(Un)Employment Insurance

by Gerald Staruiala , 18/06/2008

Many countries have unemployment insurance, but the Korean unemployment insurance has benefits that are unique and unknown to most Expats.

Employment Insurance Who Qualifies?
In principle, all workers who work more than 60 hours per month are eligible for Employment Insurance.  There are exceptions for some manual labor industries (farming, fishing and forestry) if the company has less than four employees or if working for a construction company that is engaged in small-scale projects of 20 Million Won or less.  Foreign workers without a residence permit are also not eligible for Employment Insurance.  Foreign workers who are working illegally in Korea do not have a residence permit.  If you have an Alien Registration number then you have a residence permit.

Foreign workers with a residence permit can be insured independently in Korea.  Companies with five or more employees must insure all workers, a company with fewer than five employees is not obligated to insure foreign workers.

Employment Insurance Reporting
Business owners must report to the Ministry of Labor and establish their Employment Insurance Policy registration within 14 days of the registration of the business and must terminate their policy with the Ministry of Labor within 14 days after the termination of business operations. When a company registers a new employee the must be registered with the Employment Security Office in their jurisdiction within 14 days of the first day of employment.  Likewise, an employer must report the termination of the employee to the Employment Security Office within 14 days of the last day of work of the employee.

Benefit Premiums
The benefits fall into two general categories and are calculated using different rates.  The fist category is Unemployment Benefits are they are calculated at a rate of 0.9% of the employee’s total annual wage of which both the employer and employee must pay 0.45% each.  The second category is described as Employment Security and Vocational Development and it is paid by the employer only.  The amount paid by the employer ranges from 0.25% (for a company with less then 150 employees) to 0.85% (for companies with more than 1,000 employees) and the percentage is applied to the year’s total wage of all employees.  The amount is estimated, paid to the Bank of Korea (or an authorized agent) and then adjusted at year’s end, so if the original amount is over paid then the employer will receive a refund with their next year’s amount also being adjusted.

Scope of the Employment Insurance Program
The Employment insurance projects are divided into unemployment benefits, employment security and vocation training projects.  The program is very comprehensive and benefits employers and employees alike.  Most employers fail to utilize the programs available to them and fail to benefit from subsidized labor and training programs offered by the Employment Insurance Program.

There is a deluge of programs available for Employees and Employers alike.  You may need help to sort through the programs and to maximize the benefits for your company or for yourself.  Many employers are not aware of the programs that benefit them or their employees.  The support for the development of Companies in Korea is there, it is the responsibility of the Company to find them and apply them.

For details on the specific programs go to http://www.korea4expats.com/article-employment-security-program-korea.html and http://www.korea4expats.com/article-unemployment-benefits-foreign-workers.html

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