Mandatory Employment Insurance for Self-Employed? ... Initial Government Burden Inevitable

Balance of Employment Insurance Fund, 9 Trillion Won in 2018 → 7 Trillion Won in 2019

On the 14th, when the emergency disaster relief fund application was underway, a notice informing the use of the relief fund was posted at a store located in Namdaemun Market, Jung-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Jang Sehee] As the government announced plans to gradually implement nationwide employment insurance, the application of employment insurance to self-employed individuals is also expected to be gradually expanded through social consensus. However, it is pointed out that initial government support is inevitable to encourage self-employed individuals to enroll.

According to the Blue House and related ministries including the Ministry of Employment and Labor, Ministry of Strategy and Finance, and Ministry of Health and Welfare on the 17th, the government plans to promote the expansion of employment insurance after additional discussions on income assessment and collection system reform for the self-employed. The government intends to first gather opinions from stakeholders, including the self-employed, to minimize opposition.

Earlier, Kwon Ki-seop, Director of Employment Policy at the Ministry of Employment and Labor, stated, "In the case of the self-employed, after discussing preconditions such as income assessment systems and collection system reforms, we plan to proceed step-by-step through social consensus."

However, even if they become mandatory subscribers to employment insurance, there are concerns that they may hesitate to enroll due to the burden of insurance premiums, leading to calls for government support of premiums in the initial stages.

In fact, Kim Yong-gi, Vice Chairman of the Presidential Committee on Jobs, said at a press briefing on the 14th, "For a nationwide employment insurance system, self-employed individuals must be encouraged to voluntarily enroll," adding, "If their income is below a certain level, the government will have no choice but to bear at least a minimal portion of the employment insurance premiums." This indicates that incentives from the government are necessary for the self-employed to join employment insurance.

In response, Professor Ha Jun-kyung of Hanyang University’s Department of Economics advised, "If employment insurance is expanded nationwide, its public nature will be stronger, and the government will inevitably have to bear part of the cost," recommending that insurance premiums be recalculated considering employment types (regular and irregular workers), income, and the burden on vulnerable groups.

The depletion of the employment insurance fund is also a concern. The balance of the employment insurance fund decreased from 9 trillion won in 2018 to 7 trillion won in 2019. To reduce the overall government burden, an increase in employment insurance premiums seems inevitable.

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