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Unpaid Wages Are No Longer Just a “Civil Matter”

Failure to pay wages is no longer treated as a simple contractual or civil issue. It may result in criminal liability under the Labor Standards Act.
 

In particular, recent legislative amendments have significantly strengthened the maximum penalties applicable to employers involved in unpaid wage cases, increasing the maximum sentence from up to three years’ imprisonment to up to five years’ imprisonment.
 

Under the revised law, the maximum penalty for employers responsible for unpaid wages has been increased from:
 

Up to 3 years’ imprisonment or a fine of up to KRW 30 million

to:

Up to 5 years’ imprisonment or a fine of up to KRW 50 million

This means unpaid wage cases are no longer matters that simply end with administrative fines. Employers must now realistically consider the possibility of actual imprisonment.
 

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The Initial Response During the Investigation Stage Determines the Outcome

The moment a criminal complaint regarding unpaid wages is filed, criminal proceedings effectively begin.
 

At this stage, the following factors become critically important:
 

① Whether there was intentional misconduct
 

② The employer’s actual financial ability to make payment
 

③ Efforts made toward repayment or settlement
 

Investigative authorities do not focus solely on whether wages were unpaid. They place significant weight on how the employer responded to the situation.
 

Depending on the employer’s initial statements and conduct, the case may be viewed either as:
 

• “Malicious and intentional nonpayment of wages,” or
• “An unavoidable financial or managerial difficulty”

This distinction often has a direct and substantial impact on the severity of punishment.
 

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Why Legal Representation Matters

One of the biggest mistakes employers make in wage-related cases is assuming:
 

“I’ll just attend the investigation first and deal with it later.”
 

However, once a statement is submitted during an investigation, it cannot easily be reversed.
 

Legal counsel plays an essential role in areas such as:
 

• Legally restructuring and explaining the circumstances surrounding the unpaid wages
• Organizing evidence demonstrating payment intent and repayment efforts
• Designing settlement strategies and determining the appropriate timing
• Establishing an effective response strategy toward investigative authorities

In unpaid wage criminal cases, whether and when a settlement is reached often becomes one of the most decisive factors affecting the final outcome.
 

There are many cases where employers either attempt settlements recklessly or, conversely, neglect the matter entirely, ultimately worsening the situation.
 

Improper handling of the case may lead not merely to fines, but to actual imprisonment. This is therefore not an issue that should ever be taken lightly.
 

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Decent Law Firm’s Response Strategy

Decent Law Firm approaches unpaid wage cases not merely from the perspective of defense, but with a primary focus on minimizing criminal liability and overall legal risk.
 

Our main response strategies include:
 

• Analyzing the structural causes of unpaid wages and narrowing the scope of liability
• Establishing strategies to demonstrate lack of intentional misconduct
• Designing phased settlement processes
• Simultaneously managing criminal proceedings and related civil risks

In particular, wage-related disputes arising during business operations require a structural and strategic approach rather than the type of response typically used in ordinary individual disputes.
 

By combining expertise in both labor law and criminal law, Decent Law Firm provides strategies focused on achieving practical and meaningful results.
 

Now that criminal penalties have already been significantly strengthened, the decisions made at this stage may ultimately determine whether criminal punishment is imposed.
 

If you are currently facing concerns regarding this issue, establishing the right direction now may substantially change the outcome of the case.
 

This is not the time to allow the problem to escalate. It is the time to strategically control and minimize legal risk.