'Boss, Must Read!'... Support Funds Steadily Received When Employees Take Parental Leave [K Population Strategy]

(35) Family-Friendly Company Benefits
Support Funds Provided from Parental Leave to Flexible Work
Up to 20 Million Won for Necessary Infrastructure

Editor's NoteThe key to solving South Korea's population problem lies within companies. A workplace culture that evaluates employees based on their work regardless of gender and a family-friendly culture are crucial to addressing the K-population issue. Although low birth rates are influenced by multiple factors, it is important to ensure that workplace burdens do not become obstacles that make people hesitate to have children. Asia Economy visits companies leading family-friendly policies to identify the factors that helped these systems stabilize, and plans to explore various solutions with companies that face practical challenges. Through this, we encourage change starting from companies and analyze the government's role in enabling this. We listen to voices emphasizing that company culture and atmosphere that reduce psychological burdens are more important than financial support, and propose alternatives from various perspectives.

"When an employee takes parental leave, not only the employee but also the company receives government subsidies."

Small and medium-sized enterprises (SMEs) and mid-sized companies that have introduced work-family balance systems receive various benefits from the government. Most of these come in the form of subsidies, including costs for system implementation, incentives for system stabilization and smooth utilization, among others. Once the system is somewhat established, companies can enjoy benefits such as preferential interest rates when borrowing money through the Ministry of Gender Equality and Family’s family-friendly certification. However, many SMEs are unaware of these systems and thus fail to utilize them. The government plans to strengthen the system this year and also focus on expanding practical use by companies.

When SMEs and mid-sized companies utilize flexible work arrangements, they can receive incentives from the Ministry of Employment and Labor. To qualify, companies must implement at least one of the following systems: selective work hours, telecommuting, remote work, or staggered commuting hours. Working conditions must be between 35 and 40 hours per week, and the system implementation must be specified in the employment contract. Telecommuting, remote work, and staggered commuting must be used at least 6 days per month. For selective work hours, working hours must be reduced by at least 6 hours per month and at least 1 hour on shortened workdays to be recognized.

The maximum subsidy an SME can receive is 3.6 million KRW per person per year. For telecommuting and remote work, if used 6 to 11 days, the subsidy is 150,000 KRW, and if used 12 days or more, it is 300,000 KRW. For staggered commuting, the subsidy is 100,000 KRW and 200,000 KRW respectively under the same criteria. Selective work hours receive a flat subsidy of 300,000 KRW regardless of usage days. Additionally, telecommuting, remote work, and selective work hours for employees with children in childcare receive an extra 100,000 KRW per month.

Support for Infrastructure Too... Let's Create Family-Friendly Management

Companies can also receive reimbursement for costs needed to implement flexible work systems. By submitting a business plan to the employment center and undergoing review and approval, companies can receive up to 2.5 million KRW covering 70% of software investment costs such as attendance management systems, company-exclusive messengers, and servers. Telecommuting and remote work companies also receive support for security system investments such as remote access, data leakage prevention, and data backup. The support amount ranges from 50% to 80% of investment costs, up to a maximum of 20 million KRW.

If an employer uses these systems to reduce the working hours of full-time employees, they receive the "Work-Life Balance Job Incentive." However, the system must be reflected in employment rules and personnel regulations, and the reduction in working hours must actually be utilized for at least one month due to employee needs such as family care or personal health. Reduced working hours must be between 15 and 30 hours per week. The subsidy is up to 300,000 KRW per month per reduced-hour employee. Additionally, a wage reduction compensation subsidy of up to 200,000 KRW is provided separately.

Companies can also receive subsidies if their employees take parental leave or reduce working hours for childcare for 30 days or more. If an employee with a child under 12 months takes parental leave, the company receives 2 million KRW for the first three months and 300,000 KRW monthly thereafter, totaling 8.7 million KRW annually. For employees with children over 12 months, the monthly subsidy remains 300,000 KRW but the annual total decreases to 3.6 million KRW. The subsidy for reduced working hours during childcare is also 300,000 KRW monthly and 3.6 million KRW annually. However, if the employer allows the reduction for the first time, an additional 100,000 KRW per month is granted, increasing the annual total subsidy to 4.8 million KRW.

Special Coverage Team 'K-Population Strategy - Gender Equality is the Answer'

Reporters Yuri Kim, Hyunju Lee, Hyunjin Jung, Aeri Bu, Byungseon Gong, Juni Park, Seungseop Song
Economic and Financial Editor Pilsoo Kim

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