Special Inspection from the 27th to February Next Year
Voluntary Reporting Reduction... 'Up to 30 Million KRW' Reward System
First-Time Offenders of Intentional Fraud Subject to 'Up to 5 Times' Recovery Amount
[Sejong=Asia Economy Reporter Moon Chaeseok] Amid a more than 14-fold surge in fraudulent claims for employment incentives over the past two years, the government has decided to conduct a special inspection until February next year.
The Ministry of Employment and Labor announced on the 26th that it plans to carry out a special inspection of fraudulent claims from the 27th until February 18th next year. According to the ministry, the amount of fraudulent claims, which was 800 million KRW in 2019, increased to 12.637 billion KRW as of July this year, a 14.5-fold rise. Even considering that the Employment Retention Subsidy increased from 66.9 billion KRW in 2019 to 934.9 billion KRW in August this year, and the Youth Additional Employment Incentive rose from 889.6 billion KRW to 1.395 trillion KRW, the increase is still significant.
Accordingly, the ministry has greatly expanded the scope of the inspection to include 14 major programs, including the Employment Retention Subsidy. This year’s inspection added programs such as the Employment Stability Incentive, Senior Incentive, and Regional Employment Promotion Subsidy. The number of inspection targets will increase from 7,491 last year to about 12,000 this year. Based on the characteristics of the incentives, the ministry plans to analyze employment insurance data to target suspicious types of fraudulent activities for pre-inspection.
If employers voluntarily report during the inspection period and it is verified that the fraudulent claims were due to simple errors, mitigation measures will be applied. The whistleblower reward system, which offers up to 30 million KRW in rewards, will also be actively utilized.
Conversely, intentional fraudulent claims will be strictly dealt with, even for first-time offenders, including imposing up to five times the additional collection amount and criminal penalties. The Employment Insurance Act was amended at the end of August last year to allow for imprisonment of up to three years or fines of up to 30 million KRW for detected fraudulent claimants. Conspiratorial fraudulent claims involving brokers are punishable by imprisonment of up to five years or fines of up to 50 million KRW.
Kim Youngjoong, Director of Employment Policy at the Ministry of Employment and Labor, said, "Along with market self-correction through voluntary reporting, we plan to strictly handle cases detected during the special inspection period. We will strengthen management of fraudulent claims to ensure that the precious insurance premiums of labor and management are used where they are truly needed."
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