Kim Young-hoon vows tougher wage theft penalties, new pay system for construction and shipbuilding

The government will raise the maximum statutory penalty for wage theft to five years starting in October and introduce a "wage-segregated payment" system in the construction and shipbuilding industries, where the problem is most acute.

The measure is designed to cut off so-called "intermediate exploitation" — a structural problem in which wages owed to workers are siphoned off during the subcontracting process before they reach employees. Companies that have recorded repeated serious industrial accidents of the same type over the past decade will also be placed under intensive supervision and inspection.

Minister of Employment and Labor Kim Young-hoon outlined the plans Wednesday while presenting the ministry's key second-half priorities to the National Assembly's Climate, Energy, Environment and Labor Committee.

Kim identified three core directions for second-half labor policy: workplaces where workers are safe and fairly compensated; guaranteed employment opportunities for all; and what he called an "industry-wide transformation with labor" — a vision of companies, workers, industries and labor advancing together.

"Similar accidents keep recurring on industrial sites, and violations of basic labor standards — including wage theft — continue, particularly at small workplaces," Kim said. "We have made it our top policy priority to protect people's lives and uphold workplace fundamentals, so that no one dies or suffers injustice at the job they go to in order to make a living."

The ministry's first priority is strengthening penalties for wage theft. Starting in October, the maximum statutory sentence will be raised to five years. The government also plans to introduce a wage-segregated payment system in the construction and shipbuilding sectors to eliminate the intermediate exploitation that arises from subcontracting arrangements.

To reduce blind spots in labor oversight, the ministry will expand cooperation with local governments, beginning with Gyeonggi Province and extending to 16 regional governments in total. It will also push to establish a new "Labor Inspection Investigation Training Institute" to sharpen the investigative capabilities of labor inspectors, who hold special judicial police authority.

On industrial accident prevention, the ministry will concentrate management resources on workplaces with recurring incidents. Companies that have experienced the same type of serious accident repeatedly over the past decade will be subject to intensive supervision and inspection.

The ministry will also step up its response to heat-related and asphyxiation hazards. A special task force will be activated to prevent heat and asphyxiation accidents during summer, with proactive measures including work stoppages triggered by heat-level thresholds. Regulatory reforms will also be pursued to ensure that workers' rights — to avoid danger and to participate in safety and health prevention activities — are genuinely protected on the ground.

"There should be no workplace where the same type of serious accident happens again and again," Kim said. "Being fairly compensated for the work you do is the most fundamental principle of labor."

The ministry will also expand tailored employment programs to address sluggish youth hiring. Its assessment is that the spread of AI and other technologies is narrowing the door to new recruitment and reducing opportunities for young people to build careers.

The government plans to expand private-sector employment and entrepreneurship by linking support to government business-assistance programs in emerging industries as well as the public sector. Incentives to encourage young people to take jobs at regional small and medium-sized enterprises and stay long-term will also be strengthened.

A "K-New Deal Academy" led by large companies, along with expanded public and private work-experience programs, will help young people build job skills. For young people preparing to enter the workforce, a tentatively named "Playground" program will provide continuous support from the end of education and training through to actual employment.

For middle-aged workers, the ministry will gradually expand the mandatory reemployment support obligation to workplaces with 300 or more employees. The number of career development centers for middle-aged workers will be increased to 12, offering one-on-one personalized career planning to support career transitions and reemployment.

To allow younger and older generations to coexist in the workforce, the ministry will also pursue a retirement age extension through social dialogue, under a model designed to benefit both generations.

All 102 employment centers nationwide will be reorganized into "My AI Employment Centers." The ministry envisions a "lifelong AI job total-care" system — from graduation to retirement — providing tailored support for young people entering the workforce for the first time through to career transitions and reemployment for middle-aged workers.

The ministry will also overhaul labor market regulations to reduce coverage gaps as industrial structures shift. It plans to establish a tentatively named "K-Labor Welfare Council" as a one-stop support hub for special-type workers, platform workers and other labor providers.

The social insurance system will be converted to an income-based model to reduce coverage gaps, and the ministry will support the passage this year of a "Basic Act on the Rights of Working People" and a "Worker Presumption System." Improvements to the treatment of non-regular workers and contracting arrangements in the public sector, expansion of jobs for people with disabilities, and the establishment of an integrated support and rights-protection framework for migrant workers are also on the agenda.

The gradual extension of the Labor Standards Act to workplaces with fewer than five employees will be pursued in stages through social dialogue. A roadmap to realize the principle of equal pay for equal work will be drawn up by year's end, and efforts will be made to reduce actual working hours and improve the retirement pension system — both items agreed upon jointly by labor, management and government.

In response to the AI transformation, the ministry will implement its basic plan for employment stability during industrial transition and push forward "AI for All" — an initiative to expand basic vocational training so that everyone can develop AI capabilities.

The ministry will also draw up "AI Ethics Guidelines for the Labor Sector" to ensure that AI in the workplace expands human potential rather than excludes people. The vision is to use dialogue among labor, management and government — alongside public deliberation — to discuss a new social contract covering employment, vocational training, social safety nets, and the sharing of technological innovation and its gains.

"Making good policy is important, but equally important is ensuring that policy works on the ground at the right time," Kim said. "The Ministry of Employment and Labor will lead the effort to realize growth that serves people, labor that preserves dignity, and a future where no one is left behind."