- Government Publishes Draft Amendments to the Employment Insurance Act and the Act on Collection of Employment and Industrial Accident Insurance Premiums for Public Comment (July 7 – August 18, 2025) -
The Ministry of Employment and Labor (Acting Minister Chang-jun Kwon) announced on July 7 that it has published for public comment proposed amendments to the Employment Insurance Act and the Act on Collection of Employment and Industrial Accident Insurance Premiums. These proposals reflect the decisions made by the Employment Insurance Committee (chaired by the Vice Minister of Employment and Labor) after eleven rounds of deliberations among labor, management, and experts since March 2023.
Over the past three decades, as employment forms have diversified—part？time jobs, multiple job？holding, and frequent job changes have increased labor market fluidity—the need to rebuild the employment insurance system around individual income has grown. The draft amendments would replace the existing 15？hour weekly work threshold with an income-based eligibility criterion. Using tax data, workers who were previously excluded from coverage would be enrolled ex officio, eliminating blind spots in the system. At the same time, reporting requirements that can be satisfied by existing national tax filings would be abolished or simplified, and the real-time-income data infrastructure developed through employment insurance administration would be repurposed to identify and support participants in various public employment programs.
Key Features of the Draft Amendments
1. Change of Eligibility Criterion: Hours Worked → Actual Remuneration
Under current law, workers are covered if they work at least 15 hours per week. Because actual working hours are often hard to verify even through on？site inspections, many eligible workers have been missed when employers fail to report them. The amendment would redefine coverage eligibility in terms of “remuneration” (taxable employment income minus non？taxable allowances). By querying comprehensive national tax records, authorities could easily identify uninsured workers and enroll them automatically each month via a linkage with the National Tax Service’s real-time income monitoring system. This change is expected to strengthen protection for vulnerable workers.
* The specific income threshold will be set by enforcement decree after further consultation with labor, management, and experts.
For workers holding multiple jobs, if the combined income across all jobs exceeds the threshold even though each alone does not, the worker may elect to enroll in employment insurance.
2. Change of Premium Assessment Basis: Average Monthly Wage → Actual Monthly Remuneration
Currently, employers must report employee wages separately to both the National Tax Service and the Korea Workers’ Compensation and Welfare Service. On March 15 each year, they report total wages paid in the prior year, based on which average monthly wages are calculated and premiums assessed. Any shortfall is reconciled in the next year’s filing, imposing double？reporting burdens and lump？sum payments on employers.
Starting January 2026, under amendments to the Income Tax Act, employers will report monthly income for regular employees to the National Tax Service. Employment and industrial accident insurance premiums will then be assessed on actual monthly remuneration as reported in real time, and the yearly reporting obligation to the Welfare Service will be eliminated. One-time reporting to the tax authority will suffice, reducing administrative burdens and smoothing premium payments. If insurance premiums are levied and collected on the basis of the actual salary for the current year, the burden of having to pay the entire insurance premium calculated based on the difference from the actual salary in the following year will also be reduced.
3. Change of Benefit Calculation Basis: Average Wage → Actual Remuneration
At present, the standard for collecting employment insurance premiums is based on the salary, whereas the standard for paying unemployment benefits is based on average wages, making the standards different from each other. In order to pay unemployment benefits, additional verification of pre-job-change wages was required, and employers were required to report a job change certificate, including wages, to the employment center, making prompt payment difficult. The amendment would use the same remuneration data for both premium assessment and benefit calculation. Moreover, to prevent temporary fluctuations from unduly affecting benefit levels, the calculation period would change from the three？month pre？separation average wage to the one？year pre？separation total remuneration. This alignment would simplify and accelerate benefit claims. In parallel, parental leave benefits and reduced？hour work benefits, currently based on standard wages, would be revised to use the same remuneration basis.
During the 40-day comment period, the Ministry will collect stakeholder feedback and consult with related ministries, with the aim of submitting the bill to the National Assembly by October 2025.
Acting Minister Chang？jun Kwon stated, “These amendments are the meaningful result of joint deliberations among labor, management, and experts on the shortcomings of our employment safety net and its future direction amid changing labor market conditions. Since 1995, when it was introduced the latest, employment insurance has become a vital support for those who lose their jobs. The proposed reforms lay the foundation for employment insurance to evolve into a truly universal safety net for all workers and will guide improvements in other social insurance systems.” He added, “The real？time income monitoring system built through employment insurance administration will serve as critical infrastructure to ensure that diverse government employment programs reach those who need them most.”