SMEs Request Employment Minister to Raise Employment Retention Subsidy Limit to 90%

Headquarters of the Korea Federation of Small and Medium Business

[Asia Economy Reporter Kim Daeseop] On the 5th, the small and medium-sized enterprises (SME) sector will propose support measures for SMEs affected by the novel coronavirus infection (COVID-19) to Minister Lee Jae-gap of the Ministry of Employment and Labor, including the expansion of the employment retention subsidy limit. Amid concerns that the COVID-19 situation is more severe and prolonged than expected, they aim to convey the difficulties faced by SMEs and urge active measures.

On this day, Kim Ki-moon, Chairman of the Korea Federation of SMEs, plans to meet Minister Lee Jae-gap, who is scheduled to visit the Federation's office in Yeouido, Seoul at 11:30 a.m., to request ▲expansion of the employment retention subsidy limit ▲active approval of special extended work applications ▲expansion of designation of special employment crisis industries.

This meeting was arranged for Minister Lee to explain the government's proactive employment stabilization measures related to COVID-19 announced on the 28th of last month and to seek cooperation from the SME sector.

The SME sector plans to propose improving the employment retention subsidy from the current 75% (priority support target companies) to 90% for SMEs and 80% for mid-sized companies.

Although the government expanded the support ratio of the employment retention subsidy from two-thirds to three-fourths of the paid leave and suspension allowances paid by employers through the COVID-19 measures announcement, the current support level still requires employers to bear more than one-fourth of the wages, causing difficulties such as choosing unpaid leave, according to industry opinions.

They will also request active approval of special extended work applications. Even companies not directly related to COVID-19 are suffering indirect damage such as domestic demand recession and labor shortages, so broad approval is needed for special extended work applications due to unavoidable workload surges.

According to the SME sector, despite the expansion of reasons for approval of special extended work under the Enforcement Rules of the Labor Standards Act in January, it remains difficult to obtain approval for special extended work if direct relevance to COVID-19 cannot be proven on site. Recently, among 180 special extended work applications approved, 131 were from COVID-related workplaces such as quarantine and mask manufacturers.

The SME sector will also propose ▲expansion of designation of special employment crisis industries ▲raising the support limit for elderly continuous employment incentives ▲improvement of the foreign worker system to resolve labor shortages in root companies ▲and maximum consideration of the COVID-19 situation in the 2021 minimum wage deliberations.

According to an emergency management status survey on COVID-19 conducted by the Korea Federation of SMEs at the end of last month targeting 300 Chinese export-import companies and domestic service companies, 70.3% of SMEs reported being affected. In particular, 47.3% cited "expansion of employment retention subsidies" as a key support measure the government should prioritize (multiple responses allowed).

In response to concerns about the prolonged COVID-19 situation, the Korea Federation of SMEs has been operating the COVID-19 SME Countermeasures Headquarters independently since last month, led directly by Chairman Kim Ki-moon. They are conducting rapid damage assessments and monitoring government support measures.

Chairman Kim Ki-moon stated, "Economic activities have contracted due to COVID-19, causing significant damage to SMEs across all industries. Since this damage can directly affect workers, active measures to support SMEs are necessary."

This content was produced with the assistance of AI translation services.