A Homeplus store in Seoul. [Herald DB]
A Homeplus store in Seoul. [Herald DB]

The Ministry of Employment and Labor has set up a dedicated task force to prepare for a potential wave of unpaid wages and severance pay at Homeplus, as the retailer's court-ordered rehabilitation proceedings were terminated, raising the prospect of bankruptcy.

The ministry has already filed criminal charges against Homeplus management over wage arrears from March through May, and a full investigation into whether June wages and severance pay have gone unpaid is now underway.

According to the ministry Tuesday, the Seoul Southern Employment and Labor Office formed the task force after wage arrears first emerged at Homeplus in December last year and has been monitoring the situation continuously since.

The ministry completed a comprehensive investigation into wage arrears from March through May, directed the company to clear the outstanding amounts, and criminally charged Homeplus executives on suspicion of violating the Labor Standards Act for failing to pay wages on time.

A full investigation is now underway to determine whether June wages have been withheld. Homeplus pays salaries on the 21st of each month, but June wages have not yet been disbursed.

The ministry is also closely watching the possibility of severance pay arrears stemming from large-scale departures. Homeplus operates a retirement benefit scheme and has been setting aside severance funds, but the accumulated amount is understood to fall short of the legally required minimum. The company issued an internal notice Thursday saying severance payments for employees who left in mid-June would be delayed due to a lack of funds.

Under the Labor Standards Act, severance pay must be issued within 14 days of an employee's departure, raising concerns that arrears could begin to mount in earnest this week.

Beyond the Seoul Southern office's response, the ministry's headquarters has also been holding its own review meetings to manage the Homeplus situation.

There are growing fears that a full bankruptcy could replay the 2024 collapse of Qoo10 affiliates Tmon and WeMakePrice, which triggered massive wage and severance arrears. Prosecutors confirmed that unpaid wages and severance across Qoo10 affiliates exceeded 26 billion won ($17 million) in that case.

Meanwhile, the Seoul Bankruptcy Court ruled Friday to terminate Homeplus's court-led rehabilitation proceedings. Homeplus has 14 days from that ruling to file an immediate appeal; if it does not, the termination becomes final and the company is likely to be pushed into bankruptcy proceedings.


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