Unpaid wages hit 638.7 billion won in first four months as Homeplus crisis raises fresh alarm

Unpaid wages in South Korea totaled 638.7 billion won (about $414 million) in the first four months of this year, with 74 percent of the total concentrated at small workplaces employing fewer than 30 workers, government data showed Monday. Manufacturing and construction continued to account for the largest shares, and the number of affected workers exceeded 75,000.

The pace of wage arrears slowed in the first quarter for the first time in three years, and the January–April total fell from a year earlier. However, concerns are mounting that the figures could worsen once the full impact of Homeplus's court receivership — including delayed wage payments and ongoing restructuring — is reflected in future statistics.

According to the Ministry of Employment and Labor's "January–April 2026 Wage Arrears Report" released Monday, unpaid wages reached 638.7 billion won and the number of affected workers stood at 75,105 through April. The amount recovered on behalf of workers came to 588.9 billion won. The wage arrears rate was 0.21 percent, and the arrears worker rate stood at 36.7 per 10,000 employees.

The ministry revised its statistical methodology this year to reduce double-counting of arrears figures, making direct comparisons with last year difficult. Even so, the January–April total was lower than the 652.9 billion won recorded in the same period last year.

By industry, manufacturing posted the highest arrears at 196.6 billion won, accounting for 30.8 percent of the total. Construction followed at 117.6 billion won, then wholesale, retail, food and accommodation at 97.3 billion won, business services at 78.2 billion won, and transport, warehousing and communications at 64.9 billion won. By payment type, unpaid wages accounted for 312.4 billion won, severance pay for 286.6 billion won, and other payments for 39.7 billion won.

By workplace size, establishments with five to 29 employees recorded the highest arrears at 257.4 billion won, followed by those with fewer than five employees at 215.7 billion won. Combined, workplaces with fewer than 30 employees accounted for 473.1 billion won — 74.1 percent of the total. By contrast, workplaces with 30 to 99 employees recorded 99.9 billion won, those with 100 to 299 employees 52.4 billion won, and those with 300 or more employees just 12.7 billion won.

By region, Gyeonggi Province recorded the highest arrears at 187.2 billion won, followed by Seoul at 129.2 billion won, South Gyeongsang Province at 41.1 billion won, Busan at 39.1 billion won, Gwangju at 33.4 billion won, and Incheon at 29.8 billion won. Sejong posted the lowest figure nationwide at 3.5 billion won. Unpaid wages owed to foreign workers totaled 50.3 billion won, representing 7.9 percent of the overall total.

Analysts warn, however, that the recent easing trend in wage arrears could reverse. Homeplus, which is undergoing court receivership, is at the center of those concerns: if the company paid only 25 percent of April wages — as the union claims — and has yet to pay May wages at all, a significant sum could appear in future arrears statistics.

According to the Mart Industry Union under the Korean Confederation of Trade Unions, Homeplus's workforce shrank from 17,986 at the end of last year to 15,398 at the end of April, a drop of 2,588. The planned closure of 37 stores nationwide raises the prospect of an additional 3,500 job losses. The union says a vicious cycle has taken hold — cash shortages are disrupting product deliveries, leaving store shelves bare — and is calling on the government to act on employment and wage protections.

Labor groups say the Homeplus case illustrates how large-scale restructuring and wage payment failures could reverse the recent downward trend in arrears. The Ministry of Employment and Labor said it will continue pursuing measures to eradicate wage theft, including credit sanctions, travel bans and public disclosure of the names of employers who repeatedly withhold large sums.