Hankyung Research Institute: "Mandatory Employment Insurance for Special Type Workers... Increased Burden on Employers"

Increase in Labor Costs and Deterioration of Unemployment Benefit Financial Balance
"A Dedicated Employment Insurance System Must Be Established"

[Asia Economy Reporter Dongwoo Lee] Concerns have been raised that the government's legislative notice to expand employment insurance for workers in special types of employment (teukgo) could exacerbate business owners' cost burdens and management difficulties. Amid a surge in unemployment benefit claims due to the COVID-19 pandemic this year, critics argue that the proposed notice could further deteriorate the employment insurance fund.

On the 28th, the Korea Economic Research Institute (KERI) announced that it submitted an opinion letter regarding the 'Employment Insurance Act and Insurance Premium Collection Act Legislative Notice' to the Ministry of Employment and Labor. In the letter, KERI introduced six key issues: the worker status of teukgo who are subject to insurance expansion, the method of applying employment insurance, the financial balance of unemployment benefits, the burden ratio of employment insurance premiums, eligibility for employment insurance benefits, and the management of insured persons by business owners.

KERI argued that since teukgo have low worker status, it is necessary to establish a dedicated employment insurance system that separates the unemployment benefit accounts of wage workers and teukgo. They explained that mandating employment insurance for teukgo with strong user characteristics fundamentally contradicts the purpose of the system.

They also advocated that the application of employment insurance for teukgo should be voluntary. Citing the current Employment Insurance Act, which allows self-employed individuals to join employment insurance at their discretion, KERI emphasized that teukgo should also be allowed to choose whether to enroll through a voluntary subscription system.

Concerns were expressed that the passage of the legislative bill could lead to financial losses in unemployment benefits and job reductions due to increased cost burdens on business owners. They noted that the unemployment benefit fund has been in deficit for the past two years and that the active nature of teukgo could worsen the financial situation.

Therefore, KERI stressed the need to increase the employment insurance premium burden ratio for teukgo. Unlike wage workers, teukgo maintain a horizontal delegation relationship with business owners and perform tasks independently, so it is reasonable for them to bear responsibility for unemployment themselves, KERI argued.

Additionally, the option to exclude 'job changes due to income reduction' from unemployment benefit eligibility and from the management of insured persons by business owners for teukgo was proposed. They expressed concern that teukgo face difficulties in management due to fluctuations in work schedules or hours and changes in main clients compared to regular workers, which would inevitably increase administrative burdens on business owners.

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