Government Considers Increasing Employment Retention Subsidy... Will It Reach 100% of Suspension Pay?

Employment Retention Costs More Productive Than Welfare Investment
Likely to Include Large Corporations Such as Airlines and Duty-Free Shops

On the 10th, unemployment benefit applicants are receiving explanations from officials at the Unemployment Benefit Briefing Session held at the Western Employment Welfare Plus Center in Mapo-gu, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporters Joo Sang-don, Kim Bo-kyung, Jang Se-hee] As the unemployment crisis becomes a reality due to the shock of the novel coronavirus infection (COVID-19), the government is considering raising the level of support for the Employment Retention Subsidy once again. It is also contemplating adding the aviation and duty-free shop industries, which are experiencing difficulties, to the special employment support sectors.

On the 14th, a senior government official stated, "We are discussing ways to increase the Employment Retention Subsidy and plan to announce it through inter-ministerial consultations." In this regard, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is reported to have chaired a closed-door meeting this morning to discuss employment measures centered on this issue.

The Employment Retention Subsidy is a system where the government supports part of the labor costs to employers who make efforts to retain employment through paid leave or business suspension despite management difficulties. Initially, 75% of the suspension allowance was supported, but at the end of last month, it was decided for the first time ever to increase this to 90% for all industries. If the government raises the support level again, it could be expanded up to 100%. The government is also considering designating aviation ground handling and duty-free shop industries as special employment support sectors and expanding direct job support to provide new jobs.

Along with this, the government is preparing support measures for special-type workers such as private tutors and insurance planners, who are in the blind spots of employment insurance, as well as freelancers like health club instructors and cultural and artistic workers. The plan is to either enroll those not covered by employment insurance or provide support equivalent to employment insurance instead of enrollment. Government employment measures, including the Employment Retention Subsidy, are expected to be discussed and finalized at the 5th Emergency Economic Meeting scheduled for next week.

Yesterday, President Moon Jae-in said, "Money spent on employment retention is not wasted. Considering the welfare costs that would be incurred if jobs are lost, it is rather a productive investment that reduces costs and prepares for the future," urging for drastic employment measures.

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