'Special Employment Insurance' Approved at Cabinet Meeting... KCCI "Employer Requests Not Reflected... Regret"

"Key Issues Such as Easing Mandatory Enrollment Requirements and Differentiating Employment Insurance Contribution Rates Not Reflected"

[Asia Economy Reporter Kim Ji-hee] The business community expressed regret over the passage of a bill at the Cabinet meeting to apply employment insurance to workers in special employment types (teukso hyeongtae geunrosangsa, or teukgo).

On the 8th, the Korea Employers Federation (KEF) stated in a press release, "The government proposal, which did not reflect any of the key issues repeatedly requested by the business community and employers of teukgo occupations?such as easing the mandatory enrollment requirements and differentiating the employment insurance premium contribution rates?was approved at the Cabinet meeting today," adding, "This is a regrettable position." Earlier that day, the Cabinet approved amendments to the Employment Insurance Act, including the mandatory application of employment insurance for special employment workers.

The KEF criticized, "Based on the 'Social Agreement to Overcome the COVID-19 Crisis' signed on July 28, we have appealed to the Ministry of Employment and Labor, the Regulatory Reform Committee, and the Economic, Social and Labor Council to prepare employment insurance legislation that considers the characteristics of teukgo. However, the government proposal passed the Cabinet meeting as originally announced without any changes," adding, "This is the government itself, which should exemplary implement the social agreement among labor, management, and government, undermining public trust and the binding force of the social agreement."

They continued, "Unlike general workers, teukgo are non-wage workers with strong autonomy over decisions such as contracts and work performance with the contracting business owner, as well as job changes and career transitions, acting as independent entrusted contractors within their business model," emphasizing, "Employment insurance for teukgo, by its nature, is globally standard to operate on a voluntary enrollment basis among teukgo and with a system where they bear the full insurance premium."

Furthermore, the KEF stated, "The business community recognizes the necessity of introducing employment insurance for teukgo in the context of overcoming the COVID-19 crisis and establishing a nationwide employment safety net, and is willing to participate to a certain extent if the employment insurance system is properly considered," but argued, "Nevertheless, the government is designing the system with the intention of imposing the same level of burden on teukgo employers as on employers of general workers." The KEF pointed out that this attempts to force a burden on employers that violates the principles of proportionality and prohibition of excessiveness.

The KEF emphasized, "The government’s stance is to avoid the issue of differentiating premium contribution rates between employers and teukgo in legislation and instead regulate it in enforcement ordinances to be decided by the Employment Insurance Committee. However, since this contribution rate concerns employers' property rights, responsibilities, and obligations, regulating it through enforcement ordinances itself is a legislative deficiency."

They added, "Considering that the Employment Insurance Committee is dominated by pro-labor members, there is a concern that the contribution rate will ultimately not be differentiated and will be decided as a 50-50 split, the same as for general workers," and stated, "Therefore, the differentiation of employment insurance contribution rates should be clearly stipulated in legislation so that employers bear a significantly lower share compared to teukgo."

Additionally, the KEF conveyed that easing the mandatory enrollment requirements for teukgo is necessary to alleviate opposition from special employment workers toward employment insurance and to enhance the completeness of the system. They also emphasized that high-income teukgo who do not benefit from protection through employment insurance should be excluded.

The business community said, "We plan to respond jointly so that these positions can be reflected in the future legislative process in the National Assembly," and added, "The government should also design and operate laws and systems suited to the characteristics of teukgo to increase public acceptance of the employment insurance system introduction and minimize shocks to the teukgo market and negative impacts on employment."

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