Homeplus Faces Growing Unpaid Wage Crisis
Homeplus, a major retail company in South Korea, is currently facing severe financial difficulties after the recent abolition of corporate rehabilitation procedures. This has led to significant concerns about the company’s ability to meet its financial obligations, particularly regarding unpaid wages. According to recent reports, the accumulated unpaid wages at Homeplus have exceeded 140 billion Korean won this year.
The Ministry of Labor has been actively involved in addressing the issue, guiding the settlement of unpaid wages while continuing its investigation into the June unpaid wage case. The situation has raised alarms among workers and labor rights advocates, as delays in payments could have far-reaching consequences for employees.
Detailed Breakdown of Unpaid Wages
Data obtained by the office of People Power Party Representative Kim Wi-sang from the Ministry of Labor on July 7 revealed that Homeplus has had unpaid wages in the hundreds of billions of won since March this year. A full investigation by the Ministry confirmed that the total unpaid wages from March to June amounted to 141 billion Korean won. While the unpaid wages from March to May have been settled, there remains a balance of 33.3 billion Korean won for June.
Breaking it down by month:
- March: Unpaid wages of 22.9 billion Korean won for 15,842 people were recorded. These were paid on April 17, approximately a month later.
- April: Unpaid wages of 44.2 billion Korean won for 15,313 people were reported. The Ministry of Labor issued corrective instructions due to the delay, and the unpaid wages were eventually paid in two installments on May 21 and June 23.
- May: Unpaid wages of 40.6 billion Korean won for 14,558 people were confirmed. These were paid on June 23.
- June: Unpaid wages of 33.3 billion Korean won for 11,337 people have been confirmed.
This pattern of delayed payments has become a recurring issue, with wages often being paid only the following month.
Impact on Severance Pay and Retirement Benefits
With the recent decision to abolish Homeplus’s corporate rehabilitation procedures, concerns are growing about potential delays in severance pay and retirement benefits. Homeplus recently announced internally that due to financial shortages, the payment of these benefits has been unavoidably delayed. The company stated that they plan to pay them as soon as funds are secured.
Severance pay must be paid within 14 days of an employee’s retirement, leading to fears that the scale of unpaid wages could grow starting this week. This situation highlights the urgent need for intervention to protect the rights of affected workers.
Government Response and Future Measures
The Ministry of Labor has pledged to monitor the status of unpaid wages in the future and initiate investigations immediately if additional unpaid wages occur. They also intend to ensure that unpaid wages are protected as public interest claims and provide affected workers with access to livelihood loans and advance payments.
Representative Kim Wi-sang emphasized the importance of wages as a fundamental right for workers, stating that the government has an obligation to minimize and resolve unpaid wages. He added that preemptive relief measures must be initiated swiftly to prevent further harm to employees and partners.
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