SMEs "Special Extended Work Approval for Reasons Other Than COVID-19"... Meeting with Minister of Employment (Comprehensive)

Minister Lee Jaegap Visits Korea Federation of SMEs
Meets Kim Gimuon, President of Korea Federation of SMEs, Requests Government Policy Cooperation
SME Sector Conveys On-Site Difficulties and Urges Measures
Proposes Raising Employment Retention Subsidy Limit to 90%
Expansion of Special Employment Crisis Industry Designation, etc.

Kim Ki-moon, President of the Korea Federation of SMEs (right), is proposing support measures for small and medium-sized enterprises affected by COVID-19 to Lee Jae-gap, Minister of Employment and Labor, who visited the Federation of SMEs in Yeouido, Seoul, on the 5th.

[Asia Economy Reporter Kim Daeseop] Kim Gi-moon, Chairman of the Korea Federation of SMEs, met with Lee Jae-gap, Minister of Employment and Labor, on the 5th to propose support measures for small and medium-sized enterprises (SMEs) affected by the novel coronavirus infection (COVID-19), including the expansion of the employment retention subsidy limit. The SME sector conveyed the difficulties faced by SMEs amid concerns that the COVID-19 crisis is more severe and prolonged than expected, urging for active measures.

On this day, Kim Gi-moon, Chairman of the Korea Federation of SMEs, along with about 10 representatives from the SME sector, visited the Korea Federation of SMEs in Yeouido, Seoul, and requested Minister Lee Jae-gap to ▲expand the limit of employment retention subsidies ▲actively approve applications for special extended working hours ▲expand the designation of special employment crisis industries.

Chairman Kim Gi-moon stated, "Economic activities have contracted due to COVID-19, causing significant damage to SMEs regardless of industry," adding, "Since this damage could directly affect workers, active measures to support SMEs are necessary."

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 proposed improving the employment retention subsidy from the current 75% (for priority support enterprises) to 90% for SMEs and 80% for mid-sized companies.

Although the government expanded the ratio of support from two-thirds to three-fourths of the leave and suspension allowances paid by employers when providing employment retention subsidies 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 opting for unpaid leave, according to industry opinions.

In response, Minister Lee Jae-gap said, "Employment retention subsidies for SMEs seem to be very helpful. They are based on legal grounds and have been expanded due to changes in the COVID-19 situation. Special employment support industries can receive up to 90%." He also explained, "We are approving special extended working hours not only for COVID-19 related quarantine activities but also when workload increases."

Kim Ki-moon, President of the Korea Federation of Small and Medium Business (fifth from the left), and Lee Jae-gap, Minister of Employment and Labor (fourth from the left), attended a meeting related to COVID-19 response held at the Korea Federation of Small and Medium Business in Yeouido, Seoul, on the 5th, and took a commemorative photo with representatives of the small and medium business sector and other officials.

They also requested active approval of applications for special extended working hours. Even companies not directly related to COVID-19 are suffering indirect damage such as domestic demand slump and labor shortages, so broad approval of special extended working hours applications due to unavoidable workload surges is necessary.

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

The SME sector also proposed ▲expanding the designation of special employment crisis industries ▲raising the support limit for continued employment incentives for the elderly ▲improving the foreign worker system to alleviate labor shortages in root industries ▲maximizing consideration of the COVID-19 situation in the 2021 minimum wage deliberations.

The government is reviewing the designation of special employment crisis industries mainly in travel, tourism, and accommodation sectors, but the impact of COVID-19 is also very significant in export manufacturing, exhibition and event agencies, and food service industries.

Especially as the increase in leave and suspension due to COVID-19 is intensifying labor cost burdens for SMEs, they requested improving the continued employment incentive for the elderly from the current 300,000 KRW per month (up to 2 years) to 500,000 KRW per month (up to 5 years).

Minister Lee said, "Regarding the consideration of the 2021 minimum wage, it is a matter for the Minimum Wage Commission to decide, but I will express the opinion that various economic and employment situations should be considered so that social acceptance can be reflected."

A recent urgent 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 found that 70.3% of SMEs suffered damage. Among the support measures that the government should prioritize (multiple responses allowed), 'expansion of employment retention subsidies' accounted for 47.3%.

Due to concerns about the prolonged COVID-19 crisis, the Korea Federation of SMEs has already been operating the COVID-19 SME Countermeasures Headquarters independently since last month, with Chairman Kim Gi-moon personally leading the effort. They are conducting rapid damage assessments and monitoring government support measures.

Minister Lee said, "We will carefully consider the proposals made today," adding, "We will actively cooperate with related ministries to ensure that government measures are implemented smoothly on the ground."

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