Economic Sector: "Special Employment Insurance Legislation Must Reflect Characteristics of Workers"

Joint Opinion Submitted to the National Assembly by 14 Economic Organizations and Industry Associations Including the Korea Employers Federation

[Asia Economy Reporter Kim Ji-hee] The business community has argued that the government's legislative bill on 'Employment Insurance for Special-Type Workers' currently pending in the National Assembly should be designed and operated to reflect the unique characteristics of special-type workers, which differ from those of regular employees.

On the 22nd, 14 economic organizations and industry associations, including the Korea Employers Federation, announced that they submitted a joint opinion from the business community to the National Assembly on the 20th regarding the legislation on employment insurance for special-type workers. The related bill includes mandatory enrollment in employment insurance for special-type workers, delegation of the employer's employment insurance premium contribution level to presidential decree, eligibility for unemployment benefits in cases of voluntary resignation due to income reduction, and integrated financial management of employment insurance for both regular employees and special-type workers.

The business community pointed out, "Special-type workers are individual business operators who decide on the continuation of contracts such as joining and leaving by themselves, and labor mobility is active, making it difficult to establish the premise of employment insurance, which is 'involuntary unemployment.' Also, since business models, activity periods, and income levels vary greatly depending on the industry, it is not easy to apply a uniform employment insurance system."

Nevertheless, the business community claims that the current government bill pending in the National Assembly does not consider these characteristics and simply fits them into the framework of employment insurance for regular employees. First, the government bill stipulates mandatory enrollment without exception for special-type workers regardless of their consent. However, according to a survey by the Insurance Agency Association last October, only 22% of insurance planners who responded wished to enroll in employment insurance, while a high proportion chose 'granting enrollment choice (61.8%)' or 'opposing enrollment (14.9%).' Other countries operating employment insurance for non-wage workers, such as Germany and Spain, also adopt voluntary enrollment as a principle.

Concerns were also raised about delegating the employer's premium contribution ratio to enforcement ordinances and effectively considering a plan where employers and workers each bear half of the employment insurance premium. This equates employers with users in a general labor relationship, which is unfair, and delegating key matters that determine the employer's property rights and contract continuation to enforcement ordinances constitutes legislative inadequacy.

Additionally, by recognizing unemployment benefits for voluntary resignation due to income reduction, moral hazard may arise, such as special-type workers who can adjust their income repeatedly receiving unemployment benefits. Integrating the employment insurance finances of special-type workers and regular employees, whose working conditions, turnover rates, and eligibility for unemployment benefits differ significantly, will inevitably cause financial problems for employment insurance overall and conflicts among insured persons.

Furthermore, the government bill raises concerns that increasing the employer's employment insurance cost burden could negatively impact the labor market by triggering business model transitions and downsizing of subcontractors.

The Korea Employers Federation stated, "We agree on the necessity of employment insurance for special-type workers to strengthen the social safety net. However, since the related legal amendments must sufficiently reflect the characteristics of special-type workers and their intentions, we hope that the business community's suggestions will be thoroughly discussed during the legislative process in the National Assembly."

The submitted suggestions include ▲recognition of exceptions to the mandatory enrollment principle ▲legal specification that the employer's premium contribution ratio be 'up to one-third or less' ▲strengthening unemployment benefit eligibility requirements for special-type workers ▲separation of employment insurance finances between special-type workers and regular employees ▲gradual expansion of applicable industries through stakeholder consultation and social consensus ▲and establishment of income verification infrastructure to ensure financial stability and fairness.

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