A service that takes six months of unpaid wages through to an application

Protection now covers six months

Insolvency Substitute Payment (도산대지급금) is a Korean scheme under which the state pays a set amount in advance when an employer has become insolvent and cannot pay wages. Retired workers who meet the payment requirements after August 20, 2026 can now have up to their final six months of unpaid wages protected, rather than only their final three months.

The key date is not when wages first became overdue. What matters is whether the court’s bankruptcy declaration or decision to begin rehabilitation proceedings—or the date on which the Ministry of Employment and Labor, Korea (고용노동부), the government ministry responsible for employment and labour policy, recognises that the employer lacks the ability to pay—falls on or after August 20, 2026.

Protection for retirement benefits remains at the final three years. The maximum Insolvency Substitute Payment, after age-based caps are applied, rose from KRW 21 million to KRW 31.5 million. That does not mean every applicant receives the maximum.

In an example given by the Ministry of Employment and Labor, a 35-year-old worker earning KRW 3.5 million a month went unpaid for five months, or KRW 17.5 million. Under the previous rules, the payment would have been KRW 9.3 million. Under the new rules, up to KRW 15.5 million may be possible—a difference of KRW 6.2 million, close to two months’ pay.

A claim must be filed within two years of the date the reason for insolvency was recognised. Applicants submit a confirmation application and a payment claim to the local employment and labour office with jurisdiction. Government24 (정부24), Korea’s government services portal, lists online, in-person, fax, and postal applications, with a total processing period of 14 days.

Loans that employers use to clear overdue wages also expanded on August 20, 2026: to KRW 200 million per employer under the general standard and KRW 20 million per worker. After having the unpaid amount confirmed by a labour office, the employer applies to the Korea Workers’ Compensation & Welfare Service (근로복지공단), a public agency that administers worker welfare programmes. The funds are paid directly to workers’ accounts, not into the employer’s operating account.

Moving the evidence is harder than finding the money

To make the service opportunity concrete, assume Worker A is 35 and worked at a metal-processing business with 12 employees. A earned KRW 3.5 million a month, resigned after going unpaid for five months, and the company received a bankruptcy declaration on August 25, 2026.

A first searches a banking app for deposit records. Payslips are split between email and the company messenger. Photos documenting attendance sit in the phone gallery. Text messages show the employer delaying payment.

A then moves between a labour portal and government guidance to find out whether they qualify for Insolvency Substitute Payment. They do not know whether to enter the bankruptcy filing date or declaration date, which calendar months make up the final six months, or how monthly caps apply. They end up asking a helpline and the company contact again.

At the application stage, A copies the company name, employment period, resignation date, and monthly unpaid amount into each form. They rename image files, download banking records, attach them, and submit them to the labour office. If a request for supplementary material arrives, they must find evidence they submitted earlier all over again.

A service for this moment could ask only about employment status, the reason and date of insolvency, employment period, and the months of unpaid wages on its first screen. From those answers, it could distinguish between Insolvency Substitute Payment and other support routes, then show the likely protected scope and the dates that must be checked.

When A uploads bank records, payslips, and text-message screenshots, the service could group them by month. It could show the promised amount, actual deposits, and shortfall in a single row for each month, and flag missing employment-contract or resignation-date evidence immediately.

The organised material could become a submission bundle for the labour office and a monthly unpaid-wage statement. If the service is not directly connected to official agencies, it should not promise automatic submission. Instead, it can let users add a receipt number or a document received and manage the sequence: submitted, supplementary material needed, confirmation complete, and payment under review.

The final decision remains with people and public institutions. The responsible agency must determine whether the employer disputes the unpaid amount, whether the workplace falls within the law’s scope, and which age-based caps and exclusions apply. The service must not guarantee payment.

Elsewhere, services connected one broken step at a time

The Fair Work Ombudsman, Australia’s workplace regulator, offers “Record My Hours,” a free public app for workers including young and migrant workers to log working hours. Users can record start and finish times using location data or edit them manually, store photos such as payslips, and email their work records.

The app does not complete a complaint form or recover money for the worker. Rather than asking people to reconstruct events after a dispute, it focuses on one step: accumulating evidence from each day of work. No wage amount recovered through the app alone has been separately published.

Singapore’s Tripartite Alliance for Dispute Management (노사분쟁관리연합) wage-claim e-service connects a later part of the process. Workers upload contracts, payslips, and work records, calculate the claim amount, and proceed through online negotiation and mediation. If unresolved, the case can go to the Employment Claims Tribunals.

Depending on the claim amount, the filing fee is roughly KRW 10,000 to KRW 20,000, and both workers and employers use the service. In 2024 results published by Singapore’s Ministry of Manpower, 90% of salary claims were resolved at mediation, 87% concluded within two months, and 94% of claimants who received support recovered their wages in full.

The two cases point in the same direction. Rather than trying to handle reporting, judgment, and payment from the start, a product can first connect one point where work breaks down—such as recording work every day or moving evidence into a claims process.

Four things to build now

1. A six-month unpaid-wage record box

• What it does: Collects work hours, promised monthly pay, actual deposits, and messages with the employer by date, then creates a monthly unpaid-wage record.
• Who uses it: Workers at restaurants with fewer than 10 employees or small factories where payday is frequently delayed.
• Why now: With protection extended to six months, payslips and deposit records from several months ago can now affect the amount someone actually receives.
• First screen: A calendar for the most recent six months, with buttons for “Work records,” “Deposit records,” and “Add messages.”

2. An advance preview of the possible substitute payment range

• What it does: Takes a resignation date, insolvency reason, recognition date, and monthly unpaid amounts, then shows the scheme to review and the likely protected range.
• Who uses it: Former employees who have gone unpaid for four or more months after their company went bankrupt or effectively closed.
• Why now: The applicable scope differs before and after August 20, 2026. Misunderstanding a single date can change the expected amount.
• First screen: Four questions: “Are you still employed?”, “Was there an insolvency decision?”, “When was that date?”, and “How many months are unpaid?”

3. An unpaid-wage application progress board

• What it does: Manages submitted documents, requests for supplementary material, receipt numbers, the next action, and claim deadlines in one place.
• Who uses it: First-time applicants who filed a complaint with a labour office but do not understand the difference between a confirmation document and a substitute-payment claim.
• Why now: When people move between the labour portal, labour offices, and the Korea Workers’ Compensation & Welfare Service, they can easily search for the same information again and miss a deadline.
• First screen: Shows the current stage, the one next action to take, days remaining, and the responsible agency’s contact details prominently.

4. A wage-clearance schedule for small workplaces

• What it does: Manages each worker’s unpaid amount, payment priority, loan-application documents, and whether payment has actually reached each account.
• Who uses it: An owner of a manufacturing business who cannot pay eight employees on time after customer payments stop, but wants to keep operating.
• Why now: General loan limits rose to KRW 200 million per employer and KRW 20 million per worker, but the employer must still separately manage the application to the public agency after receiving confirmation of the unpaid amount.
• First screen: Places each worker’s unpaid amount, funds secured, shortfall, and the next application deadline side by side.

What to check with one person today

Ask one person who has experienced unpaid wages and filed a complaint or a substitute-payment claim to explain the sequence while looking at their phone for 30 minutes. If they moved between a banking app, messenger, photo gallery, labour portal, and phone calls three or more times, or copied the same information more than once, the point that broke most often is worth building first.

Why this matters where you are

Korea’s six-month protection period, eligibility dates, public agencies, and loan limits are Korean conditions, so they may not transfer directly. What can transfer is the product problem: evidence is often spread across banking, messaging, photos, and official application systems. Check which step in your own market breaks first—recording evidence, assembling a claim, or tracking an official process—and build around that step.