Seoul City Fully Supports National Pension and Health Insurance for Construction Workers... Up to 28% Wage Increase Effect

80,000 Jobs Innovation at Publicly Commissioned Construction Sites
Mayor Park Won-soon: "Nationwide Employment Insurance and Social Safety Nets Are Essential"

[Asia Economy Reporter Jo In-kyung] To significantly increase the social insurance enrollment rate of construction workers, which remains in the low 20% range, Seoul City has decided to fully cover the 7.8% social insurance (National Pension and Health Insurance) contributions previously deducted from workers' wages, becoming the first in the nation to do so.

On the 28th, Mayor Park Won-soon held a press conference to announce the 'Construction Job Innovation' plan centered on this policy, stating that it will be first applied to public construction projects commissioned by the city within the year and will be expanded to the private sector.

Mayor Park explained, "Construction jobs are representative of poor employment structures and labor environments, yet they have a significant employment inducement effect. This initiative will transform approximately 80,000 construction jobs at Seoul City public construction sites into quality jobs and serve as the first step in strengthening the employment safety net in the post-COVID-19 era."

The city will first fully support the social insurance premiums of about 7.8% (National Pension 4.5%, Health Insurance 3.335%) that construction workers had been responsible for. Currently, the social insurance enrollment rate among construction workers remains low even compared to other non-regular workers, at just over 20% (National Pension 22.2%, Health Insurance 20.8%).

Workers will also receive the 'weekly holiday allowance' equivalent to one day's wage if they work five days a week. As a prerequisite for this, the city will ban the use of comprehensive wage systems and mandate the use of a 'standard employment contract' that clearly separates base salary and weekly holiday allowance. Through this, the goal is to increase long-term employment for construction workers and shift wage payments from the current 'daily wage' system to a 'weekly wage' system.

To encourage construction workers to work longer at a single site, the city will actively provide weekly holiday allowances and social insurance premiums, and offer employment improvement incentives to companies where the proportion of domestic workers exceeds 90%.

Since currently only about 25% of construction workers are eligible for weekly holiday allowances, the city expects that employment improvement incentives for companies will be an important premise to ensure the effectiveness of weekly holiday allowances and social insurance in encouraging daily workers to remain longer at a single site.

Once the announced construction job innovation plan is implemented, individual construction workers are expected to see a wage increase effect of up to 28%.

Mayor Park stated, "To turn crisis into opportunity, expanding social safety nets such as 'universal employment insurance' is essential, and fully supporting social insurance premiums for construction workers is one such measure. We will transform the vicious cycle where short-term employment excluded from social security systems weakens construction competitiveness into a virtuous cycle where new skilled workers enter and good jobs are created."

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