Government to Lend for COVID-19 Related Leave and Suspension Allowances... Loan Program with 100 Million KRW Limit
[Asia Economy Reporter Kim Bo-kyung] In response to the impact of the novel coronavirus infection (COVID-19), the government will provide loan support up to 100 million KRW for small and medium-sized enterprises (SMEs) that are unable to pay even leave and furlough allowances. Employers can use the loan support to pay allowances to employees and then repay the loan amount with employment retention subsidies.
The Ministry of Employment and Labor and the Korea Workers' Compensation and Welfare Service announced on the 30th that they will implement a loan program for employment retention costs for SMEs facing temporary financial difficulties due to management challenges.
This program lends funds to employers struggling to pay leave and furlough allowances and allows them to repay the loan amount with employment retention subsidies provided after the leave or furlough is implemented, thereby reducing the burden on employers and strengthening job security for workers.
The support targets priority support enterprises that report employment retention plans to the Employment Center of the Ministry of Employment and Labor and implement leave or furlough after July 1. Loans can be received per installment with a minimum of 1 million KRW and a maximum limit of 100 million KRW per company, at an annual interest rate of 1.5% (one-year grace period with lump-sum repayment).
Employers wishing to apply for the loan can visit the Korea Workers' Compensation and Welfare Service branch office in charge of their workplace location or apply online through the Workers' Welfare Service website (http://welfare.kcomwel.or.kr). The application period is from the 3rd of next month to December 15.
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Kim Young-jung, Director of Labor Market Policy at the Ministry of Employment and Labor, stated, "We expect this to help companies striving to maintain employment despite the difficult employment situation caused by the ongoing COVID-19 pandemic," adding, "Since there have been many demands for advance payment of leave and furlough allowances, we will make efforts to ensure this loan program is effectively implemented in the field."
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