Labor ministry seeks comments on expanded wage-arrears loans

The labor ministry said it would seek public comment on proposed rules for employer loans to settle unpaid wages, as 91,206 workers had been affected by wage arrears through May.

Employers that provide collateral could obtain special loans of up to 1 billion won, against an existing per-workplace ceiling of 150 million won. The expansion follows the government's September 2025 wage-arrears eradication plan, which calls for raising the collateral-backed limit to encourage active settlement at workplaces with large-scale arrears.

"The Lee Jae Myung government will thoroughly analyze the causes of wage arrears so that policies reach precisely where they are needed," Kim Young-hoon, the labor minister, said.

Cumulative wage arrears reached 773 billion won by May. Workplaces with fewer than five employees accounted for 260 billion won, while establishments employing five to 29 people accounted for 314 billion won.

The proposed guidelines, which reflect amendments to the enforcement rules of the Wage Claim Guarantee Act, would define special loans, eligible employers and the jurisdiction of regional labor offices. They would set procedures for receiving employer confirmation applications, reviewing documents, checking facts and seeking expert advice when necessary.

The rules would also create a special-loan review committee and set provisions on its operation, membership, member terms, deliberations, meeting arrangements and allowances. They cover notification of review results, information management, supplementary operating rules and a deadline for reviewing the regulations. The ministry will accept comments from institutions, groups and individuals through Aug. 15.