Employment Insurance Employment Security Project (2010)

The employment insurance project is largely divided into unemployment benefit, employment security, and vocational ability development. The employment security project has been specifically designed to support employers; hence it is important for them to be familiar with the contents and prepare in advance. Here, I would like to introduce the different types, requirements, and support of the employment security project.
In the case of an employment shortage or unstable employment due to business fluctuations at home or abroad, changes in the industrial structure or decline in employment opportunities, the Minister of Labor shall promote employment stabilization such as prevention of job loss, acceleration of reemployment, and expansion of employment opportunities.

I. 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 Labor provides subsidy to the employer who maintains employment of the employees concerned.

1. Maintenance of employment
(1) Suspension of business
1) Requirement: When the employer suspends business for days exceeding 1/15 (suspension rate) of contractual working days per month and paid allowance for business suspension to employees.
2) Subsidy: 3/4 of the allowance for business suspension ( 2/3 for large company)
(2) Paid or unpaid leave of absence
1) Requirement: When the employer grants paid or unpaid leave of absence for one month or more with an individual written agreement
2) Subsidy: 3/4 of the allowance for leave of absence (2/3 for large company), monthly 200,000 won per person for unpaid leave of absence
(3) Training
1) Requirement: When the employer implements training that is suitable for maintaining employment (more than 20 hours of training, 4 hours per one day, conducted during contractual working hours)
2) Subsidy: total amount for training expenses, 3/4 of wage during training period (2/3 for large company)
(4) Personnel rearrangement
1) Requirement: When the employer adjusts its workforce (more than 50 percent of all employees) to fit a new business category due to establishment or arrangement of equipment and facilities
2) Subsidy: 3/4 of paid wages (2/3 for large company) per adjusted employees for one year period
2. Outplacement support
(1) Requirement: When employers who cannot avoid dismissal for managerial reasons provide outplacement supports via labor-management consultation to the exiting employees due to employment adjustment, retirement age, and contract expiration
※ Total stock increased by more than 10 percent; production volume and total sales decreased by more than 5 percent.
(2) Subsidy: Total expenses will be supported up to 12 months; maximum subsidy: number of recipients x 3 million won


II. Subsidy for employment creation
1. Subsidy for transfer to shift working
(1) Requirement: Increased average numbers of employees as a result of transfer to shift work (3 or 4 shifts) from previous non-shift work; subsidy in case of newly introduced shift work
(2) Subsidy: Quarterly 1.8 million won (1.2 million won for large company) will be paid for one year (limited to 1/3 of total employees before transfer); employees working or supporting shift work shall be subsidized as well.
2. Subsidy for improving working environment of small & medium sized companies
(1) Requirement: When the employer invests 10 million won or more in facilities to improve working environment and hires additional employees
(2) Subsidy: 50% of invested expenses (up to 30 million won) and 1.2 million won per additionally hires (up to 30 persons), which is a one time subsidy
3. Subsidy for small & medium sized companies that hires a professional consultant
(1) Requirement: When the employer newly hires a professional consultant (in area of business planning, product research & development, business strategic planning, and technology)
(2) Subsidy: Subsidizing up to monthly 1.2 million won for the first 6 months and monthly 600,000 won for remaining 6 months (limited to 3 persons per one company); in case where the professional consultant’s age is above 50, the company can hire one additional person.
4. Subsidy for a small & medium sized company that reduces working hours
(1) Requirement: Preferential company that adopts weekly 40 working hours system 6 months earlier before legal enforcement day
(2) Subsidy: Quarterly 1.8 million won per each person exceeding original employees after the adoption of the new working hours system.

Ⅲ. Subsidy for employment promotion

1. Subsidy for hiring a middle-aged person who completes job training
(1) Requirement: When the employer hires an unemployed person of 40 years or older who completes re-employment training of more than 30 days (excludes any contract period of less than one year); not applicable when there is dismissal due to employment adjustment 3 months before employment and 6 months after employment.
(2) Subsidy: monthly 600,000 won for the first 6 months, and monthly 300,000 won for the following 6 months (applicable to any period of employment less than 12 months)
2. Subsidy for employment promotion
※ Common requirement: There shall be no employment adjustment for the period of 3 months before and 12 months after its subsidy; employee with limited contract period will be subsidized; hiring by a designated channel is required.
(1) The aged
1) Requirement: When the employer hires the aged (50 years or older) registered as unemployed for more than three months (one month for manufacturing industry) at the Job Center
2) Subsidy: Monthly 300,000 won for the first 6 months and monthly 150,000 won for the following 6 months (for manufacturing industry, monthly 600,000 won for the first 6 months and monthly 300,000 won for the following 6 months)
(2) The disabled
1) Requirement: When the employer hires the disabled (the seriously disabled) registered as unemployed for more than three months (one month for manufacturing industry) at the Job Center
2) Subsidy: Monthly 600,000 won for the first 6 months and 300,000 won for the following 6 months (monthly 600,000 won for the seriously disabled)
(3) Young people
1) Requirement: When the preferential company that hires an unemployed person (aged 29 or less) who had been unemployed over three months after his/her registration at the Job Center for a position
2) Subsidy: Monthly 450,000 won for the first 6 months and monthly 300,000 won for the following 6 months (for manufacturing industry, monthly 600,000 won for the first 6 months and monthly 300,000 won for the following 6 months)
(4) Matriarch (female head of a household)
1) Requirement: When the employer hires a female head of a household who had been unemployed over one month after her registration at the Job Center for a position
2) Subsidy: Monthly 600,000 won for the first 6 months and monthly 300,000 won for the following 6 months
(5) Female who gave birth
1) Requirement: When the employer hires a female employee who left her job due to pregnancy, childbirth, and child care, and who had been unemployed over one month after her registration at the Job Center for a position, within five years of her previous resignation
2) Subsidy: Monthly 600,000 won for the first 6 months and monthly 300,000 won for the following 6 months
(6) Long-term unemployed employee
1) Requirement: When the employer hires one who had been unemployed over six months after his/her registration at the Job Center for a position
2) Subsidy: Monthly 600,000 won for the first 6 months and monthly 300,000 won for the following 6 months
3. The Aged
(1) Employment of many old people
1) Requirement: When the employer hires an old person of 55 years or older for more than one year exceeding the subsidy-standard rate per industry
2) Subsidy: Quarterly 180,000 won per person exceeding the subsidy-standard rate per industry, which will be subsidized up to 5 years.
Subsidy-standard rate: 4% for manufacturing industry, 42% for real estimate, 17% for service, and 7% for other industry
(2) Extension of retirement age
1) Requirement: When the employee (of 56 years or older) works for more than 18 months in the company whose retirement age is extended one year or longer; that company shall not have imposed reduction of retirement age during the past three years
2) Subsidy: Monthly 300,000 won per person for the half period out of the total period of extended retirement age (it is subsidized to an employee who has worked since the previous retirement age, but within 5 years from extended retirement age.)
(3) Continuous employment after retirement
1) Requirement: In a company where its retirement age is regulated as 57 years, and the employer has continued to hire the employee who has worked for more than 18 months or rehired the retired employee within 3 months (in this case, the beneficiaries of allowance of wage peak system shall be excluded ).
2) Subsidy: Monthly 300,000 won per person (subsidy application will be filed quarterly) up to 6 months (12 months for manufacturing industry)
4. Promotion subsidy of childcare leave and subsidy for hiring replacement personnel
(1) Requirement: When the employer grants childcare leave of 30 days or more to an employee and maintains his/her employment for 30 days or more after returning from the childcare leave; when the employer hires a replacement personnel for 30 days or more from 30 days prior to the childcare leave, subsidy for hiring replacement personnel will be provided additionally.
(2) Subsidy: Monthly 200,000 won per person (subsidy application will be made quarterly) during the employee’s childcare period (including the period of maternity leave after childbirth); additional subsidy of monthly 300,000 won per person (monthly 200,000 won for large companies) will be paid for hiring replacement personnel for the number of months from starting day of childcare leave to the final day of childcare leave.
5. Subsidy for reduction of working hours during childcare period
When the employer allows reduced working hours for 30 days or more instead of providing childcare leave and maintains continuous employment of the employee for 30 days or more after that period
6. Nursery
(1) Subsidy for nursery
1) Requirement: Operation of nursery (eligible for accommodation of 11 infants or more) in the workplace; subsidy of labor cost for chief of the nursery in addition to nursery teacher (in the case of 20 infants or more) and cook (in the case of 40 infants or more)
2) Subsidy: Monthly 800,000 won per one teacher (cook) and in case wages are less than 800,000 won, actual payment of wages is subsidized. If the cook is a part-time employee, subsidy will not be provided.
(2) Loan for setting up a nursery
1) Requirement: setting up or renovating the nursery in the workplace; application for a loan to the Employee Welfare Corporation
2) Subsidy: 5-year-fixed-repayment with a five-year grace period (up to 500 million won will be loaned with 1 ~ 2% of interest.)
7. Maintaining allowance for the Wage Peak System
(1) Requirement: In the company where the Wage Peak System is introduced through an agreement between labor and management, when this year’s wage for employees of 54+ years and employed for more than 18 months has been reduced more than 10% compared to the wages paid last year, due to the application of the Wage Peak System, the subsidy is provided, excluding those whose annual wages after the reduction of wages are more than 57.6 million won (monthly 4.8 million won); the guaranteed age is 55 years old for 2006 and 2007, and 56 years old for 2008); and the subsidy shall not be provided in cases of disciplinary action to the employee due to his/her own cause, disease and injury, shutdown of workplace, reduction of working hours, industrial actions, etc.
(2) Subsidy: Ages from 54 to 60 (maximum 6 years and in case of employment less than 6 years, the actual period is subsidized); quarterly 50% for the difference between the peak wages and the wages at the time of application (limited to quarterly 1.5 million or monthly 500,000 won.
8. Subsidy for continuous employment after childbirth
(1) Requirement: When the employer renews the employment contract for the period of one year or longer immediately after the employment contract of a short-term employee (of one year or less) or of a dispatched employee whose contract expired during her maternity leave (including protection leave for premature birth or miscarriage) or 16 month-long pregnancy, 6 month-long subsidy will be provided. (In the case of renewal to regular employment, one year-period will be subsidized.)
(2) Subsidy: 400,000 won for extended fixed period for 6 months (monthly 600,000 won for six month to the renewal to regular status, 300,000 won for following six month, this subsidy shall be applied to contracts after April 30th 2008); Subsidy will be provided on monthly basis starting the following month of renewed contract.

8. Employment for construction workers
(1) Subsidy of continuous employment for construction workers
1) Requirement: When the employer continues to pay wages to workers during a suspended construction period due to seasonal weather (period June to August and December to February)
2) Subsidy: 2/3 of the amount paid (subsidized up to 35,000 won per day)
(2) Subsidy of retirement deduction for construction workers
1) Requirement: When the employer who joins the retirement deduction premium
2) Subsidy: 1/3 of deduction premium from the day which the employee shall become a receiver of premium
(3) Subsidy of employment insurance management
1) Requirement: When the employer appoints employment manager to deal with insurance for construction workers with electronic process
2)        Subsidy: Monthly 300,000 won for 100~200 person, monthly 800,000 won for 200~400 person, monthly 1,200,000 won for 400~700 person, monthly 1,600,000 won for more than 700 person