing exactly when your clock started matters.

When the clock starts running

For ordinary wages, the 3-year period starts from each regular payday on which the wage was not paid. For severance pay, it starts from the day after the employment relationship legally ends, not from when you first ask for payment. This means employees who wait to see if an employer will 'eventually pay' can lose part of their claim without realizing it.

What interrupts or affects the deadline

Filing a labor complaint with the Ministry of Employment and Labor, sending a formal demand, or filing a civil suit can affect how the limitation period is treated, but simply having verbal promises from the employer does not reliably stop the clock. If you are close to the 3-year mark, filing a complaint or petition first, even before consulting further, preserves your position.

⚠ Wage and severance claims expire after 3 years

Both wage claims and severance pay claims are extinguished if not exercised within 3 years from the date each amount became due (근로기준법 제49조; 근로자퇴직급여 보장법 제10조). For severance, this generally runs from the day after your last working day. If part of your pay was withheld across multiple months, each month's claim can expire separately, so earlier unpaid months may already be time-barred by the time you file.

Unpaid Wage & Severance Pay Claims | How Employers Are Held Accountable

Nonpayment of wages is not just a civil debt in Korea — it can also be a criminal matter, which gives employees more than one point of leverage.

Criminal liability for nonpayment

An employer who fails to pay wages, severance, or other statutory pay without justifiable reason can be subject to criminal punishment of up to 3 years imprisonment or a fine of up to 30 million won (근로기준법 제109조, referencing violations of 제36조, 제43조). This criminal exposure is often what motivates an employer to settle once a Ministry complaint is filed, even before the case proceeds further.

Delayed payment interest on top of the principal

If severance pay is not paid within 14 days of the employment ending, statutory interest of 20% per annum accrues on the unpaid amount until it is paid (근로자퇴직급여 보장법 제9조 제2항). This interest rate is significantly higher than ordinary civil interest rates and is specifically designed to pressure employers into prompt payment.

Wage Claim Guarantee System for insolvent employers

If your employer has gone bankrupt, closed the business, or is otherwise unable to pay, you may be eligible to receive a portion of your unpaid wages and severance from the government-run Wage Claim Guarantee Fund rather than waiting on an insolvent employer (임금채권보장법 제7조). This process runs through the Ministry of Employment and Labor and has its own documentation requirements separate from a regular wage complaint.

Unpaid Wage & Severance Pay Claims | From First Consultation to Recovery

Calculate the claim amount
Gather pay stubs, employment contract, work logs, and bank statements to calculate exactly how much wage and severance is owed, including overtime and leave allowances often left out.

File a complaint with the Ministry of Employment and Labor
Most wage claims start with a complaint (진정) or petition (고소) filed with the regional Employment and Labor Office, which will call in the employer for a fact-finding session and can refer the case for criminal investigation if unresolved.

Attempt mediation or receive a confirmation of unpaid wages
The labor inspector may mediate a settlement, or issue a written confirmation of the unpaid amount, which becomes useful evidence for a civil claim or Wage Claim Guarantee application if the employer still does not pay.

File a civil suit or small claims wage payment order if unpaid
If the employer still refuses to pay, you can file a civil lawsuit, a payment order (지급명령), or a simplified wage recovery procedure to obtain an enforceable judgment for the unpaid amount plus delayed-payment interest.

Enforce the judgment or apply for the Wage Claim Guarantee Fund
Once a judgment or confirmed amount exists, you can proceed to asset seizure against the employer, or apply to the Wage Claim Guarantee Fund if the employer is insolvent and unable to pay directly.

Unpaid Wage & Severance Pay Claims | How Fees Are Set

Consultation
An initial review of your pay records and employment contract to estimate the unpaid amount and recommend whether a Ministry complaint, civil suit, or both is the right starting point.

Retainer fee
Typically based on the complexity of the case (number of pay periods involved, whether overtime/leave calculations are disputed, and whether criminal referral is likely) rather than a flat rate.

Contingency or success fee
In wage recovery matters, a portion of the fee structure is often tied to the amount actually recovered, since the case outcome directly correlates to a specific sum of money.

Disbursements
Court filing fees, service of process costs, and any expert calculation fees (e.g., for complex average wage calculations) are billed separately from the legal fee.

※ Costs vary depending on case complexity and specific circumstances; exact fees will be provided during consultation. No specific outcome is guaranteed.

Unpaid Wage & Severance Pay Claims | Self-Check Before You File

1️⃣ Have You Confirmed What's Actually Owed?

Do your pay stubs match what your employment contract says you should be paid?
Have you calculated unpaid overtime, night, and holiday premium pay separately from base salary?
Have you included unused annual leave compensation in your total?
Have you confirmed your exact last working day for the severance deadline calculation?

2️⃣ Are You Within the Deadline?

Has it been less than 3 years since each unpaid payday?
Has it been less than 3 years since your employment relationship ended?
If some months are close to the 3-year mark, have you filed something to preserve your claim?

3️⃣ Is Your Employer Still Solvent?

Is the business still operating, or has it closed or filed for bankruptcy?
If the employer cannot pay, have you looked into the Wage Claim Guarantee Fund process?
Do you have documentation proving the employer's inability to pay (e.g., bankruptcy filing, closure notice)?

4️⃣ Do You Have the Right Evidence?

Do you have your employment contract or offer letter?
Do you have pay stubs or bank transfer records showing what was actually paid?
Do you have work logs, time-clock records, or messages showing actual hours worked?
Have you kept any written or text communication where the employer acknowledged owing you money?

Frequently Asked Questions

Q. How long does it take to get unpaid wages paid after filing a complaint?

A. A Ministry of Employment and Labor complaint typically takes a few weeks to a couple of months for the initial fact-finding stage, but if the employer disputes the amount or refuses to pay, resolution through mediation, criminal referral, or civil suit can take considerably longer. Simple cases with clear documentation tend to resolve faster than disputes over calculation methods.

Q. Can I still claim unpaid wages after I've already quit my job?

A. Yes. Resigning does not waive your right to unpaid wages or severance, and you can file a complaint or lawsuit after leaving as long as you are within the 3-year statute of limitations (근로기준법 제49조). In fact, severance pay by definition only becomes due after your employment ends.

Q. What if my employer says the company has no money to pay?

A. An employer's financial difficulty is not a valid legal defense to withholding wages under the Labor Standards Act, though if the business is genuinely insolvent or has closed, you may need to pursue the Wage Claim Guarantee Fund process instead of collecting directly from the employer (임금채권보장법 제7조).

Q. Does severance pay apply to contract workers and part-timers?

A. Yes, severance pay applies to any employee who worked one year or more and averaged at least 15 hours per week, regardless of whether the position was called 'contract,' 'temporary,' or 'part-time' (근로자퇴직급여 보장법 제4조). The label used in the contract does not determine eligibility; actual working conditions do.

Q. Can I file a wage claim if I don't have a written employment contract?

A. Yes, a written contract makes proving the terms easier, but you can still file a claim using pay stubs, bank transfer records, text messages, work schedules, or witness statements to establish the employment relationship and pay terms. The absence of a contract is itself sometimes a separate violation the employer may be liable for.

Q. What is the difference between filing a complaint (진정) and a criminal complaint (고소)?

A. A 진정 (petition) generally seeks administrative mediation and payment first, while a 고소 (criminal complaint) more directly pursues criminal punishment of the employer under Article 109 of the Labor Standards Act. Many employees start with a 진정 because it can still lead to a criminal referral if the employer doesn't cooperate, while keeping the door open for settlement.

Q. Is there interest added to unpaid severance pay?

A. Yes, 20% annual interest accrues on unpaid severance starting 14 days after your employment ends, which is separate from and in addition to the principal amount owed (근로자퇴직급여 보장법 제9조 제2항). This interest does not automatically apply to ordinary unpaid wages in the same way, so severance claims can grow substantially faster over time.

Q. Can my employer retaliate against me for filing a wage complaint?

A. Retaliatory measures such as unfair dismissal or disadvantageous treatment specifically because an employee filed a labor complaint can themselves be separately unlawful and reportable. This is a distinct issue from the wage claim itself but is worth raising if it occurs.

Q. What happens if my employer partially paid but still owes a balance?

A. You can pursue a claim for just the unpaid balance, and partial payment does not waive your right to the rest unless you signed a settlement or release stating otherwise. It's worth reviewing any settlement document carefully before signing, since some employers ask employees to sign a waiver in exchange for partial payment.

Q. Do I need a lawyer to file a complaint with the Ministry of Employment and Labor?

A. You can file a complaint yourself without a lawyer, since the process is designed to be accessible directly to workers. However, legal assistance becomes more valuable when the calculation is disputed, the employer refuses to cooperate, or the case needs to escalate to a civil lawsuit or criminal referral.

Official References

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