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Employment insurance for dependent self-employed to be implemented from July 1

 

Employment insurance for dependent self-employed to be implemented from July 1

COMWEL begins application of employment insurance for dependent self-employed and receipt of report on insured status 

□   The Ministry of Employment and Labor (Minister An Kyung-duk) and the Korea Worker's Compensation & Welfare Service (COMWEL, President Kang Soon-hie) announced that employment insurance will be applied to the dependent self-employed, and job-seeking allowances and maternity benefits will be paid to them from July 1, 2021.

*(Major progress) December 9, 2020 Amendments to the “Employment Insurance Act” and the “Act on the Collection of Insurance Premiums” related to employment insurance of the dependent self-employed passed by the National Assembly (promulgated on January 1, 2021) → ❷ Discussed by the Employment Insurance Committee and subordinate legislation amended → ❸ Employment insurance for the dependent self-employed implemented from July 1, 2021

 ○    Employment insurance for the dependent self-employed is implemented according to the “National Employment Insurance Roadmap” developed to ensure all working citizens can receive the benefits of employment insurance.

- This move is meaningful as a major step to a introduce a universal employment insurance scheme by expanding the coverage from existing employee-centered employment insurance.

<Main contents of employment insurance for dependent self-employed>

The dependent self-employed who are covered by employment insurance from July 1 are workers in 12 occupations, including insurance agents, parcel delivery workers, and credit card solicitors.

(Applied from July 2021: 12 occupations) Insurance agents, supplementary educational programs instructors, supplementary education instructors, parcel delivery workers, loan solicitors, credit card solicitors, door-to-door salespersons, door-to-door rental equipment examiners, electronic home appliance delivery workers, after-school instructors (elementary and middle school), construction machinery workers, truck owners

The monthly remuneration* from the personal service contract should be over 800,000 won.

*Amount excluding non-taxable income and expenses from business income and other income under the Income Tax Act

-However, from January 2022, the dependent self-employed who make a personal service contract can apply for the sum of monthly remuneration, and if the sum is over 800,000 won, then employment insurance is applied.

If the dependent self-employed who are unemployed pay insurance premiums for more than 12 months out of the 24 months prior to the date of changing a job, are not subject to restrictions on the payment of insurance benefits such as Voluntarily changing a job and making active efforts for reemployment, they are eligible to receive job-seeking benefits for 120 to 270 days.

* Considering the characteristics of the dependent self-employed, job-seeking benefits are paid even when they change a job due to a reduction in income prescribed by Presidential Decree and make an active effort to find a new job.

In addition, if the dependent self-employed pay insurance premiums for more than 3 months before the date of birth and do not provide labor before and after the date of birth, they can receive perinatal benefits for 90 days (120 days for multiple births).

< Application of employment insurance and report on the acquisition of insured status>

Employers who make a personal service contract should report the acquisition of insured status for the dependent self-employed to the Korea Workers' Compensation and Welfare Service by the 15th of the following month for the labor services received in the prior month.

The employment insurance premium is calculated by multiplying the remuneration of the dependent self-employed by the premium rate of unemployment benefits (1.4%). The dependent self-employed and employers pay half of the amount each.

* For low-income dependent self-employed with a monthly remuneration of less than 1.33 million won, insurance premiums will be charged based on the standard remuneration of 1.33 million won.

Employers should deduct employment insurance premiums that need to be paid by dependent self-employed and pay the premiums to the COMWEL.

- For low-income dependent self-employed in small businesses*, 80% of employment insurance premiums can be funded through the Durunuri Social Insurance Subsidy Program.

*Target of Durunuri: Businesses with fewer than 10 employees, low-income dependent self-employed with a monthly remuneration of less than 2.2 million won per month, and their employers

< Implementation system of employment insurance for the dependent self-employed >

The Korea Workers' Compensation & Welfare Corporation will establish the centers for the dependent self-employed in four districts, including Seoul (under the jurisdiction of Seoul and Gangwon), Gyeonggi (under the jurisdiction of Gyeonggi and Incheon), Busan (under the jurisdiction of Busan and Daegu), and Daejeon (under the jurisdiction of Daejeon and Gwangju) to take full charge of and support the work related to employment and industrial accident compensation insurance of the dependent self-employed.

All relevant tasks such as subscribing to industrial accident compensation and employment insurance for the dependent self-employed, managing insured status, calculating and charging insurance premiums will be conducted from July 1.

Moreover, considering the need to raise the awareness of the system and prepare for insurance business management at the early stage of implementation of employment insurance for the dependent self-employed,

The COMWEL will have a “Special reporting period for insured status of employment insurance” for 3 months from July, distribute guidance materials and hold a briefing session etc.

*Penalties will be waived in case of reporting a delay or correction of insured status during a special reporting period.

Kang Soon-hie, president of the Korea Workers' Compensation & Welfare Service, said "We will strengthen our efforts to stably operate the centers for the dependent self-employed based on our insurance business experience to allow the dependent self-employed to work comfortably without having to worry about unemployment."

Minister of Employment and Labor An Kyung-duk stated “We will make an active effort to establish employment insurance for the dependent self-employed to enable the dependent self-employed who have experienced increased difficulties caused by COVID-19 and other issues can enjoy the benefits of employment insurance.”

“We plan to continue to expand the coverage of employment insurance to ensure that employment insurance can work as a strong safety net for all employed people,” he added.

 

Last Modifide Date   :   Mon July 5, 2021
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