The government will change the criteria for employment insurance from a focus on working hours to an income-based system. A new 'income aggregation system' will allow workers to combine earnings from multiple jobs to meet the insurance eligibility threshold, even if individual job earnings fall short.
The Ministry of Employment and Labor announced on July 10 that it will publicly announce a partial amendment to the Employment Insurance Act and the Act on the Collection of Employment and Industrial Accident Insurance Premiums for 40 days.
The income-based employment insurance reform aims to include part-time and multiple job workers in the safety net. As platform work, short-term employment, and multiple job holdings increase, relying solely on working hours to determine insurance eligibility could leave gaps in coverage.
To address this, the government will shift the eligibility criteria from working hours to income, linking it with income data from the National Tax Service. This will establish a foundation for applying employment insurance to all workers.
Initially, the eligibility threshold will change from the current requirement of working at least 60 hours per month (15 hours per week) to earning at least 800,000 won per month. This adjustment considers that the average monthly earnings for new insurance-eligible workers working 15 hours a week is 790,000 won, while the threshold for insurance eligibility is set at 800,000 won. Future adjustments will take into account inflation rates, wage increases, and the expansion of insurance coverage.
The new income aggregation system will also be established for workers with multiple jobs. If the earnings from individual jobs fall below 800,000 won, workers can still apply for insurance if their total earnings from all jobs exceed this amount.
The premium collection system will also be reformed. The current annual reporting of total earnings by employers will be abolished. Instead, employers will report monthly earnings to the Korea Workers' Compensation and Welfare Service or use income data reported to the National Tax Service as a substitute for monthly earnings reporting. The criteria for selecting priority support companies in the nonprofit sector will include a revenue cap of 60 billion won.
Meanwhile, Minister of Employment and Labor Kim Young-hoon visited the Korea Workers' Compensation and Welfare Service to review the progress of the income-based employment insurance initiative. Since March, the service has formed a dedicated task force to collaborate with the National Tax Service and other social insurance agencies to ensure the successful implementation of the income-based employment insurance.
In particular, a new process will be designed to match approximately 25.1 million income records from the National Tax Service with about 15.5 million employment insurance database entries to assess and calculate insurance premiums based on worker income. To support employers, enhancements will be made to the total service for employment and industrial accident insurance, including the development of a mobile app, activation of a one-click earnings service, and the establishment of a chatbot consultation system.
However, reducing administrative burdens is also crucial for successful implementation. During the meeting with Minister Kim, the labor union of the Korea Workers' Compensation and Welfare Service emphasized the need for sufficient staffing and budget, as well as improvements to restrictions on dual eligibility for employment insurance.
Minister Kim stated, "The income-based employment insurance represents the most significant turning point in the 30-year history of employment insurance in South Korea. We will ensure that all necessary measures, including infrastructure, are implemented without delay. This is the first step toward a 'universal employment insurance' that guarantees protection for all workers, and we will continue to expand the scope of insurance coverage."
* This article has been translated by AI.
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