"Special Employment Workers to Receive Unemployment Benefits... Government Re-pushes Legal Amendments to Address Blind Spots"

Ministry of Employment and Labor Announces Legislative Notice on Employment Insurance Act Amendments on the 8th
Employment Insurance Premiums to be Jointly Paid by Special Types of Workers and Employers
Unemployment Benefits to be Provided Even in Cases of Job Loss Due to Income Reduction

Asia Economy DB=Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kim Bo-kyung] The government has prepared a law to apply employment insurance to special-type workers (STWs) such as insurance planners, private tutors, and delivery drivers. STWs enrolled in employment insurance will be able to receive unemployment benefits if their income decreases or they lose their jobs. This can be seen as the starting point for the phased implementation of 'universal employment insurance.'

The Ministry of Employment and Labor announced the legislative notice on the 8th for amendments to the 'Employment Insurance Act' and the 'Act on the Collection of Employment Insurance and Industrial Accident Compensation Insurance Premiums,' which include measures to apply employment insurance to STWs. After going through legislative review procedures, the amendment bill is scheduled to be submitted to the National Assembly in September.

According to the main contents of the bill, STWs (labor providers) who provide labor for another person's business and enter into contracts to receive compensation from the business owner, etc., will be mandatorily covered by employment insurance. However, specific applicable STW occupations will be determined by presidential decree.

The acquisition and loss of insured status for STWs will be reported by the business owner. In the case of platform labor, the labor provision platform business owner will cooperate with the Korea Workers' Compensation and Welfare Service regarding insured person management and premium collection data.

Employment insurance premiums will be jointly borne by STWs and business owners. Specific unemployment benefit premium rates, etc., will be determined by presidential decree. Since employment stabilization and vocational skill development projects do not apply to STWs, only unemployment benefit premiums will be charged.

For STWs eligible for employment insurance, unemployment benefits and maternity benefits will be provided. To receive unemployment benefits, unemployed STWs must have paid premiums for at least 12 months out of the 24 months prior to the date of job separation. Additionally, they must not fall under disqualification reasons such as voluntary resignation.

Unlike regular workers, unemployment benefits can also be received in cases of job separation due to income reduction as defined by presidential decree.

Specific eligibility requirements and payment levels for maternity benefits will be determined by presidential decree.

[Image source=Yonhap News]

In addition to applying employment insurance to STWs, this amendment bill includes provisions to guarantee maternity leave benefits for fixed-term and dispatched workers and to reduce industrial accident insurance premiums for STWs.

Currently, fixed-term and dispatched workers face issues where their employment relationship ends if their contract expires during maternity leave, even if the statutory leave period remains, preventing them from receiving maternity leave benefits.

Therefore, if fixed-term or dispatched workers’ contracts expire during maternity leave, payment of statutory maternity leave benefits for the remaining leave period will be guaranteed regardless of company size.

Also, for STWs covered by industrial accident insurance, a new legal basis will be established to reduce industrial accident insurance premiums for certain occupations determined by presidential decree, considering accident rates, etc.

Deputy Minister of Employment and Labor Lim Seo-jung stated, "We expect this legislation to further strengthen the employment safety net for STWs who are struggling due to COVID-19," adding, "By the end of this year, we plan to establish a roadmap to eliminate blind spots in employment insurance and gradually expand the coverage for universal employment insurance."

He continued, "We will collect and review stakeholders' opinions during the legislative notice period," and "We will thoroughly prepare the procedures after the notice and actively support the National Assembly's legislation."

Meanwhile, although a bill to apply employment insurance to STWs and artists was submitted to the National Assembly as a member's bill in November 2018, only the section related to artists' employment insurance was passed by the National Assembly in May. Therefore, the government is re-pushing the amendment bill to apply employment insurance to STWs, who remain in the blind spots of employment insurance, as a government bill.