Ⅳ. Projects Promoted through Employment Insurance

Employment insurance projects are divided into unemployment benefits, employment security, and vocational skills development projects.

1. Unemployment benefits

(1) Employees eligible for unemployment benefits

Employment benefits are paid to unemployed persons who satisfy the following two criteria: employees who had to leave a job involuntarily for reasons such as dismissal for managerial reasons, expiration of contract period, etc. after having worked at least 180 days during the last 18month period, and unemployed people who are actively seeking to become reemployed. However, unemployment benefits shall not be given in cases where an employee has left his/her job to start another job or become self-employed or in cases where the employee is separated from employment following the advice of the employer or dismissed due to reasons attributable to him/herself.

※ Cases dismissed due to critical reasons attributable to employee
① The employee is sentenced to imprisonment (without being assigned prison labor or more severe punishment) for violating the Criminal Act or laws relating to employment;
② The employee has, on purpose, caused a considerable hindrance to the business or inflicted any damage to property due to embezzlement, disclosure of corporate secrets, damage to property, etc.; and
③ The employee has been absent from work for a long time without due notice or justifiable reasons.
* If an employee to whom any of the above items apply resigns voluntarily at the employer’s advice, he/she shall not be eligible to receive unemployment benefits.


Unemployment benefits are paid to an unemployed person when he/she reports unemployment and is recognized as an eligible recipient, and when he/she begins seeking reemployment. Therefore, this beneficiary process requires the recognition of unemployment status and evidence to prove the applicant is actively seeking reemployment for a unit period of three to four weeks. Therefore, in principle, a reemployed employee is not eligible for unemployment benefits. If an eligible recipient is employed in a job that is deemed certain to keep him/her employed for at least six months, or if an eligible recipient is deemed certain to run his/her own business for six months or more, then the reemployed person can get a certain portion(1/3 ~ 2/3) of the benefit still left as an early reemployment incentive.
In cases where an employee resigns from a company voluntarily by submitting a resignation letter or changing occupation, becoming self-employed, or going back to school, unemployment benefits shall, in principle, not be given. However, the employee can receive unemployment benefits under the following special circumstances:


Acceptable reasons for an unemployed person to receive benefits (Employment Insurance Decree (Article 101 (2) Table 2)
1. In cases where one of the following occurs for longer than two months within a one year period prior to his/her resignation:
A. Where his/her current working conditions decrease to a level lower than those suggested at the time of employment or those generally applied during employment, or in cases where his/her payment of wages is delayed;
B. Where his/her wages paid for contractual working hours is lower than the minimum wage under the Minimum Wage Act;
C. Where the employer violates the restriction on extended work under Article 53 of the Labor Standards Act; or
D. In cases where the allowance for business suspension is less than 70 percent of his/her average wage.

2. In cases where the company faces certain bankruptcy or cessation of business, or in cases where a massive personnel reduction is planned.

3. For one of the following reasons, the employee is advised by the employer to voluntarily resign, or in cases where the employee resigns as a result of the employer's promotion for voluntary resignation in accordance with a personnel reduction plan.
A. Transfer, acquisition and merger of business, or partial cessation of business or change of business;
B. Change of working environment due to closing or downsizing of the organization or the introduction of new technology/technical innovation; and
C. Deterioration of business, personnel redundancy or an equivalent reason.

4. In cases where it is hard to commute due to one of the following reasons:
A. The company relocates or the employee is transferred to a far-away workplace;
B. The employee moves to support his/her spouse or family; and
C. When it is difficult to commute to the workplace due to unavoidable reasons.

5. In cases where the employee has to care for an ill parent or family member for more than 30 days.

6. In cases where the employee cannot fulfill his/her duties due to deteriorating health, mental and/or physical disorders, disease, injury, loss of eyesight, hearing or sense of touch.

7. In cases where the employee cannot fulfill his/her duties continuously due to pregnancy, childbirth, or military service under the Military Service Act.

8. In cases where there is an assumption that ordinary employees might also resign from the company if they were under such similar circumstances.


(2) Amount of unemployment benefit

The unemployment benefit is 60% of the average wage prior to separation within the range of 100 to 270 days in accordance with the age and insured period as of separation time.
⇨ Maximum amount: 66,000 won per day(As of 2020)
⇨ Minimum amount: daily contractual working hours x 80% of daily minimum wage; However, if the lowest amount calculated(based upon 80% of the minimum wage) is less than 60,120 won, the amount is 60,120 won.
⇨ Number of days unemployment benefits can be received


Even though an unemployed person is eligible for unemployment benefits, he/she cannot receive them if 12 months have passed from the initial date of unemployment. These 12 months are called the period of benefit payment. As unemployment benefits cannot be paid if the period of benefit payment expires, an unemployed person shall apply for benefits with the Employment Support Center without delay right after termination of employment.

※ Reasons for extension of payment period (maximum extension is 4 years)
- Injury or illness of the recipient (excluding injuries or illnesses for which injury and disease benefits are being paid);
- Injury or illness of the recipient’s spouse or lineal ascendants or descendants;
- Mandatory military service under the Military Service Act;
- Detention or execution of sentence on criminal charges; and
- Pregnancy, childbirth, and childcare (limited to within 3 years after the birth of a child).

(3) Payment procedures for unemployment benefits

To receive unemployment benefits, immediately upon termination of employment, the unemployed person shall visit the Employment Support Center in his/her location with identification documents, such as a residence card or driver’s license, and report unemployment. The report of unemployment shall include an application for work and an application for the recognition of eligibility for benefit. The head of the Employment Security Office shall then notify the applicant of its decision within 14 days.

1) Recognition of unemployment

Recognition of unemployment means that the head of an Employment Security Office recognizes that the applicant has become unemployed and is actively seeking reemployment during a certain recognition period of unemployment, and is eligible for unemployment benefits. An eligible recipient shall present him/herself on the date of recognition of unemployment designated by the head of the Employment Security Office over the course of one to four weeks from the date the unemployment was reported, and shall report the efforts he/she has made to become reemployed, and the head of the Employment Security Office shall recognize his/her unemployment based upon the details of the report. Eligible recipients cannot receive unemployment benefits if they were not recognized as being unemployed because of a failure to report to the Employment Security Office on the day(s) required.

2) Actively seeking to become reemployed

Eligible recipients shall actively seek to become reemployed(i.e., get another job) in accordance with the reemployment action plan completed on the first day of unemployment so that they can be recognized as being unemployed. Here, “actively seeking to become reemployed” means the unemployed person has taken action such as submitting job applications or participating in job interviews, and/or made efforts to become self-employed. Job-seeking activities also include submission of job applications by mail, fax or email, participation in job interviews with recruiters at a job fair, or attending occupation guidance programs conducted by the Employment Security Office.

(4) Fraudulent receipt of unemployment benefits

Unemployment benefits are payable when an applicant is recognized as an unemployed person by the head of an Employment Security Office and actively seeks to become reemployed during the recognition period of unemployment. It is illegal to receive unemployment benefits through false or fraudulent methods.

※ The most common cases of illegally receiving benefits involve a person not reporting reemployment during the recognition period of unemployment or reporting it using fraudulent information, or making a false report regarding his/her wages while employed or the reason(s) for termination.

If it is found that a person has received unemployment benefits through illegal methods, he/she shall refund the benefit received and, as a penalty, pay an additional, identical amount equivalent to the illegally received benefit. Further, his/her unemployment benefits will stop and the person concerned could face criminal prosecution. If a company manager was involved in perpetuating the illegality, the employer shall also share joint responsibility with the person.

1) A small illegal benefit can be forgiven only once.

2) Criminal punishment can be pursued when a person violates the law twice, where two people or more collaborate and receive benefits illegally, and in cases where a person rejects the requests to repay the illegally received benefits despite repeated demands from the Employment Security Office.

3) In cases where illegal benefits were paid due to a falsified description on the company’s confirmation of severance, an additional fine(2~3 million won) will be levied against the company.

2. Employment security project

It is important for the employer to be familiar with the contents and prepare in advance to receive these subsidies.
These subsidies are available to the employers who, instead of cutting their workforce, retain jobs or recruit unemployed people, so as to increase job security for incumbent employees while promoting employment of disadvantaged persons.

(1) Subsidy for employment adjustment

When the employer adjusts employment through suspension of business, reduction of working hours, training, suspension of work, and personnel rearrangement, the Ministry of Employment and Labor provides a subsidy to the employer if he/she maintains employment of the employees concerned(Article 21 of the EIA).

(2) Subsidy for employment creation

The Minister of Employment and Labor may provide support to employers who have expanded employment opportunities by improving employment environments, changing work arrangements, etc(Article 20 of the EIA).

(3) Subsidy for employment promotion

① Subsidy for employment promotion: older workers, those with disabilities, young people, female heads of households, women who have just given birth, long-term unemployed, ② Older workers: employing many older people, extending retirement age, continuing employment after retirement, ③ Subsidy to promote childcare leave and subsidy for hiring replacement personnel, ④ Subsidy for reducing working hours during childcare period, ⑤ Nursery, ⑥ Maintaining allowance for the wage peak system, ⑦ Subsidy for continuous employment after childbirth, ⑧ Employment for construction workers

3. Vocational skills development project

Financial backing is offered to employers who give vocational training to their employees and employees who take up training for the purpose of self-development.

(1) Support for the employer
① Support for vocational skills development training, ② Support for paid-leave training
③ Support, etc., for vocational skills development training facilities, ④ Support for vocational skills development of construction workers

(2) Support for the employee

① Support for tuition, ② Loan for tuition, ③ Re-employment training for the unemployed, ④ Support for government-commissioned training expenses.