Government subsidies for fixed-term employees- The Minister of Employment and Labor subsidizes a certain amount in employment stability incentives to employers who improved the working conditions of their employees by converting fixed-term employees to regular employment [subparagraph 3 of Article 25(1) of the Employment Insurance Act; subparagraph 5(a) of Article 35 of the Enforcement Decree of the Employment Insurance Act; subparagraph 2(b) of Article 2 of the Regulation on the Application for and Payment of Employment Creation Incentives/Employment Stability Incentives (Ministry of Employment and Labor Public Notice No. 2022-139, issued and enforced on January 1, 2023)].
Eligible employers (see hereinafter Ministry of Employment and Labor, Employment Incentive Subsidies in 2023, <January 2023>, pp. 35–36)- Eligible employers: Enterprises eligible for priority support and middle-standing enterprises
Subsidy requirements- All of the following requirements must be met to receive the employment stability incentive for conversion to regular employment:
· Converts to regular employment or directly employs a fixed-term/temporary agency/in-house subcontractor employee or a special-type employment worker (limited to those who have mainly supplied labor to the business owner in question) who has been employed (retained) for at least six months and up to two years, and maintains the employment for at least one month
√ However, employees who meet one or more of the exceptions in the subparagraphs of Article 4(1) of the Act on the Protection of Fixed-Term and Part-Time Employees, elderly temporary agency workers under Article 6(3) of the Act on the Protection of Temporary Agency Workers, temporary agency workers replacing vacancies due to childbirth, illness, injury, etc., under subparagraph 1 of Article 6(4) of the same Act, and temporary agency workers employed by the temporary work agency are eligible for subsidies even if the period of employment (retainment) exceeds two years.
· Wages amount to at least the minimum value after the conversion to regular employment
· Subscription to employment insurance
The scale of subsidies- The employer can receive subsidies every three months for up to a year from the month after that of the date on which the fixed-term employee was converted to regular employment (per diem calculation based on the actual period of continuous employment).
|
Wage increase |
Details |
|
Wage increase of at least KRW 200,000 |
Fixed monthly payment of KRW 500,000 (KRW 200,000 in compensation for increased wages + KRW 300,000 in indirect labor costs) |
|
Wage increase of less than KRW 200,000 |
Fixed monthly payment of KRW 300,000 (KRW 0 in compensation for increased wages + KRW 300,000 in indirect labor costs) |
※ However, indirect labor costs are not subsidized for employees whose payroll costs were subsidized during the initial hiring by the State or local government through employment creation subsidization (only KRW 200,000 in compensation for increased wages is paid).
Limits on the number of subsidized people- There is no limit to subsidization when temporary agency/in-house subcontractor employees or special-type employment workers are converted to regular employment or directly employed.
- A limit of up to 30% of the total number of insured individuals (round down decimals; three people for workplaces of at least five and fewer than 10 people), as of the last day of the year immediately prior to the month of the date on which the first application to participate in the project was submitted, are subsidized for converting fixed-term employees to regular employment, and may not exceed a maximum of 100 persons. The cumulative number of subsidized persons for the workplace may not exceed this limit.
- If the application to participate in the employment stabilization incentive subsidization program was submitted three years after the day the subsidy limit was originally set or reset, the subsidy limit will be reset, but if the new subsidy limit is more restrictive than the prior one, the prior subsidy limit will apply.