Despite Criticism That "Unemployment Benefits for Special Employment Workers Have Many Issues"... Ministry of Employment Stands Firm

Mandatory Enrollment Law for Special Employment Insurance Approved at Cabinet Meeting
No Reflection of Business Community's Requests..."Processing to be Promoted Within This Year"
Challenges Expected from the Start of 'Universal Employment Insurance' Introduction

Asia Economy DB=Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kim Bo-kyung] The 'Employment Insurance Act Amendment,' which mandates the enrollment of special-type workers (STWs) such as insurance planners and substitute drivers in employment insurance, will be submitted to the National Assembly this week. However, controversy is expected as the government is pushing forward with the legislation without reflecting the opinions of the business community.

On the 8th, the government deliberated and approved amendments to the 'Employment Insurance Act' and the 'Act on Collection of Employment and Industrial Accident Insurance Premiums,' which fall under the jurisdiction of the Ministry of Employment and Labor, at the Cabinet meeting. The amendments primarily require STWs to be automatically enrolled in employment insurance and provide unemployment benefits to involuntarily unemployed individuals who have paid premiums for at least 12 months out of the previous 24 months before unemployment. Only the section regarding the application of employment insurance to artists passed in the 20th National Assembly, and the bill is being reintroduced in the 21st National Assembly. Kwon Ki-seop, Director of Employment Policy at the Ministry of Employment and Labor, stated, "The amendment bill is scheduled to be submitted to the National Assembly this week," adding, "We will support the legislation so that the bill can be processed within this year."

The enrollment of STWs in employment insurance is the first step toward the government's initiative to introduce an 'employment insurance system for all citizens.' The government's goal is to enroll all workers in employment insurance by 2025 to eliminate blind spots. However, the process is not smooth from the start, as the business community has clearly opposed some parts of the STW employment insurance law. The Ministry of Employment and Labor received opinions from business organizations such as the Korea Employers Federation, the Korea Federation of Small and Medium Business, and the Korea Federation of Medium-sized Enterprises, but did not reflect these in the bill and approved it at the Cabinet meeting as originally announced.

On the 22nd, when the government began accepting offline applications for the 'COVID-19 Emergency Employment Stability Support Fund,' which provides 1.5 million KRW per person to special employment workers (such as private tutors) struggling due to the COVID-19 pandemic, freelancers, small business owners, and unpaid leave workers, citizens were submitting their applications in person at the Employment Welfare Plus Center in Jung-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

Regarding key issues, the business community opposes the 50-50 contribution ratio between employers and STWs for employment insurance premiums, which is the same as for regular employees. They argue that since STWs differ from regular employees in contracts, work, and income types and have characteristics similar to 'business partners' and self-employed individuals, the employer's contribution rate should be reduced to about one-third. A Ministry of Employment and Labor official stated, "Details such as premium rates and eligible occupations will be determined in the enforcement decree," adding, "Enforcement decrees and rules will be prepared after the law passes."

The business community also suggested that broad exceptions should be recognized for mandatory enrollment. They pointed out that STWs have strong independence and individuality compared to regular employees, making uniform regulation difficult, and that countries like Spain and Italy operate on a voluntary enrollment basis. They especially argued that high-income STWs with low social protection needs should be excluded from the enrollment target. The Ministry of Employment and Labor holds a firm stance on this. To preserve the purpose and effectiveness of the system, STWs must be automatically enrolled without exceptions. A ministry official explained, "The amended bill does not allow for exemption applications," adding, "In the case of industrial accident insurance for STWs, exemption applications are allowed, but only 16% are enrolled."

The business community also proposed that the employment insurance finances for STWs and regular employees should be managed through separate accounts. They expressed concerns that integrating premium income and unemployment benefit expenditures for both groups amid a two-year deficit in the employment insurance fund could cause financial issues and conflicts among insured persons. In response, Director Kwon firmly stated, "Although employment insurance coverage has been expanded by workplace size and for daily workers, accounts have not been separated each time, so there is no plan to separate accounts now." He added, "We have not found cases in other countries where only STWs are managed through separate accounts."

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