A violation of the Labor Standards Act (근로기준법) can become a criminal case against the employer from a single petition (진정) filed with the Regional Employment and Labor Office (노동청). Before the investigation, you need to decide on a direction: whether the charge can be contested, or whether the arrears should be settled and the level of disposition reduced.
How a case begins
- Petition or complaint filedThe worker files a petition (진정) or criminal complaint (고소) with a Regional Employment and Labor Office (지방고용노동관서)
- Summons to appearThe labor inspector (근로감독관) notifies the employer of the date and time to appear and the documents to prepare
- Employer questioningThe inspector checks the labor contract, wage ledger and attendance records, and prepares a statement record
- Arrears amount fixed and corrective order issuedIf you pay within the deadline, the petition case may be closed
- Referral to prosecutorsIf wages remain unpaid and the worker still wants punishment, the case is opened against you and referred to the prosecutors, who decide the disposition
- Summary order or formal trialIf you object to a summary order (약식명령) imposing a fine, you must request a formal trial within 7 days
A labor inspector has the powers of a judicial police officer (사법경찰관) for violations of the Labor Standards Act. Even in a petition case, what you say during the investigation can become evidence in the criminal case, so you need to be careful from your first appearance.
Cases where the charge can be contested
Not every wage arrears case ends with the employer being held responsible. Cases in which courts have found the employer not guilty generally fall into the types below.
| Issue | What is contested |
|---|---|
| Worker status (근로자성) | Whether the petitioner was actually an independent business owner or a commissioned contractor |
| Status as employer | Whether the suspect is an employer or a person in charge of business management as defined by the law |
| Contracting relationship | Whether there was a genuine contract for work, which is the premise of joint liability, or instead a mandate or agency contract |
| Whether the money is wages | Whether the claimed money is wages paid in return for work, or a gratuitous payment or expense reimbursement |
| Unavoidable inability to pay | Circumstances in which payment was truly impossible despite every effort |
| Disputed amount | Whether, because working hours or allowance calculations were open to dispute, there was a reasonable ground for non-payment |
If there were grounds to dispute whether the duty to pay wages existed or how far it extended, criminal intent may be denied. However, difficulty in running the business is not enough by itself. You must show with documents that you made every effort to pay the wages and that non-payment was still unavoidable.
Reducing the disposition when you admit the violation
- Pay the unpaid wages in full, or as much as possible, and submit the payment records
- Obtain a statement from the worker that they do not want punishment (처벌불원서) (in offenses that cannot be prosecuted against the victim's will (반의사불벌), the case is closed as no right to prosecute (공소권 없음))
- Submit documents showing measures to prevent recurrence, such as an improved labor contract form and a wage ledger
- Organize mitigating materials, such as the size of the business, its financial situation and the absence of prior convictions for the same kind of offense
- Show your intention to make amends through a criminal deposit (형사공탁) or an installment payment plan
Under the amended law that took effect in October 2025, employers such as those named on the public list for habitual wage arrears can be punished even if the worker does not want punishment, and workers can also claim damages of up to 3 times the unpaid amount. If you have a history of wage arrears, do not assume that a settlement alone will end the case.
Issues seen in resolved cases
| Case | Issue | Result |
|---|---|---|
| Joint liability as contractor of the chair of a housing association promotion committee (74 workers) | Whether the contract to recruit association members was a contract for work or a mandate | Not guilty |
| Joint liability as contractor of the acting chair of a promotion committee (30 workers) | The fixed per-household fee structure and the wording of the contract | Not guilty |
| Failure to deliver a labor contract at a mart with 3 regular employees | Measures to prevent recurrence after the violation was admitted | Suspension of sentence (선고유예) |
| Unpaid dismissal notice pay for a forklift driver | Sentencing after the claims of mutual termination and verbal notice were rejected | Fine of KRW 500,000 |
In the contractor joint liability cases, what decided the outcome was not the title of the contract but whether the structure paid for the completion of work or entrusted the handling of tasks. In the dismissal notice case, telling the worker to "go look for another job" was not accepted as a notice that specified the date of dismissal.
Settling civil liability as well
Even if the criminal case ends with a fine or a decision not to prosecute, the duty to pay wages remains. The worker can claim the principal and delinquency interest of 20% per year through a payment order or a lawsuit. If the state has first paid a substitute payment of unpaid wages (대지급금), the Korea Workers' Compensation and Welfare Service (근로복지공단) will seek reimbursement from the employer.
If you do not settle the unpaid principal, the delinquency interest and the substitute payment reimbursement together when you reach a criminal settlement, you may face further claims after the case is over.
Penalty provisions and statutory penalties for employers
| Offense | Basis | Summary |
|---|---|---|
| Non-payment of wages, severance pay, etc. | Labor Standards Act (근로기준법) Articles 36 and 43, Article 109 | Imprisonment for up to 3 years or a fine of up to KRW 30 million (cannot be prosecuted against the victim's will) |
| Violation of the contractor's joint liability for wages | Labor Standards Act Articles 44 and 44-2, Article 109 | Imprisonment for up to 3 years or a fine of up to KRW 30 million (cannot be prosecuted against the victim's will) |
| Violation of dismissal notice | Labor Standards Act Article 26, Article 110 | Imprisonment for up to 2 years or a fine of up to KRW 20 million |
| Violation of the overtime work limit | Labor Standards Act Article 53, Article 110 | Imprisonment for up to 2 years or a fine of up to KRW 20 million |
| Violation of the duty to state working conditions in writing and deliver them | Labor Standards Act Article 17, Article 114 | Fine of up to KRW 5 million |
Even for wage arrears, which cannot be prosecuted against the victim's will, the investigation and trial continue until the worker states that they do not want punishment. Violation of dismissal notice and failure to deliver a labor contract are not offenses of that kind, so the case does not end even if you settle with the worker.
What to prepare before appearing at the Labor Office
- Check the claim items and amounts in the petition or complaint.
- Collect the labor contract, wage ledger, payroll transfer records and attendance records.
- If the case involves a contracting or service contract, prepare the contract and the payment records.
- Separate the items whose amounts are disputed from the items you accept.
- If you can make a payment plan, set specific dates and amounts.
- If the appearance date is too close, ask the inspector to adjust the schedule.
Criminal cases under the Labor Standards Act: frequently asked questions
What happens if I do not appear at the Labor Office?
If I pay all the unpaid wages, will I avoid punishment?
It is a corporate case. Will the representative director be punished personally?
I received a fine by summary order.
Applicable law: Labor Standards Act (근로기준법). Written based on the laws in force on 2026-09-17. This page provides general legal information and is not legal advice on a specific case. Labor laws and court decisions change often, so decide how to respond after consulting a lawyer who has reviewed your documents, such as your contract and any notices you received.
This page is an English translation of the Korean original. If the two differ, the Korean version prevails. Korean page ›