Recovering Unpaid Wages and Severance Pay with a Lawyer

What Money You Can Claim

Unpaid wages include not only base pay but also overtime, night, and holiday work allowances, weekly holiday allowance (주휴수당), pay for annual leave left unused at the time of leaving, and agreed bonuses. Even under a comprehensive wage contract (포괄임금 계약), if the agreed allowance is too small compared with the hours actually worked, you can claim the difference.

Severance pay arises for workers with continuous service of at least 1 year who work an average of at least 15 hours per week over 4 weeks. It is at least 30 days of average wage for each year of continuous service. Average wage is calculated by dividing the total wages received in the 3 months before leaving by the total number of days in that period.

Recovering Wages by Filing a Labor Office Complaint

If you file an unpaid wage complaint with the Regional Employment and Labor Office (지방고용노동관서) that has jurisdiction over the workplace you left, a labor inspector (근로감독관) calls in both sides and investigates whether wages are unpaid and how much. If the employer pays during the investigation, the case ends. If the employer does not pay, the inspector confirms the unpaid amount, opens a criminal case against the employer, and refers it to the prosecutors' office.

A complaint costs nothing, and because it puts the pressure of criminal punishment on the employer, it is often effective in getting payment. However, the Regional Employment and Labor Office is not an agency that collects the money for you. If the employer never pays, you have to move on to civil procedures or substitute payment.

During the inspector's investigation, employers often offer to pay only part of the amount on condition that you sign a statement that you do not wish to see them punished (처벌불원서). Once you express that wish, you cannot ask for punishment again even if you withdraw it, so first check that you have a way to collect the remaining amount.

Civil Lawsuits, Payment Orders, and Enforcement

If the amount is 30 million won or less, you can use the small claims procedure (소액사건). If the employer is not expected to dispute the amount, you can quickly obtain an enforcement title (집행권원) through a payment order (지급명령). The Certificate of Unpaid Wages, etc. and Employer Confirmation (체불임금등·사업주확인서) issued by the Regional Employment and Labor Office is used in a lawsuit as evidence that the wages are unpaid.

Even after a judgment or payment order becomes final, if the company does not pay voluntarily, you must seize the company's bank deposits, its accounts receivable from customers, or its real estate. If the company seems to be preparing to close down, it is important to freeze its assets by provisional attachment (가압류) before filing the lawsuit.

Substitute Payment When the Company Has No Money

If the employer cannot pay, you can use the substitute payment (대지급금) system, in which the Korea Workers' Compensation and Welfare Service (근로복지공단) first pays part of the unpaid wages. The Service then seeks reimbursement from the employer for the amount it paid.

Substitute payment has an application deadline, and it also takes time to obtain the required documents. If the company's situation looks bad, it is better to prepare to meet the substitute payment requirements at the same time as filing the complaint with the Regional Employment and Labor Office.

When a Contracting Party Can Be Held Liable

If work is carried out through several layers of subcontracting and a subcontractor cannot pay wages because of a fault of the immediate upper-tier contractor, that contractor is jointly liable (Article 44 of the Labor Standards Act (근로기준법)). In construction, if work is subcontracted to an unregistered construction business operator, the immediate upper-tier contractor must pay the wages jointly with the subcontractor (Article 44-2).

However, joint liability applies only if the contract is a contract for work (도급) as defined by law. There is a court ruling that it does not apply to a service or agency contract if in substance it is a mandate (위임) to handle administrative tasks, so you must first check the contract structure.

Rules on Wages and Severance Pay

Failure to pay wages or severance pay is an offense that cannot be punished if the worker states that they do not want the employer punished (반의사불벌죄). From October 2025, sanctions on employers who repeatedly fail to pay wages have been strengthened, so in certain cases exceptions to this principle and claims for increased damages are allowed.

What to Prepare If You Have Not Been Paid

• Check your last working day, the date 14 days after it, and the date the 3-year limitation period expires.
• Gather your employment contract, pay slips, and bank deposit records.
• Back up clock-in/clock-out records or messenger records that show your actual working hours.
• List the unpaid amount for each item, month by month.
• Find out whether the company is preparing to close or relocate and whether it has any remaining assets.
• Sign a statement that you do not wish to see the employer punished, or a settlement agreement, only after payment of the remaining amount is secured.