Incheon City Supports Social Enterprises Affected by COVID-19... Expanding Labor Costs and Public Procurement

Labor Cost Support Rate 20%?30%, Up to 90% Support for 5 Months
Nation's First 'Contract Controller' System Implemented to Expand Public Procurement

Incheon City Hall

[Asia Economy Reporter Park Hyesook] Incheon City is preparing and implementing various support measures to minimize the damage to social economy enterprises struggling due to the novel coronavirus infection (COVID-19) crisis and to support their growth.

First, for companies participating in the (preliminary) social enterprise job creation project, the wage support rate will be expanded from 20% to 30% until July. As a result, including from last month, companies can receive up to 90% wage support (an average of 500,000 KRW per participating worker per month) over five months, which is expected to greatly help management.

Additionally, the support target has been expanded from "companies participating in the job creation project with a sales decrease of 50% or more" to "all companies participating in the job creation project," and the procedure has been simplified to provide automatic payment without a separate application process. The wage and social insurance support funds, which were previously paid in advance and settled afterward, will now be implemented in an advance payment and post-settlement method.

The city will hold a financial support review committee this month to select companies participating in the job creation project, and plans to exempt penalties for temporary wage arrears and employment retention measures caused by COVID-19 so that affected companies are not excluded and can participate in financial support.

Furthermore, to expand the priority purchase of products from socially disadvantaged enterprises, the city has established a public procurement guideline and, for the first time nationwide, introduced the "Contract Controller" system to increase the public purchase rate of social economy enterprise products.

The Contract Controller system sets departmental targets and performance management for products from socially disadvantaged enterprises such as village enterprises, social cooperatives, self-support enterprises, production facilities for products by severely disabled persons, and women-owned enterprises, to prevent contract concentration on specific companies. It also expands the amount eligible for negotiated contracts to increase the purchase rate of these enterprises' products.

Once the COVID-19 situation stabilizes, the city plans to operate the "Jemulpo Market (Flea Market)" every Wednesday in connection with the Incheon Win-Win Distribution Support Center (1st floor of Jemulpo Station) and the Homeplus "Win-Win Market." In the second half of the year, special sales events for social economy enterprises will be held at the "e-eum Market" promoted by each military district and district to support companies whose sales have been impacted. Regular purchase consultation meetings for social economy enterprises will also be held targeting local public enterprises, corporations, and public institutions to actively support market development.

Moreover, the city plans to support the establishment of a comprehensive trading company for social economy enterprises, delegating market development-related projects to the trading company so that social economy enterprises can focus on product production, quality improvement, and expanding social value.

The Incheon Social Economy Support Center is also cooperating with the Incheon Design Center and the Incheon Design Enterprise Association to support 90% of project costs for brand and design development of social economy enterprises struggling due to COVID-19.

The center is operating a COVID-19 damage case reception and consultation window and is supporting companies facing difficulties by connecting them with field experts and mentors to find improvement measures.

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