ACT ON THE COLLECTION, ETC. OF PREMIUMS FOR EMPLOYMENT INSURANCE AND INDUSTRIAL ACCIDENT COMPENSATION INSURANCE [See entire ACT]

CHAPTER Ⅱ Establishment and Termination of Insurance Relationship

Article 5 (Insurance Subscribers)

(1) The employers and workers (excluding those excluded from application under Article 10 and 10-2 of the Employment Insurance Act;hereinafter in this paragraph, the same shall apply) of a business subject to the Employment Insurance Act shall compulsorily become a subscriber of employment insurance (hereinafter referred to as the “employment insurance”) under the Employment Insurance Act.
(2) If the employer of a business for whom the same Act does not apply pursuant to the proviso of Article 8 of the Employment Insurance Act gets approval from the Corporation with the consent of a majority of the workers, the employer and workers of the business may subscribe to employment insurance.
(3) The employer of a business subject to the Industrial Accident Compensation Insurance Act shall compulsorily become a subscriber of industrial accident compensation insurance (hereinafter referred to as the “industrial accident compensation insurance”) under the Industrial Accident Compensation Insurance Act.
(4) The employer of a business for whom the same Act does not apply pursuant to the proviso of Article 6 of the Industrial Accident Compensation Insurance Act may join the industrial accident compensation insurance with the approval of the Corporation.
(5) If an employer who has subscribed to employment insurance or industrial accident compensation insurance pursuant to paragraph (2) or (4) cancels the insurance contract, he/she shall get approval from the Corporation in advance. In this case, the insurance contract shall be cancelled after the end of the insurance year in which the insurance contract is made.
(6) If an employer cancels an employment insurance contract pursuant to paragraph (5), the employer shall get the consent of a majority of the workers.
(7) The Corporation may, if deemed impossible to continuously maintain an insurance relationship due to the absence of substantial business, etc., cancel the insurance relationship.
[This Article Wholly Amended by Act No. 9896, Dec. 30, 2009]

Article 6 (Fictitious Insured Status)

(1) If a business whose employer and workers become compulsory subscribers to employment insurance pursuant to Article 5 (1) becomes a businesses excluded from application pursuant to the proviso of Article 8 of the Employment Insurance Act due to reasons such as a change in business size, etc., the employer and workers shall be considered subscribed to employment insurance under Article 5 (2) from the date of coming to fall thereunder.
(2) If a business whose employer becomes a compulsory subscriber of industrial accident compensation insurance pursuant to Article 5 (3) comes to fall under the businesses excluded from application pursuant to the proviso of Article 6 of the Industrial Accident Compensation Insurance Act due to reasons such as a change in business size, etc., the employer shall be considered subscribed to industrial accident compensation insurance under Article 5 (4) from the date of coming to fall thereunder.
(3) If an employer prescribed in paragraphs (1) through (4) of Article 5 comes to not employ a worker (excluding workers excluded from application under Article 10 and 10-2 of the Employment Insurance Act in the case of employment insurance;hereinafter the same shall apply in this paragraph) during operation of the business, the employer shall be considered subscribed to insurance even for a non-employment period not exceeding one year from the first day of unemployment.
(4) The provisions of Article 5 (5) and (6) shall apply mutatis mutandis to the cancellation of an insurance contract by an employer and workers under paragraphs (1) and (2).
[This Article Wholly Amended by Act No. 9896, Dec. 30, 2009]

Article 7 (Date of Establishment of Insurance Relationship)

An insurance relationships shall be established on the date prescribed in any of the following subparagraphs:
1. In the case of a business where the employer and workers become compulsory subscribers to employment insurance pursuant to Article 5 (1), the date on which the business is initiated (In case the business prescribed in the proviso of Article 8 of the Employment Insurance Act comes to fall under the businesses where the employer and workers become compulsory subscribers to employment insurance pursuant to Article 5 (1), the date of coming to fall thereunder);
2. In the case of a business where the employer becomes a compulsory subscriber to industrial accident compensation insurance pursuant to Article 5 (3), the date on which the business is initiated (In case the business prescribed in the proviso of Article 6 of the Industrial Accident Compensation Insurance Act comes to fall under the businesses where the employer becomes a compulsory subscriber to industrial accident compensation insurance pursuant to Article 5 (3), the date of coming to fall thereunder);
3. In the case of a business which has joined insurance pursuant to paragraph (2) or (4) of Article 5, the day following the date on which the Corporation receives an application for approval for joining insurance from the employer;
4. In the case of businesses subject to blanket application pursuant to Article 8 (1), the date on which the first business that has been carried out is initiated;and
5. In the case of a subcontractor that has joined insurance pursuant to the proviso of subparagraph (1) and subparagraph (2) of Article 9, the beginning date of the construction work subcontracted.
[This Article Wholly Amended by Act No. 9896, Dec. 30, 2009]

Article 8 (Blanket Application for Businesses)

(1) If each of the businesses run by an employer who becomes a compulsory insurance subscriber under Article 5 (1) or (3) meets any of the following conditions, all of the businesses shall be considered a single business in the application of this Act:
1. The employer is the same person;
2. Each business has a fixed period;and
3. Type of business etc. meet the conditions prescribed by the Presidential Decree.
(2) If an employer other than those subject to blanket application pursuant to paragraph (1) regards all of the businesses (limited to businesses which are categorized as the same type of business by the Minister of Employment and Labor, in the case of industrial accident compensation insurance) meeting the condition described in paragraph (1) 1 as a single business and wants this Act to apply accordingly, the employer shall get approval from the Corporation, and if the employer obtains the approval, he/she shall begin to be subject to blank application from the day following the date on the Corporation receives an application for approval for blank application from the employer. In this case, as long as the blanket application is not cancelled pursuant to paragraph (3), the employer shall be continuously subject to blanket application for all of his/her businesses even in the following insurance years. [Amended by Act No. 10339, Jun. 4, 2010]
(3) If an employer subject to blanket application under paragraph (2) intends to cancel the blanket application, the employer shall get approval from the Corporation. In this case, the cancellation of the blanket application shall take effect for insurance relationships of the following insurance years.
(4) If an employer subject to blanket application pursuant to paragraph (1) does not fall under the conditions described in paragraph (1) 3, the employer shall be considered to get approval for blanket application pursuant to paragraph (2) in the application of this Act and if the employer intends to cancel the blanket application, he/she shall cancel it in accordance with paragraph (3).
[This Article Wholly Amended by Act No. 9896, Dec. 30, 2009]

Enforcement Ordinance

Article 6 (Conditions for Blanket Application for Businesses)

(1) “The conditions prescribed by Presidential Decree” in Article 8 (1) 3 of the Act refers to Construction Business as determined by the Korean Standard Industrial Classification.
(2) An employer who intends to get approval for blanket application pursuant to the former part of Article 8 (2) of the Act shall apply to the Corporation.
(3) An employer who intends to get approval for the cancelation of blanket application pursuant to the former part of Article 8 (3) of the Act shall apply to the Corporation for this no later than seven days before the beginning of the following insurance year.
[This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010]

Enforcement Ordinance

Article 7 (Blanket Application for Contract Business)

(1) "Construction business or any other business prescribed by Presidential Decree" in the main sentence of Article 9 (1) of the Act means construction business.

(2) A subcontractor can be deemed a business owner under the proviso of Article 9 (1) of the Act if the subcontractor is:

1. A constructor defined in subparagraph 7 of Article 2 of the Framework Act on the Construction Industry;

2. A housing constructor registered under Article 4 of the Housing Act;

3. A constructor defined in subparagraph 3 of Article 2 of the Electrical Construction Business Act;

4. An information and communications construction business entity defined in subparagraph 4 of Article 2 of the Information and Communications Construction Business Act;

5. A fire-fighting system business entity defined in Article 2 (1) 2 of the Fire-Fighting System Installation Business Act;

6. A cultural heritage repair business entity defined in subparagraph 5 of Article 2 of the Act on Cultural Heritage Maintenance.

(3) Where a subcontractor is intended to be deemed a business owner under the proviso of Article 9 (1) of the Act, the relevant original contractor shall conclude a written contract(including electronic documents) on the transfer of payment of insurance premiums with such subcontractor; and shall file an application with COMWEL for approval to deem the subcontractor a business owner, within 30 days from the date the relevant subcontracted construction project commences.

(4) COMWEL shall not grant approval to deem a subcontractor a business owner, if any of the following grounds arises in connection with the subcontracted construction project with respect to which the original contractor has filed an application for approval to deem the subcontractor a business owner pursuant to paragraph (3):

1. Where any occupational accident defined in subparagraph 1 of Article 5 of the Industrial Accident Compensation Insurance Act occurs, during the period from 15 days after commencement of the subcontracted construction project until the application for such approval;

2. Where any occupational accident defined in subparagraph 1 of Article 5 of the Industrial Accident Compensation Insurance Act occurs during the period from commencement of the subcontracted construction project until the application for such approval; and insurance benefits must be collected from the original contractor in connection with such accident pursuant to Article 26 (1) 1 of the Act.

[This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010]

Article 10 (Date of Termination of Insurance Relationship)

An insurance relationships shall be terminated on the date described in any of the following subparagraphs:
1. The day following the date on which the business is closed or discontinued;
2. In case an insurance contract is canceled pursuant to Article 5 (5) (including the case of mutatis mutandis application in Article 6 (4)), the day following the date on which approval for the cancelation is obtained from the Corporation;
3. In case the Corporation terminates insurance relationships pursuant to Article 5 (7), the day following the date on which the termination is decided and notified;and
4. In the case of the employer prescribed in Article 6 (3), the day following the date which marks one year since the first day of a worker’s period of unemployment (excluding those excluded from application under Article 10 and 10-2 of the Employment Insurance Act) is not employed.
[This Article Wholly Amended by Act No. 9896, Dec. 30, 2009]

Enforcement Ordinance

Article 8 (Notification of Establishment and Termination of Insurance Relationship)

The Corporation shall, if an insurance relationship is established or terminated, inform the employer concerned of this without delay.
[This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010]

Article 11 (Report of Insurance Relationship)

(1) An employer shall report the establishment or termination of an insurance relationship to the Corporation within 14 days of the establishment of the insurance relationship, if the employer automatically subscribes to insurance under Article 5 (1) or (3), and within 14 days of the termination of the insurance relationship, if the insurance relationship is terminated due to the closure, discontinuation, etc. of the business:Provided that, businesses falling under any of the following subparagraphs shall report the establishment of an insurance relationship within the times given.
1. Businesses discontinued within 14 days of the establishment of an insurance relationship:the day before the date the business is discontinued.
2. From among businesses determined by the Presidential Decree under the proviso of Article 6 of the Industrial Accident Compensation Insurance Act, businesses that are not clearly subject to the same Act when initiating business, and determined whether they are subject to the same Act on the basis of the number of ordinarily employed workers used for a specific period at the workplace concerned pursuant to the conditions prescribed by the Presidential Decree:within 14 days from the date the set period ends.
(2) An employer shall report the establishment or termination of blanket application to the Corporation within 14 days from the first day of the first business carried out if the business is subject to blanket application under Article 8 (1), and within 14 days of the termination date, if the blanket application is terminated due to the closure, discontinuation, etc. of the business.
(3) The employer of businesses subject to blanket application pursuant to Article 8 (1) and (2) shall report the start and discontinuation of each of the businesses (excluding businesses reported under paragraph (1)) to the Corporation within 14 days of its starting and discontinuation dates (Report of business discontinuation is limited to only the case of employment insurance):Provided that in case a business is discontinued within 14 days of its starting date, the report shall be made until the day before the date of discontinuation.
[This Article Wholly Amended by Act No. 9896, Dec. 30, 2009]

Article 12 (Report of Changes in Insurance Relationship)

If there is any change in matters prescribed by the Presidential Decree, such as the name of an employer, the location of a business, etc., an employer who has subscribed to insurance shall report the change to the Corporation within 14 days of the date of change.
[This Article Wholly Amended by Act No. 9896, Dec. 30, 2009]

Enforcement Ordinance

Article 9 (Report of Changes in Insurance Relationship)

Pursuant to Article 12 of the Act, an employer shall, if any change is made to the following matters concerning his/her business, report this to the Corporation within 14 days of the date on which the change is made:Provided that subparagraph 6 shall be reported within 14 days from the first day of the following insurance year:
1. The name and resident registration number of the employer (the representative, in the case of a corporation);
2. The name and location of the business;
3. The type of the business;
4. Business registration number (including corporation registration number in the case of a corporation);
5. Business period, in the case of businesses with a fixed term, such as construction work or logging;and
6. The number of ordinarily employed workers, in the case where any change is made to entitlement to preferentially supported enterprises under Article 12 of the Enforcement Decree of the Employment Insurance Act.
[This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010]

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

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