Starting next year, the maximum reward for whistleblowers who report fraudulent claims of substitute payment—under which the state pays part of wages on behalf of employers to workers who did not receive their pay—will be raised to 2 billion won. That is double the previous 1 billion won.
The Ministry of Employment and Labor (MOEL) said on the 6th that a revision to the Enforcement Decree of the Wage Claim Guarantee Act containing these measures was reviewed and approved at a Cabinet meeting.
The substitute payment is a wage claim guarantee system in which the state pays part of unpaid wages on behalf of employers to workers who did not receive their pay due to corporate bankruptcy or wage arrears.
However, concerns have been raised about fiscal soundness due to the low cumulative recovery rate of the substitute payment system. As of last year, the cumulative recovery rate was only 30%. This has been analyzed as being largely because employers and workers collude to receive payments fraudulently. For example, when reporting wage arrears, they insert fictitious workers or inflate the arrears amount.
In response, the ministry will raise the cap on rewards for reporting fraudulent claims of substitute payment from 1 billion won to 2 billion won.
Minister Kim Young-hoon of the ministry said, "Raising the cap on reporting rewards is a measure to root out fraudulent claims of substitute payment," and added, "We will enhance the sustainability of the substitute payment system so...
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