"Employment Recovery Will Take Long"... '9 Million Won Per Person' Youth Employment Incentive Program Begins

Support from Employment Insurance Fund for up to 1 Year
Government Strengthens Support to Prepare for 'Jobless Growth'

In September of last year, amid the prolonged COVID-19 pandemic and ongoing job search difficulties, employment information was posted on the job board of a university in Seoul. Photo by Jinhyung Kang aymsdream@

[Sejong=Asia Economy Reporter Moon Chaeseok] The government is launching a policy that provides 750,000 KRW per month for one year from the Employment Insurance Fund to business owners who hire young people aged 15 to 34 as regular employees for more than six months. This decision is based on the expectation that so-called 'jobless growth' will continue for a long time, and the government believes it must focus support on young people, who are vulnerable in the labor market.

On the 13th, the Ministry of Employment and Labor announced that it will issue a public notice on the 14th to implement the 'Youth Employment Special Incentive' support project. This project, approved by the Cabinet meeting on the 18th of last month, provides wage subsidies to small and medium-sized enterprises (SMEs) and mid-sized companies that hire young people as regular employees. The funding comes from the Employment Insurance Fund. Kim Young-jung, Director of Employment Policy at the Ministry of Employment and Labor, emphasized, "It will take a considerable amount of time for youth employment, which has been severely contracted due to the impact of COVID-19, to fully recover. Therefore, it is necessary to strengthen government support."

The core of the policy is to support companies with up to 750,000 KRW per month for a maximum of one year, totaling up to 9 million KRW in wage subsidies. The incentive will be paid in earnest from the second week of next month after screening requirements such as employment retention and increase in the number of workers are met.

Support is provided to SMEs and mid-sized companies excluding gambling and entertainment businesses. Companies that employed five or more insured employees (regular workers) under employment insurance on average in the previous year are eligible. Companies that received the Youth Additional Employment Incentive, which ended on the 31st of last month, can also apply. However, there are conditions. The company must have hired young people aged 15 to 34 as regular employees between December 1 and 31 of last year and maintained their employment for more than six months. The total number of insured employees under employment insurance in the company must have increased compared to the previous year, as proof of employment retention.

This incentive will be paid twice in total, every six months. Companies must apply within three months from the first day of the month following the six-month employment retention period. For example, a company that hired a young person on January 15 must maintain employment until July 14 and apply between August 1 and October 31. Applications can be submitted through the Employment Insurance website starting at 9 a.m. on the 28th. If online application is difficult, companies can visit a nearby employment center on the same day and submit supporting documents such as monthly payroll and employment contracts. Detailed information can be found in the public notice on the Ministry of Employment and Labor’s website.

This incentive cannot be combined with similar incentives such as the Youth Digital Job Support Project, Youth Work Experience Support Project, and Special Employment Promotion Incentive. However, it can be received concurrently with the Youth Tomorrow Savings Program, which supports young people starting their careers in SMEs and mid-sized companies. Companies that hire young people who have participated in or completed the Work Experience Program under the National Employment Support System as regular employees are also eligible for this incentive.

Director Kim said, "I hope this incentive will serve as a 'catalyst' to encourage more young people to participate in the labor market and accelerate the gradually recovering youth employment."