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Cabinet approves three presidential decree amendment bills, including bill to amend the Enforcement Decree of the Employment Insurance Act

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Dec. 19, 2017

 

① (The Enforcement Decree of the Employment Insurance Act) Benefits for working time reduction during the child-rearing period will be increased beginning in 2018.

 

② (The Enforcement Decree of the Industrial Accident Compensation Insurance Act) Even accidents that occur while the worker deviates from his/her commuting route or interrupts his/her commuting journey will be recognized as work-related if the deviation or interruption is made to perform the activities necessary for daily life, such as doing the school run for his/her children.

 

③ (The Enforcement Decree of the Act on the Collection, etc., of Premiums for Employment Insurance and Industrial Accident Compensation Insurance) The differential discount rates between large companies and SMEs under the merit rating system will be abolished to get rid of the unequal premium discounting that favors large companies.

 

At a cabinet meeting on December 19th (Tue.) the government deliberated and decided on MOEL's three presidential decree amendment bills*, including a bill to amend the Enforcement Decree of the Employment Insurance Act which would raise the level of benefits for working time reduction during the child-rearing period. The main contents of the bills are as follows.

 

* amendments to the Enforcement Decree of the Employment Insurance Act, the Enforcement Decree of the Act on the Collection, etc., of Premiums for Employment Insurance and Industrial Accident Compensation Insurance and the Enforcement Decree of the Industrial Accident Compensation Insurance Act

 

The bill to partially amend the Enforcement Decree of the Employment Insurance Act
 
<1> Raising benefits for working time reduction during the child-rearing period (enforcement date: Jan. 1, 2018)

 

'Benefits for working time reduction during the child-rearing period', which are provided to partially subsidize workers' wages if their wages are reduced as a result of working reduced hours to care for their children under the age of eight, will be raised beginning in 2018.

 

* Number of benefit recipients: 1,115 in 2014 → 2,060 in 2015 → 2,761 in 2016 → 2,642 as of Nov. 2017

 

Currently, such workers can receive benefits equivalent to 60% of their ordinary wages in proportion to reduced working hours. From next year, however, they will be able to receive benefits equivalent to 80% of their ordinary wages (max. 1.5 million won, min. 500,000 won), 20%p higher than the current level.

 

The higher level of working time reduction benefits will be applied to workers who start to work reduced hours on or after January 1st, 2018.

 

<2> Raising the maximum daily unemployment benefit amount (enforcement date: Jan. 1, 2018)

 

The maximum daily unemployment benefit amount will be raised from 50,000 won this year to 60,000 won next year to reflect the wage increase caused by the minimum wage hike, etc.

 

Currently, unemployment benefits are paid at a daily rate equivalent to 50% of the jobless person's average daily wage in the three months before unemployment but not exceeding 50,000 won. The maximum daily amount will be raised to take account of the wage increase caused by the minimum wage hike, etc.

 

Thanks to the increase in the maximum daily amount, jobless people will be able to receive a maximum of 1.8 million won a month in unemployment benefits. It is 300,000 won higher than this year's maximum monthly unemployment benefit rate of 1.5 million won.

 

The higher maximum daily amount will be applied to people who lose their jobs on or after January 1st 2018, and over 89,000 jobless people are expected to benefit from it.

 

* As of the end of November 2017, unemployment benefit recipients numbered 1,190,000, and the total unemployment benefits paid amounted to 4.9 trillion won.

 

<3> Extending subsidies for employing people aged 60 and over to 2020

 

Since 2012 the government has been providing subsidies to employers who employ more than a certain number of people aged 60 and over to ensure a soft landing of the extended mandatory retirement age. This subsidy program will be extended until 2020.

 

* If a workplace which has no retirement age limit employs people aged 60 and over in excess of the industry-specific standard (1~23%), it is provided with a subsidy of 240,000 won per person per quarter (for a maximum of one year).

 

The program, originally scheduled to expire at the end of this year, will be extended by another three years in order to ensure employment security for aged people and to ease the burden of managerial costs on employers resulting from the minimum wage hike.

 

** The program provided subsidies to 1,606 companies, benefiting 4,200 people, on average each year from 2012 until 2016. A total of 18,000 aged people plan to be subsidized in 2018 (17.3 billion won).

 

Employers who satisfy the eligibility requirements, including employing people aged 60 and over on employment contracts of at least one year, may apply for the subsidy through the employment insurance website (www.el.go.kr) or competent Job Centers.

 

The bill to partially amend the Enforcement Decree of the Industrial Accident Compensation Insurance Act

 

<1>Defining the specific scope of accidents occurring during ordinary commuting (enforcement date: Jan. 1, 2018)

 

The bill stipulates the specific scope of 'accidents occurring while commuting to and from work via ordinary routes or methods' as the Industrial Accident Compensation Insurance Act was revised to recognize commuting accidents as work-related accidents (Sep. 28, 2017, effective from Jan. 1, 2018).

 

If an accident occurs while the worker deviates from his/her ordinary commuting route or interrupts his/her commuting journey, it will not be recognized as  work-related in principle. However, if the deviation or interruption is made to perform the activities necessary for daily life, the accident will be recognized as work-related.

 

The activities necessary for daily life are clearly defined as follows: purchasing daily necessities; receiving job-related education or training; exercising one's right to vote; taking one's children or a disabled person to school and bringing them home from school or entrusting them to the care of someone else; seeing a doctor; and caring for a sick family member.

 

<2>Easing the burden of proof in cases of work-related diseases (enforcement date: Jan. 1, 2018)

 

If a disease is to be recognized as work-related, the claimant (victim or his/her surviving family member) has to prove that there is a significant causal relationship between his/her work and disease. However, it is difficult for claimants who are not medical experts to establish such a causal relationship, so it has been pointed out that the burden of proof falling on victims of work-related diseases needs to be eased.

 

Hence, the bill provides a clear legal basis for applying the principle of 'presumption of causation'* in judging whether there is a significant causal relationship between work and disease in order to ease the burden of proof on victims in cases of work-related diseases.

 

*If the criteria for recognition (automatic recognition), including the duration of work (exposure) and the amount of exposure, are satisfied, the disease will be recognized as work-related as long as there is no counterevidence. Even in cases where the criteria are not fully satisfied, the disease will be recognized as work-related if medical causation is established.

 

<3>Expanding the coverage of IACI (enforcement date: Jul. 1, 2018)

 

Workplaces ordinarily employing less than one worker and less than 20 million won construction projects (floor area of 100m2 or less) carried out by unlicensed constructors, which have so far been excluded from IACI coverage, will be covered by IACI from July 1st 2018.

 

As a result, about 190,000 vulnerable workers in small workplaces are expected to enjoy the benefits of IACI.

 

Currently, self-employed people in six occupational areas*, who are at high risk of industrial accidents, can opt into IACI coverage (although they have to pay insurance premiums out of their own pockets). According to the amendment bill, self-employed people in eight manufacturing industries**, including manufacture of fabricated metal products and motor vehicle maintenance, will be added to the list.

 

*Passenger transport service operators, cargo transport service operators, construction machinery business operators, quick delivery service couriers, replacement drivers and artists

 

** Manufacture of basic metal products; manufacture of fabricated metal products; manufacture of electronic components, computers and video, audio and communication equipment; manufacture of medical, precision and optical instruments, watches and clocks; manufacture of electrical equipment; manufacture of other machinery and equipment; manufacture of jewelry and ornamentations; and motor vehicle maintenance

 

As a result, about 56,000 self-employed people who run a small one-person business are expected to become eligible for IACI coverage.

 

The bill to partially amend the Enforcement Decree of the Act on the Collection, etc., of Premiums for Employment Insurance and Industrial Accident Compensation Insurance

 

□ Improving the merit rating system in terms of scope of application and differential increase/decrease rates (enforcement date: 2019)

 

Currently, the merit rating system which allows IACI premium rates to be increased or decreased according to an individual workplace's insurance balance ratio* applies to workplaces with 10 employees or more (construction projects with a total cost of 2 billion won or more in the case of the construction industry), and the increase/decrease rate varies from ±20% to ±50% depending on size of workplace.

 

* A balance ratio is a ratio calculated by dividing the total insurance benefits paid to an individual workplace due to industrial accidents over the past three years by the total insurance premiums paid by the workplace during the same period. It is an indicator of the degree of accident occurrence.

 

**(Current)±20% for workplaces with 10~29 employees, ±30% for workplaces with 30~149 employees, ±40% for workplaces with 150~999 employees, and ±50% for workplaces with 1,000 employees or more

 

Insurance premium discounts are mostly given to large companies, and it has been pointed out that such premium discounts cause companies to conceal industrial accidents because their premium rates would go up if they reported industrial accidents.

 

Hence, the scope of application of the merit rating system was adjusted to include only workplaces with 30 employees or more (construction projects with a total cost of 6 billion won or more in the case of the construction industry), and the differential increase/decrease rates were unified into ±20% which will apply regardless of size of workplace.

 

*(Current) the amount of discounts given to all workplaces (in 2016): 1.5576 trillion won; the amount of discounts given to workplaces with 1,000 employees or more: 728.2 billion won (46.8% of the total)

 

*(Revised) the amount of discounts given to all workplaces: 623.8 billion won; the amount of discounts given to workplaces with 1,000 employees or more: 260.8 billion won

 

The revamped merit rating system will be applied to IACI premium rates for 2019 and beyond.

Last Modifide Date   :   Tue January 16, 2018
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