Flood of Insurance Labor Issues... Mandatory Employment Insurance for Agents and Legalization of Labor Unions (Comprehensive)

Government Submits Bill to Mandate Employment Insurance Enrollment for Special Employment Workers
National Insurance Agents Union Files Union Establishment Report with Ministry of Employment

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] The insurance industry is grappling with labor issues that have recently become a hot topic. During this regular session of the National Assembly, following the push for 'universal employment insurance' including special employment types such as insurance planners in response to the COVID-19 pandemic, demands have also emerged to guarantee the three labor rights (the right to organize, collective bargaining, and collective action) for planners.

According to the insurance industry on the 5th, the likelihood of passing a bill in this regular session that allows 'special employment workers' such as insurance planners, golf course caddies, and substitute drivers to receive employment insurance benefits when they lose their jobs is increasing.

On the 11th of last month, the government submitted amendments to the 'Employment Insurance Act' and the 'Act on the Collection of Employment Insurance and Industrial Accident Compensation Insurance Premiums' to the National Assembly, mandating employment insurance enrollment for special employment workers.

Despite concerns that individuals may hesitate to enroll in employment insurance due to exposure of their income or premium burdens, and worries that employers might reduce jobs, the ruling Democratic Party is firmly committed to passing the special employment workers' employment insurance law within this regular session.

The insurance industry voices strong concerns about the mandatory employment insurance. Even among the planners, who are the subjects of the insurance, opinions are divided, and there are calls for discussions on alternatives such as optional enrollment or adjusting the premium burden ratio.

The "Tripartite Agreement Ceremony for Overcoming the COVID-19 Crisis," which was scheduled to be held on the 1st at the Prime Minister's Official Residence in Jongno-gu, Seoul, was canceled due to the last-minute absence of the Korean Confederation of Trade Unions (KCTU). The tripartite parties were originally scheduled to sign an agreement that included strengthening employment retention and introducing nationwide employment insurance. The KCTU held a Central Executive Committee meeting from the morning to discuss whether to sign the agreement but ultimately decided not to participate in the ceremony. The photo shows attendees, excluding Kim Myung-hwan, the KCTU chairman, engaging in conversation that day. Photo by Kim Hyun-min kimhyun81@

The number of planners working in the domestic insurance industry is estimated to be around 400,000, and if employment insurance is applied to them, the annual employment insurance premium burden is expected to reach around 100 billion KRW.

The issue is that this mandatory employment insurance will mark a turning point in the insurance industry’s recognition of planners as workers for the first time. This is expected to intensify pressure regarding the 'three labor rights,' which have not been traditionally recognized in the insurance industry.

National Insurance Planners Union Has Not Received Union Establishment Certificate for Over a Year

Planners have been predominantly viewed as independent contractors rather than employees because they have freedom in commuting and operate independently. Accordingly, while they are classified as special employment workers and receive industrial accident insurance under the Industrial Accident Compensation Insurance Act, they have not been recognized as workers under the Labor Standards Act or the Trade Union and Labor Relations Adjustment Act.

In particular, planners have been denied union establishment registration because they are 'non-exclusive' workers who receive assignments from multiple insurance companies.

The National Insurance Planners Labor Union, affiliated with the Korean Confederation of Trade Unions, submitted a union establishment report to the Ministry of Employment and Labor in September last year but has not received the union establishment certificate for over a year.

Oh Se-jung, chairman of the Insurance Planners Union, stated, “The government promised to guarantee the three labor rights for special employment workers, and both the National Human Rights Commission and the International Labour Organization (ILO) have recommended legislation recognizing worker status, but progress has not been made,” adding, “The planners’ union is necessary as a protective measure to respond to unfair company practices.”

With recent increases in the legalization of special employment workers’ unions such as substitute drivers and after-school instructors, there is speculation that demands for the legalization of planners’ unions may be accepted. However, the insurance industry fears negative impacts such as restructuring if employment insurance becomes mandatory or unions are legalized.

An insurance industry official said, “While we can understand the mandatory employment insurance as a way to expand the social safety net to some extent, recognizing the three labor rights for planners, who operate as independent contractors, is excessive,” expressing concern.

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