WAGE CLAIM GUARANTEE ACT [See entire ACT]

CHAPTER Ⅲ Wage Claim Guarantee Fund

Article 17 (Establishment of Fund)

In order to finance a substitute payment under Article 7 or 7-2, the Minister of Employment and Labor shall establish the Wage Claim Guarantee Fund (hereinafter referred to as the "Fund").
[This Article Wholly Amended on Dec. 27, 2007]
[Moved from Article 15; previous Article 17 moved to Article 20 ]

Article 18 (Creation of Fund)

(1) The Fund shall be created with the following financial resources:

1. Payments made by employers under Article 8;

2. Charges paid by employers under Article 9;

3. Borrowings under paragraph (2);

4. Revenues from the operation of the Fund;

5. Other revenues.

(2) The Minister of Employment and Labor may, if necessary for the operation of the Fund, borrow from financial institutions or other funds at the cost of the Fund.

[This Article Wholly Amended by Act No. 8816, Dec. 27, 2007]

Article 19 (Purposes of Fund)

The Fund shall use its funds for the following purposes:
1. To make substitute payments upon Article 7 or 7-2 and return amounts erroneously paid or others;
2. To subsidize expenses incurred in relation to assistance from a certified labor consultant under Article 7 (6);
3. To provide employers and employees with loans necessary to pay overdue wages, etc. and living expenses, respectively, under Article 7-3;

4. To make contributions to persons entrusted with affairs under Article 27;
5. To repay borrowings and interest accrued thereon;
6. To conduct research on wage claim guarantee systems, such as the prevention of arrears of wages, etc. and support for their settlement;
7. To make contributions to the Korea Legal Aid Corporation under the Legal Aid Act: Provided, That such contributions shall be limited to support for legal aid services for employees with overdue wages, etc.;
8. To carry out projects for wage claim guarantee, and manage and operate the Fund.
[This Article Wholly Amended on Feb. 1, 2012]

Article 19-2

[Previous Article 19-2 moved to Article 23 ]

Article 20 (Management and Operation of Fund)

(1) The Fund shall be managed and operated by the Minister of Employment and Labor.
(2) With regard to the management and operation of the Fund, paragraphs (2) through (4) of Article 97, Articles 98 through 100 and 102 of the Industrial Accident Compensation Insurance Act shall apply mutatis mutandis. In such cases, "insurance benefits" in the same Act shall be read as "substitute payment", and "premium income" as "income from charges".
[This Article Wholly Amended on Dec. 27, 2007]
[Moved from Article 17; previous Article 20 moved to Article 24 ]

Enforcement Ordinance

Article 22 (Management and Operation of the Fund)

The provisions of Article 86 (1) 2, the former part of Article 86 (2), Articles 87 through 89, and Articles 91 through 95 of the Enforcement Decree of the Industrial Accident Compensation Insurance Act shall apply mutatis mutandis with regard to the management and operation of the Fund and return of contributions. In this case, "Contributor" shall be read as "a person entrusted with work pursuant to Article 27 of the Act", "Insurance year" as "fiscal year",“Industrial accident compensation insurance and prevention fund account in the Enforcement Decree of the same Act as “wage claim guarantee fund account”, “the Corporation”(except for Article 88 (2) and Article 91 (2) of the Enforcement Decree of the same Act) as “the Minister of Employment and Labor” (referring to the Korea Workers’ Compensation & Welfare Service in case the authority is delegated to it pursuant to Article 24), “premiums” as “charges”, “fund" as “wage claim guarantee fund.”
<This Article Wholly Amended by Presidential Decree No. 22490, Nov. 15, 2010>

Enforcement Ordinance

Article 22-2 (Criteria for Accumulation of Legal Liability Reserve)

The amount of legal liability reserve under Article 99 of the Industrial Accident Compensation Insurance Act to which the provisions of Article 20 (2) of the Act shall apply mutatis mutandis shall be an amount spent to make subrogated payment in the previous year.
<This Article Wholly Amended by Presidential Decree No. 22490, Nov. 15, 2010>

Article 21 (Fiscal Year)

The fiscal year of the Fund shall conform to that of the Government.

[This Article Wholly Amended by Act No. 8816, Dec. 27, 2007]

For further questions, please
call (+82) 2-539-0098 or email bongsoo@k-labor.com

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