Couple Simultaneous Parental Leave Pay... Up to 15 Million KRW for the First 3 Months

3+3 Parental Leave System Introduced

'2.4 Million KRW Per Person' Senior Employment Incentive Established

Quick Service and Substitute Driver Employment Insurance Applied from Next Year

[Sejong=Asia Economy Reporter Moon Chaeseok] Starting next year, the income replacement rate for parental leave benefits will increase, and the father’s parental leave system will be consolidated into the '3+3 Parental Leave System.' Couples with children under 12 months old who take parental leave will receive up to 15 million KRW for the first three months.

A new Elderly Employment Incentive Program will be implemented next year, providing small and medium-sized enterprises that increase employment of seniors aged 60 or older compared to the previous three years with 300,000 KRW quarterly per person for up to two years. This means up to 2.4 million KRW per person over two years for hiring workers aged 60 or above.

Additionally, quick service workers (including delivery workers) and designated driver workers will be covered by employment insurance. From July 1 next year, the employment insurance premium rate for those eligible for unemployment benefits will increase by 0.2 percentage points (p).

The Ministry of Employment and Labor announced on the 30th that it will publicly notify the partial amendments to the subordinate statutes of the 'Employment Insurance Act' and the 'Act on Collection of Employment Insurance and Industrial Accident Compensation Insurance Premiums' until November 9.

Parental Leave Support System Reorganized into '3+3 Parental Leave System'

Source=Ministry of Employment and Labor

The benefits for using parental leave before the child reaches 12 months of age will be expanded to encourage the use of parental leave. The parental leave system allows workers with children aged 8 or younger or in the second grade of elementary school or below to apply for parental leave, which employers grant for up to one year. The system is being revised to encourage parents with infants under 12 months old to take parental leave.

When both parents take parental leave, the parental leave pay for the first three months will increase from 80% to 100% of the ordinary wage. Previously, only the first parent taking parental leave received 80% of the ordinary wage, but now both parents will receive 100% of the ordinary wage.

For example, if a father and mother with a child under 12 months old take parental leave together, in the first month, each parent will receive 100% of parental leave pay up to a monthly limit of 2 million KRW. This means a total of up to 4 million KRW. In the second month, the monthly cap rises to 2.5 million KRW, and in the third month, it becomes 3 million KRW. In other words, couples can receive up to 15 million KRW combined over three months.

For the remaining nine months, 80% of the ordinary wage will be paid up to a monthly limit of 1.5 million KRW. Currently, only 50% of the ordinary wage is paid up to a monthly limit of 1.2 million KRW. In conclusion, workers earning more than 3 million KRW monthly who both take parental leave will each receive 21 million KRW annually in parental leave pay. The total annual parental leave pay for both parents will be 42 million KRW.

Furthermore, the income replacement rate for parental leave benefits will also increase. For parents with children under 12 months old, support will be up to 80% (with a cap of 1.5 million KRW per month) when the child is between 4 and 12 months old. Previously, only up to 80% of the ordinary wage (cap 1.5 million KRW) was supported for the first three months of parental leave, and only 50% was paid from the fourth to the twelfth month. Additionally, single-parent workers will see their parental leave pay for months 7 to 12 increase from 50% to 80% of the ordinary wage (cap 1.5 million KRW).

A new parental leave support fund will also be established. Employers of priority support target companies who allow workers to take parental leave will receive 300,000 KRW monthly. If parental leave is allowed for three months or more for children under 12 months, the support for the first three months will be significantly increased to 2 million KRW per month.

New Elderly Employment Incentive of up to 2.4 million KRW per Person

A new elderly employment incentive of up to 2.4 million KRW per person will be introduced. Currently, the 'Elderly Continuous Employment Incentive' does not cover workplaces without a retirement age system or cases where seniors aged 60 or older are newly hired. Starting January 1 next year, if the number of workers aged 60 or older employed by an employer increases beyond a certain standard set by the Minister of Employment and Labor, the employer will receive partial support for the associated costs through the new elderly employment incentive.

For example, if Company A employed 100 workers aged 60 or older over the past three years and next year the number increases to 105, the employer will receive 2.4 million KRW per person for the 5 additional workers, totaling 12 million KRW. Although the elderly continuous employment incentive is currently in operation, this new policy aims to encourage hiring elderly workers by covering workplaces without retirement age systems and new hires aged 60 or older, who were previously excluded.

Employment Insurance Coverage Extended to Quick Service and Designated Driver Workers

The government added 12 types of special employment workers (SEWs), including insurance planners, to the employment insurance system starting July 1. From January 1 next year, quick service workers and designated driver workers will also be included. Platform operators are required to report the employment insurance eligibility of labor providers, withhold insurance premiums, and fulfill other obligations.

Platform operators must report the acquisition and loss of insured status of labor providers by the 15th of the month following the occurrence of such events. For short-term labor providers, submitting a 'Labor Provision Confirmation Report' will be considered as notification. The law specifies that employers and labor providers must withhold and pay insurance premiums monthly. Additionally, upon request by the Minister of Employment and Labor, platform operators must provide information or data such as the start or end date of labor provision contracts, job types, and monthly wages.

Employment Insurance Premium Rate Raised from 1.6% to 1.8%; SEWs and Artists from 1.4% to 1.6%

The employment insurance premium rate for the unemployment benefits account will also increase. This is to restore the financial soundness of the employment insurance fund, which deteriorated due to increased expenditures on employment retention and job-seeking benefits during the COVID-19 crisis.

Accordingly, the employment insurance premium rate for workers will rise from 1.6% to 1.8%, and for artists and labor providers (SEWs), the rate will increase from 1.4% to 1.6%.

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