FAQ

  • Subsidies For Employment Retention by the MOL
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  •          Dear HR managers,

    Thi  This is the National Labor Consultation Center,

           In order to help the companies facing economic crisis, the MOL provides employment retention subsidies as follows:

                       <MOLs subsidy systems For Employment Retention>

              It will become easier for small- and medium-sized subcontractors which inevitably have to cut their production capacity as their principal contractors halt production to overcome a temporary business crisis without job cuts.

      So far the Ministry of Labor has provided employment retention subsidies only when an increase in inventories, a fall,  in sales, etc, are found to have actually occurred.

      However, this guideline was revised to extend the scope of companies eligible for such subsidies to small- and medium-sized subcontractors that are expected to inevitably scale down production due to their principal contractors situations.

       Employment retention subsidy is provided to cover training costs and part of labor costs, if an employer who inevitably has to adjust employment due to production cuts, inventory increases, etc., retains his/her employees by means of temporary shutdown, vocational training, temporary suspension from work, etc., without job cuts. By doing so, the subsidy helps to ease burdens on companies facing a business crisis and prevent workers unemployment.

      So, by fully using restructuring-related subsidy systems, the company will minimize employment insecurity for workers and stabilize industrial relations in companies facing a business crisis.

              So the MOL recommends companies to make the best use of "employment retention subsidy" and "subsidy for training on paid leave" to ensure that temporary business crises should not lead to massive job cuts.

      Subsidy for training on paid leave is provided to cover training costs and part of wages, if an employer grants paid leave to his/her employees and provides vocational training during that leave.

      In particular, companies whose labor-management relations have worsened due to employment adjustment will be encouraged to consider employment retention subsidy and subsidy for training on paid leave as an alternative during labor-management dialogue.

      Attachment : Overview of MOLs subsidy systems relating to restructuring & Cases of workplace benefiting from employment retention subsidy.

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