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BlogsUnemployment Benefit Fraud: What You Must Read If You’re Facing Potential Penalties
1. What Is Unemployment Benefit Fraud? The unemployment benefit system is a social security program designed to help workers maintain a minimum standard of living while preparing for reemployment after leaving a job. However, eligibility is restricted if a worker is dismissed for serious misconduct or voluntarily leaves employment without a justifiable reason. The system operates on the premise that eligible recipients receive official “recognition of unemployment” from the head of an employment security office and make sincere efforts to find new employment. Accordingly, the very foundation of the system is considered undermined in the following situations: Failing to report work activity or income despite having earned income Repeating only superficial or formal job-search activities In practice, the key issue in unemployment benefit fraud cases is not whether the recipient claims it was a simple mistake, but how the facts are evaluated. Under Article 47 of the Employment Insurance Act, recipients are required to report any employment during the unemployment recognition period. Concealing employment, failing to report income, or similar conduct is repeatedly deemed as receiving benefits through false or fraudulent means. It has become increasingly difficult to overturn a fraud determination merely by arguing that there was no intent. Administrative authorities and courts comprehensively assess not only the individual’s subjective intent, but also objective conduct, the actual nature of work and income, and the circumstances surrounding the failure to fulfill reporting obligations. 2. Common Types of Cases That Lead to Problems The most frequently identified cases in practice include: Failing to report income from part-time work or freelance activities Working at a business registered under a family member’s or acquaintance’s name Assuming that short-term or irregular income does not need to be reported Falsely processing a resignation by agreement with the employer while continuing to receive wages Although some of these practices are treated as “customary” in certain circles, they clearly constitute unlawful conduct and are legally classified as fraud. During investigations, authorities examine factors such as the form of work, whether compensation was provided, and the continuity of the activity. As a result, many of these cases ultimately lead to penalties for unemployment benefit fraud. 3. What Happens If You Are Caught? Once an issue is identified, an investigation by the employment center typically begins. You will then be asked to provide an explanation, and if fraud is confirmed, not only will the full amount of benefits received be recovered, but additional penalties may also be imposed. Depending on the case, an additional surcharge of up to twice the fraudulently received amount may be imposed (up to five times if there was collusion with the employer). In cases where benefits were obtained through false or fraudulent means, criminal liability may also arise (Article 62(2) of the Employment Insurance Act). In particular, if the employer was involved in the scheme, penalties can include up to five years’ imprisonment or a fine of up to KRW 50 million (Article 116(1)(2) and (2)(2) of the Employment Insurance Act). The critical point is that this issue may not end as a mere administrative matter. Depending on how the facts are assessed, it can escalate into criminal proceedings. Unemployment benefit fraud penalties should never be taken lightly. The assumption that “this probably won’t be a problem” is often the most dangerous decision. 4. If You Have Been Contacted for an Investigation — and How Decent Law Firm Can Help If you proceed with statements before properly organizing the facts, you may place yourself at a significant disadvantage. However, if a recipient voluntarily reports the issue before an investigation begins, additional penalties may be waived under Article 105(4) of the Enforcement Rules of the Employment Insurance Act. Moreover, the consistency and sincerity of your explanation can significantly affect the level of sanctions imposed. For those lying awake at night worrying about this issue, it is important to understand that the decisions you make and the way you respond at this very moment can shape the direction of your future. Conversely, ignoring the issue or responding carelessly can lead to irreversible consequences, such as restrictions on future unemployment benefits or a criminal record. Decent Law Firm has advised clients on unemployment benefit fraud matters where intent is ambiguous, where the existence of employment or income is disputed, and where the possibility of criminal proceedings has already been raised, helping them develop response strategies from the earliest stage. In this area, early judgment and response determine the outcome. Rather than trying to handle this alone, it is crucial to recognize that this is the point at which proper legal review and guidance are necessary.
2025-12-30 Naver Blog -
Blogs
Major Industrial Accident Liability: Legal Risks Companies Must Rigorously Assess
What Is a Serious Industrial Accident? A “serious industrial accident” is premised on an industrial accident as defined under Article 2(1) of the Occupational Safety and Health Act. Accordingly, an incident that does not qualify as an industrial accident under that Act cannot be recognized as a serious industrial accident under the Serious Accidents Punishment Act. The Serious Accidents Punishment Act applies only when specific statutory requirements are met. The representative criteria are as follows: One or more fatalities; Two or more persons injured in the same accident who require medical treatment for at least six months; or Three or more persons diagnosed within one year with occupational diseases prescribed by Presidential Decree, such as acute poisoning caused by the same hazardous factor. An important point to note is that the victims are not required to be “employees” in the strict sense. The Act covers all “workers” who provide labor, regardless of the contractual form, including subcontracting, outsourcing, or consignment arrangements. In practice, accidents that frequently give rise to issues include falls, crushing or entrapment accidents, collapses, and overturning incidents. Even if an accident appears to be a simple safety incident on its face, it may still be classified as a serious industrial accident if the statutory requirements are satisfied. While not every accident constitutes a serious industrial accident, the assumption that “this level of accident will be fine” can itself lead to significant legal risk. Key Risk Areas for Companies and Executive Management One of the most common misconceptions in serious industrial accident cases is the belief that liability ends at the level of on-site managers. In reality, investigations and trials focus on whether the business owner or executive management fulfilled their obligations to ensure safety and health under Articles 4 or 5 of the Serious Accidents Punishment Act. A particularly critical issue is the effectiveness of the safety management system. Even where safety manuals and internal regulations formally exist, failure to ensure that they function in practice can be evaluated as an adverse factor. If a safety and health management system exists only on paper, or if training and inspections are conducted in a merely formal or perfunctory manner, this may be deemed a failure to fulfill the statutory duty to secure safety and health under Article 4. In such cases, the existence of documentation alone can actually serve as unfavorable evidence demonstrating non-compliance. Where a business owner or executive management violates Articles 4 or 5 and causes a serious industrial accident resulting in one or more deaths, they may be subject to imprisonment for at least one year or a fine of up to KRW 1 billion, or both. In addition, the corporation or institution itself may be fined up to KRW 5 billion (Articles 6 and 7 of the Serious Accidents Punishment Act). Mandatory Actions Immediately After an Accident Occurs In serious industrial accident cases, the company’s response in the immediate aftermath often determines the outcome. Key considerations include: Organizing internal reporting and statement procedures; Separating internal investigations from external criminal investigations; Managing employee statements appropriately; Exercising caution when responding to the media, the Ministry of Employment and Labor, and the police. When a serious industrial accident occurs, the business owner must immediately suspend the relevant work, evacuate workers from the site, and take all necessary measures to ensure safety and health. In addition, the occurrence of the accident must be reported without delay to the Minister of Employment and Labor. Whether these initial measures were appropriate is a key factor in determining, during subsequent investigations and trials, whether executive management fulfilled their duty to secure safety and health. In practice, decisions made during the first few hours often shape the entire course of the investigation. It is essential to recognize that well-intentioned but ill-considered actions can, in some cases, increase legal liability rather than mitigate it. Decent Law Firm’s Support – Post-Incident Response and Preventive Measures Decent Law Firm does not limit its role in serious industrial accident cases to post-incident criminal defense. Our support includes: Criminal investigation 대응 and defense against criminal liability; Review and diagnosis of safety management systems and legal risk exposure; Development, revision, and verification of implementation of manuals, training programs, and internal regulations; Advisory services aimed at preventing the recurrence of similar accidents. The core of serious industrial accident 대응 lies not in one-time defensive measures, but in building a structure that can prevent recurrence. Even after an incident, Decent focuses on establishing sustainable compliance frameworks that meaningfully reduce the company’s long-term legal and operational burden. Before it is too late, we encourage you to seek assistance from experienced professionals.
2025-12-25 Naver Blog -
Blogs
Recovery Strategies Every Blockchain Scam Victim Must Know
Why Blockchain Scams Cause Such Severe Damage Unlike conventional financial fraud, blockchain scams are rooted in the abuse of technological characteristics. Due to the inherent nature of blockchain technology, once a virtual asset transaction is completed, it is technically irreversible. This non-reversible structure makes post-incident recovery extremely difficult. When overseas exchanges or foreign wallets are involved, jurisdictional issues further complicate the situation, significantly raising the difficulty of any legal or practical response. A major problem is that many victims mistakenly perceive these cases as mere investment losses. Technical jargon such as whitepapers, smart contracts, and algorithms is often used to disguise intentional deception, causing victims to miss the critical window for effective action. In practice, early response timing plays a decisive role in determining whether meaningful recovery is possible in blockchain fraud cases. For those already experiencing anxiety and fear due to such losses, we hope this guide helps provide some clarity and direction. Common Types of Blockchain Scams (From the Victim’s Perspective) In practice, blockchain scams tend to follow recurring patterns: Fraud disguised as coin investments or private sales Schemes posing as crypto loans, staking programs, or yield products Fake exchanges, wallets, or phishing sites designed to steal login credentials or assets Signal groups, automated trading services, or guaranteed-profit schemes The critical issue is distinguishing between ordinary investment risk and losses caused by deceptive conduct. This distinction directly affects whether criminal fraud charges may be established and whether civil liability for damages can be pursued. If this assessment is incorrect, the entire response strategy may be fundamentally misguided. Immediate Actions to Take Once You Recognize the Fraud If fraud is suspected, the first step is to immediately stop any further transactions, change passwords for all related accounts, and prevent secondary damage. At the same time, evidence preservation is the highest priority. You must securely retain and back up original materials, including transaction hashes, wallet addresses, screenshots and original files of Telegram, KakaoTalk, or email communications, website URLs and whitepapers provided by the counterparty, contracts, and transfer records. Failure at this stage can create decisive limitations in both criminal and civil proceedings later on. You may request withdrawal freezes from virtual asset service providers (exchanges), ask investigative authorities to suspend payments related to fraudulent accounts, and consider filing a report under the Act on the Prevention of Telecommunications-Based Financial Fraud and Refund of Damage Proceeds. The earlier the response, the greater the possibility of practical measures being taken. Waiting passively only reduces the available options—active intervention is essential. How Decent Law Firm Makes a Practical Difference Blockchain scam cases cannot be resolved simply by filing a criminal complaint. They require a coordinated strategy that integrates structural analysis of the scam, clear legal issue identification, and parallel criminal and civil actions. Decent Law Firm conducts in-depth reviews of transaction flows and technical structures to precisely assess whether fraud is legally established, and prepares structured criminal complaints and legal memoranda for submission to investigative authorities. We also develop realistic, case-specific strategies involving exchanges, overseas platforms, and potential civil recovery depending on the feasibility of identifying the perpetrators. Ultimately, blockchain scams are not merely technical issues—they are problems of legal structure and accountability. If damage has already occurred, it is crucial not to proceed alone. Early, accurate legal intervention is the most effective way to define the proper course of action. In blockchain fraud cases, speed and precision make a tangible difference. We strongly encourage you to prepare and act without further delay.
2025-12-25 Naver Blog -
Media Coverage
South Korea Finalizes Framework for AI Basic Act: Legislative Notice for Enforcement Decree Concludes
The public notice period for the Enforcement Decree of the “Framework Act on the Advancement of Artificial Intelligence and Establishment of Trust” (commonly referred to as the 'AI Basic Act'), which establishes the institutional standards for the AI industry, concluded on December 22, 2025. With the Act set to take effect on January 22, 2026, the South Korean government is finalizing detailed regulations, prompting both domestic and international AI service providers to accelerate their compliance efforts. The Ministry of Science and ICT (MSIT) released the draft Enforcement Decree on November 12. Compared to the initial draft unveiled in September, the final version provides more specific methods for fulfilling obligations and includes adjustments to minimize overlapping regulations with existing laws, such as the Personal Information Protection Act (PIPA). Industry experts evaluate that this decree has evolved beyond mere recommendations to become an essential standard that must be integrated from the initial planning and design stages of AI services. Mandatory Labeling for Generative AI A cornerstone of the Enforcement Decree is the mandatory labeling of generative AI outputs. Under Article 31 of the AI Basic Act, AI providers must notify users that content has been generated by artificial intelligence in a manner that is easily recognizable. The decree categorizes labeling methods into "Human-Perceptible" and "Machine-Readable" formats. Machine-readable formats include technical measures such as C2PA or metadata embedding. Even when opting for machine-readable methods, providers are required to inform users at least once via text or audio prompts that the content is AI-generated. However, to reduce the administrative burden on businesses, the decree waives redundant labeling if the content (such as deepfakes likely to be confused with reality) has already been labeled or disclosed in accordance with other relevant statutes. Regulations on "High-Impact AI" The decree also clarifies the regulation of "High-Impact AI," defined as systems that may significantly affect human life, physical safety, or fundamental rights. It establishes a procedure where providers can apply to the MSIT to confirm whether their service falls under the High-Impact category, with the government required to respond within 60 days. Industry insiders view this confirmation process as a critical benchmark, as the classification of a service as High-Impact AI significantly increases the required level of risk management and documentation. Integration with Existing Laws and Operational Accountability A notable point for businesses is the coordination with other legal frameworks. The decree specifies that if a provider faithfully fulfills its obligations under the Personal Information Protection Act (PIPA), it is deemed to have satisfied the safety and reliability requirements of the AI Basic Act within the scope of personal data processing. While this is expected to ease the burden of double regulation, it does not exempt providers from duties regarding algorithm risk management or accountability for AI outputs outside the realm of personal data. Furthermore, the decree governs the overall operational systems of AI providers. Businesses must retain documents regarding risk management, explanation protocols, and user protection measures for five years. For overseas providers, the obligation to appoint a domestic agent to protect Korean users has been formalized. Safety Requirements for High-Compute AI Models For large-scale AI models with cumulative training computation exceeding 10²⁶ FLOPs, the establishment of risk identification and management systems is now mandatory. While few commercial models currently meet this threshold, discussions regarding the scope of application are expected to continue as hyper-scale AI development accelerates. A key remaining issue is the extent of liability for companies that do not develop their own models but provide generative or high-impact services using global models via APIs. The Path Forward: "Compliance by Design" Although the government plans to implement a grace period of approximately one year after the law takes effect, industry tension remains high. Modifying the UX or system architecture of an AI service after launch incurs significant time and cost. Jin Hyeonsu, Managing Partner at DECENT Law Firm, commented, "From the conclusion of this public notice period, it is essential for businesses to diagnose whether their services fall under the High-Impact or Generative AI categories. The core of preparation before the 2026 enforcement will be determining how to reflect labeling obligations on service screens and establishing a systematic framework for document management." As the 2026 enforcement of the AI Basic Act approaches, the domestic AI industry faces the dual challenge of technological competition and trust management. Whether these institutional standards act as a barrier to innovation or a foundation for market stability will depend on how effectively enterprises respond.
2025-12-24 스타트업엔(StartupN) -
Blogs
Korea’s AI Basic Act: Key Compliance Checkpoints for AI Businesses
The public notice period for the Enforcement Decree of the “Framework Act on the Advancement of Artificial Intelligence and Establishment of Trust” (hereinafter the 'AI Basic Act') concluded on December 22, 2025. With the Act set to take effect on January 22, 2026, the South Korean government has finalized the institutional framework. For AI service providers, these regulations are not merely post-launch checklists but essential specifications that must be integrated from the initial planning and design stages. 1. Labeling Obligations for Generative AI and UX Integration Transparency requirements under Article 31 of the AI Basic Act have been further refined through the Enforcement Decree. Labeling Methods: Providers must choose between a "Human-Perceptible Format" (visible text/watermarks) and a "Machine-Readable Format" (C2PA, metadata, etc.) to identify AI-generated content. Mandatory Notification: Even when adopting machine-readable formats, providers are obligated to notify users at least once via text or audio prompts. Avoidance of Double Regulation: If content (e.g., deepfakes) has already been labeled in accordance with other relevant laws, it may be exempt from redundant labeling duties under this Act. Practical Impact: This is not a simple notification task; it directly impacts UX/UI design. Legal reviews should be conducted during the design phase to avoid the prohibitive costs of post-launch modifications. 2. High-Impact AI Confirmation and Launch Risk Management The Act defines "High-Impact AI" as systems that significantly affect human life, physical safety, or fundamental rights (e.g., healthcare, transportation, recruitment, credit scoring, etc.). Confirmation Procedure: Businesses can apply to the Ministry of Science and ICT (MSIT) to confirm whether their service qualifies as "High-Impact AI." The government must respond within 60 days (30 days + a possible 30-day extension). Business Risk: The government's response timeline is a critical variable for service launch schedules. If a service is retroactively classified as High-Impact AI, the provider may face the risk of redesigning the entire system architecture to meet enhanced safety standards. 3. Integration with the Personal Information Protection Act (PIPA) The Enforcement Decree reflects efforts to resolve overlapping regulations with the existing PIPA. Deemed Compliance: If a business faithfully fulfills its obligations under PIPA, it is deemed to have satisfied the safety and reliability requirements of the AI Basic Act regarding the processing of personal information. Limitations: Note that this "deemed compliance" applies only to personal data processing. Obligations regarding algorithm transparency and accountability for AI outputs must still be addressed separately under the AI Basic Act. 4. Post-Management Accountability: 5-Year Data Retention & Domestic Agents The Decree formalizes accountability measures to verify regulatory compliance. Record-Keeping: Documents including risk management plans, explanation protocols, and user protection measures must be retained for 5 years. These serve as crucial evidence during disputes or regulatory investigations. Domestic Agent Appointment: Overseas AI providers are now explicitly required to appoint a domestic agent in Korea. Domestic companies utilizing APIs from global Big Tech firms must also conduct supply-chain compliance checks. 5. Safety Obligations for Large-Scale AI Models (High-Compute AI) The Decree imposes obligations to establish risk identification and management systems for developers of large-scale AI models with cumulative training computation exceeding $10^{26}$ FLOPs. Domestic businesses providing services based on these hyper-scale models must also review the legal structure of liability and risk-sharing. Conclusion: A 1-Year Grace Period, but the Time to Prepare is Now The government intends to provide a one-year grace period following the enforcement of the Act. However, given the nature of the AI industry, reactive adjustments can lead to immense technical costs and legal exposure. Enterprises must now view "Compliance by Design" as a core element of their service, moving beyond mere technological development. We recommend a thorough diagnostic of whether your services fall under the "High-Impact" or "Generative AI" categories to ensure full readiness by the enforcement date. DECENT Law Firm provides tailored legal counsel and solutions to navigate the evolving regulatory landscape of the AI industry. If you require a detailed review or a compliance audit, please contact us.
2025-12-24 Naver Blog -
Blogs
Key Issues Companies Must Understand Regarding Wage Peak Systems
Concept and Legal Nature of the Wage Peak System A wage peak system is a scheme under which an employee’s wages are gradually reduced after reaching a certain age, in exchange for maintaining or extending employment until the mandatory retirement age. Against the backdrop of an aging workforce and policies favoring longer employment, many companies adopt wage peak systems as a means to mitigate rising labor costs. However, this system is not merely an internal HR policy. Because it entails a fundamental change to core working conditions, operating a wage peak system without proper legal review can expose a company to significant dispute risks. Not all wage reductions are justified simply by labeling them as a “wage peak system.” Whether such a system is lawful depends on how it is designed and implemented in practice. Companies are therefore advised to carefully review the points below before proceeding. Key Legal Issues in Practice In practice, the problematic issues are quite clear: Whether wage reductions based on age constitute “unreasonable discrimination” prohibited under the Act on Prohibition of Age Discrimination in Employment and Promotion of Employment of Older Persons Whether the scale of wage reduction and the period of application are excessive Whether corresponding measures—such as reductions in workload, responsibilities, or changes in job duties—have actually been implemented to offset the wage reduction Many companies focus solely on adjusting wages, while treating accompanying measures such as workload reduction, job reassignment, or reduced working hours as a mere formality—or failing to implement them altogether. In such cases, the wage peak system can become the starting point of serious disputes, regardless of its stated purpose. These issues often extend beyond labor disputes and escalate into civil claims for unpaid wage differentials, making them far from trivial. Summary of Supreme Court Standards In determining the validity of a wage peak system, the Supreme Court comprehensively considers the following factors (Supreme Court Decision dated May 26, 2022, Case No. 2017Da292343): The legitimacy of the purpose for introducing the wage peak system The extent of disadvantage suffered by the affected employees Whether measures corresponding to the wage reduction were introduced, and whether such measures are appropriate Whether the financial resources saved through the wage peak system were used for its original intended purpose If any one of these elements is lacking, the wage peak system may be deemed invalid as age-based discrimination. In practice, there have been numerous cases where companies were required to retroactively pay substantial amounts of unpaid wages despite having implemented such systems. In particular, Korean courts distinguish between “retirement-extension-type” and “retirement-maintenance-type” wage peak systems. Where wages are reduced without extending the retirement age (the retirement-maintenance type), the likelihood of invalidation is significantly higher unless a clear and reasonable justification exists. Such systems therefore require especially careful design. Ultimately, a wage peak system that merely satisfies formal requirements can result in serious financial and legal liabilities for the company. Practical Checkpoints for Companies and Decent Law Firm’s Support When operating a wage peak system, companies should comprehensively review the following points: Whether amendments to the rules of employment were properly approved in accordance with Article 94(1) of the Labor Standards Act, including obtaining consent from a labor union representing a majority of employees Whether individual consent from affected employees is required Whether substantive and practical measures corresponding to wage reductions have been established and are actually being implemented Even if a wage peak system is already in place, it is necessary to reassess whether the current operation complies with judicial standards. Responding after a dispute has arisen inevitably involves higher costs and risks. Accordingly, conducting legal review at the system design stage or during operational audits is the most practical way to protect the company. Decent Law Firm provides practical legal support tailored to each company’s organizational structure and HR framework, drawing on extensive advisory and dispute resolution experience with wage peak systems, led by attorneys with prior labor law and HR expertise. If your company is already involved in this issue or requires proactive risk management, we strongly recommend seeking legal advice—even on a preliminary basis.
2025-12-23 Naver Blog
