Empleo y políticas laborales en Corea 2014

2014Employment and Labor Policy in

It's a great pleasure to publish the revised edition of Employment and Labor Policy in

Korea which contains the major achievements of Korea's employment and labor policies.

This book covers major policy tasks the government has pursued in 2014 to make real progress

with the goal of achieving a 70% employment rate. and advancing of Industrial relations.

This year, the government has doubled its efforts to create more jobs by reducing working

hours and to mobilize economically inactive population into the labor market. Most of all, we

have taken three key measures: first, promoting Korean apprenticeship training programs

(work-study dual system) to increase the youth employment rate; second, creating decent part-

time jobs to enhance the employability of women; and third, establishing employment-welfare

plus centers to provide one-stop employment and welfare service for low-income groups.

Furthermore, the government has strived to improve the working conditions of non-regular

workers and narrow the gap between employees working for principal contractors and

subcontractors in order to enhance the quality of jobs.

Ministers Message

2014 Employment and Labor Policy in Korea

In the meantime, labor-management relations have been stable relatively amid contentious

issues, such as ordinary wages and working hours, and the tripartite dialogue among labor,

management and the government, which had been suspended since late last year, got back

on track.

In 2015, the government will make further efforts to create more jobs and implement

fundamental reform of the labor market, such as making the wage system more rational and

promoting cooperation between principal contractors and subcontractors.

I sincerely hope that this book provides readers with a clear understanding of the labor

market situation and employment and labor policies in Korea.

Minister Lee Ki-Kweon

Minister of Employment and Labor

Lee Ki Kweon

Korea at a glance


Geography and Demographics (2013)

Official Name : The Republic of Korea

Area(2013) : South Korea is 100,266 in area

Climate : Korea has a relatively temperate climate with four distinct seasons and heavy rainfall insummer. Winter is cold.

Capital : Seoul. Other Major Cities: Sejong(Administration-Centered Complex City), Busan, Daegu,Daejeon, Gwangju, Incheon, Ulsan

Population(2013) : 50,219 thousand

Population growth rate : 0.4%

Life Expectancy(2013) : 81.94 years, (Male 78.51 years, Female 85.06 years)

Language : Korean belongs to the Ural-Altaic family of Languages. Others in this group include Turkish,Mongolian, Kazakh, Uzbek.

Writing system : Hangul, the Korean alphabet invented by King Sejong the Great in 1443, consists of 10 vowels and 14 consonants.

Economy (2013)

GDP : $1,304.3 billion

Per-capita GNI : $ 26,205

Monetary Unit : Won( )

Economic Growth Rate : 3.0%

Trade Balance : $ 44.1 billion (Exports = $ 559.6 billion, Imports = $ 515.5 billion)

Consumer Price Increase : 1.3%

Major Labor Indicators (2013)

Economically active population : 25,873,000 persons

Employment rate(15~64) : 64.4%

Number of employed : 25,066,000 persons

Unemployment rate : 3.1%

Number of trade unions(2012) : 5,177

Trade Union Density(2012) : 10.3%

Number of union Members(2012) : 1,781,337 persons

Industrial accident rate : 0.59%

Part. 1 Major Policy Agenda for 2014

Employment Policy for more and better jobs

1. Increase job opportunities for youth2. Help women fully show their abilities3. Help middle-aged and elderly people stay active and work longer4. Expanding workfare for low-income people5. Build a robust employment safety net and reduce industrial accidents6. Build a new employment and labor system that can open up a new future

131314151616

Part. 2

I. 2014 Korea's Labor Market Trend

II. Implementation of the Roadmap to 70% Employment Rate to Provide Opportunities to Work1. Implementation of employment-friendly policies 2. Laying the Foundation for More Jobs for Youths 3. Expansion of employment opportunities for vulnerable groups 4. Creating decent jobs by fostering social enterprises

III. Creating Vibrant Workplace through Tailored Employment Services and Vocational Skills Development 1. User-oriented tailored employment services 2. Life-long vocational competency development based on stages of the life-cycle

IV. Building a Close-Knit Employment Safety Net1. Strengthening employment insurance's roles and functions as a social safety net2. Employment security program to retain or create employment

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Part. 3 Protection of Working Conditions and Promotion of Workers' Welfare

I. Overview

II. Addressing the Practice of long working hours and Improving the Ordinary Wage System 1. Improvement of the working hour system 2. Improving the Ordinary Wage System

III. Minimum Wage System and Establishment of Basic Employment Conditions1. Minimum Wage System 2. Strengthening efforts to prevent and clear up overdue wages and related support for workers

IV. Non-regular Workers' Employment Security and Addressing Discrimination 1. Non-regular employment in Korea 2. Employment security for non-regular workers and protection of their working conditions 3. Establishment and implementation of comprehensive measures for non-regular workers 4. Protection of In-house subcontracted workers 5. Support for companies' voluntary efforts to redress discrimination

V. Promotion of Workers' Welfare 1. Retirement Pension System 2. Welfare systems for workers

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Part. 4 Advancement of Industrial Relations

I. Overview of Industrial Relations in Korea

II. Establishment of Foundation for Win-Win Labor-Management Cooperation 1. Strengthening of central tripartite dialogue and local quadripartite cooperation 2. Labor-management council system 3. Spread of social responsibility among employers and workers 4. Stronger support for the spread of labor-management cooperation

III. Establishment of Fair and Responsible Industrial Relations Culture 1. Efficient and preventive management of labor-management conflicts 2. Reform of irrational industrial relations culture and practices

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100100101

Creation of Safe and Healthy Workplace

IV. Improvement of Industrial Relations Laws and Systems 1. Rational reinforcement of the paid time-off system 2. Strengthening Labor Relation Commissions' dispute prevention/mediation functions

V. Establishment of Rational Industrial Relations in the Public Sector 1. Public officials' labor relations 2. Teachers' industrial relations 3. Industrial relations in other areas of the public sector

102102103

108108110111

Part. 5

I. Overview

II. Safety Management in Accident-Prone, Vulnerable Sectors 1. Intensive control of occupational accidents 2. Stronger efforts to prevent fatal and big accidents 3. Protection of workers vulnerable to industrial accidents

III. Enhanced Prevention of Occupational Diseases 1. Chemicals control 2. Working environment management 3. Employee health management

IV. Strengthening Health Management of Workers 1. Enhanced prevention of work-related diseases 2. Support for health management in small workplaces

V. Improved Infrastructure for Industrial Accident Prevention 1. Establishment of the risk assessment system2. Promotion of win-win cooperation on occupational safety and health(OSH)

VI. Expanded IACI Coverage and Enhanced Return-to-Work for Workers with Occupational Accidents 1. Overview 2. Measures taken to extend IACI coverage to non-standard contracted workers 3. Reinforced rehabilitation services to enhance return-to-work for workers with occupational accidents

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Part. 6 International Cooperation in Employment and Labor Administration

1. Overview 2. Participation in activities of international organizations 3. G20 Labor and Employment Ministerial Meeting 4. FTA negotiations 5. Implementation of international cooperation projects 6. Support for labor management at Korean companies overseas and foreign companies in Korea

144145146147147151

Appendix

I. Major Statistics

II. Organizational Chart

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Part. 1

Major Policy Agenda for 2014

12 2014 Employment and Labor Policy in Korea

Major Policy Agenda

EducationTraining

Increase jobopportunitiesfor youth

Unemployment Industrial accident

Expand workfare for low-income people

Retirement

Helpmiddle-aged andelderlypeople stayactive andwork longer

Industrial relations

Build a new employment and labor system that can open up a new future

A country where all people can fully show their abilities in the jobs they want

Help women fully show their abilities

Social safety net

Build a robustemployment safety netand reduce industrial

accidents

ChildbirthChildcare

Housework

Part 1M

ajor Policy Agenda for 2014

Part. 1 Major Policy Agenda for 2014 13

1. Increase job opportunities for youth

Innovating vocational education/training using National Competency Standards (NCS)

The government will complete the development of NCS for all kinds of jobs and more intensely

manage the quality of developed NCS to ensure that they reflect technological changes in industries.

Spreading competency-oriented hiring and HR management

The government plans to increase the number of competency-focused mentoring schools'(10

schools, 500 peopl) in sectors which desires to employee young workers and provide support

to help more businesses(180 firms) adopt core vocational competency assessment model

Creating conditions to make SMEs attractive to young people

The government will offer employment environment improvement projects for industrial

complexes, carried out by various ministries responsible for housing, culture, welfare, education,

etc., in a single package (52 billion KRW in 2014), and disseminate successful models.

Expanding the realm of jobs for young people

Related ministries will cooperate to support job creation in promising strategic industries

and strengthen high-skill education/training tailored to the needs of strategic industries. The

government will also put the K-Move project into full operation and enhance the related

performance management.

2. Help women fully show their abilities

Helping working women maintain their careers

The term childcare leave is changed to parental leave to promote the use of childcare leave

by fathers and thus to support the sharing of childcare responsibilities between both parents.

The government will provide stronger support to ensure that women can maintain their

careers by working shorter hours during their pregnancy or child-rearing period instead of

stopping their work completely.

Providing customized services to women who desire to be reemployed

The government will continue to increase the number of job centers dedicated for women

(Sae-il centers)(120 in 2013 130 in 2014) and introduce the return-to-work academy for

women (provisional name).

Spreading part-time and flexible work

The public sector will make visible progress in hiring part-time workers.

* By 2017, 4,000 public officials and 9,000 other public-sector workers will be employed part time. In 2014part-time jobs will be introduced among teachers.

The government will also set up a pool of substitute workers in the private sector (Private

Substitution Manpower Banks) and a recruitment portal (Work-Net) for replacement workers

and expand the subsidy for companies hiring replacement workers to make it easier to hire

replacement workers if existing employees switch to part-time work. The government will also

conduct workplace guidance and inspection with regard to maternity protection twice a year

and make public the list of companies which fail to take affirmative action (from Jan. 2015).

3. Help middle-aged and elderly people stay active and work longer

Life Act I: Entrenching the minimum retirement age of 60 or longer

The government is helping workplaces adopt the minimum retirement age of 60 or over in a

prompt manner and restructure their wage systems accordingly.

Life Act II: Helping retirees find their second careers

The government will bolster displacement services, including providing free training, for

workers due to leave or retire from their jobs in SMEs, so that they can prepare themselves

for reemployment even before retirement. To do so, the government will make the job

academy for middle-aged people an employment-linked training program specialized for the

elderly and expand it.


Part 1M

ajor Policy Agenda for 2014

Life Act III: social security for post-retirement life and social contribution

The government will create more social contribution jobs (1,345 jobs in 2013 3,000 in 2014),

and in cooperation with local governments, will create jobs to meet demand for social welfare

services (extra points for social service job-creation projects during the selection process).

4. Expanding workfare for low-income people

Spreading employment-welfare convergence services fast

The government will speed up the proliferation of employment-welfare plus centers (10

centers in 2014 70 in 2017) and make it a spatial integration model in which many

employment and welfare service agencies bring together their services under one roof so that

people can conveniently receive various services in one place.

Strengthening efforts to guarantee basic working conditions

The government will strengthen punishment for willful or habitual wage delays, create a

rights remedy team to promptly settle wage delay cases and make labor inspections more

professional and effective by setting up a wide-area labor inspection team in each of the

seven regional offices.

Improving the practice of employing non-regular workers

The public sector is converting its non-regular workers to regular status (20,000 workers in

2014, total 65,000 in 2013~2015), and the conversion results of public institutions are

checked and announced every February and July.

The government will strengthen guidance and inspection for workplaces employing a large

number of non-regular workers to find and correct discrimination. The government will introduce

the punitive compensation system designed to deal with willful or repetitive discrimination and the

provision expanding the effect of confirmed corrective orders (Sept. 19, 2014).

Part. 1 Major Policy Agenda for 2014 15

5. Build a robust employment safety net and reduce industrial accidents

Building a more close-knit employment safety net

The government will reinforce the employment safety net, especially for the five groups

which are neither covered by, nor enrolled in, employment insurance (EI).

The government is also pursuing an overall review and reform of the unemployment benefit

program to give jobless people an adequate level of support during unemployment and help

them move to stable jobs. The government raised the maximum amount of job-seeking

benefit (unemployment benefit) in line with wage increases and revised the minimum amount

to make it more lucrative to work.

Creating an accident-free safe workplace

In order to make large companies more responsible for safety and health, the government

will control excessive contracting out of hazardous or dangerous work. More specifically, the

government will expand the scope of work prohibited from being contracted out, such as

work involving handling hydrofluoric acid or sulfuric acid, and tighten the requirements for

permission to contract out hazardous or dangerous work in the second half of 2014. The

government will also strengthen the penal provisions for principals contractors violating laws

in the second half of 2014 and expand the scope of industries in which large companies and

SMEs are required to strengthen their cooperation.

6. Build a new employment and labor system that can open up a new future

New employment and labor system means creating an open and fair labor market by revamping

old labor market institutions and practices unable to keep up with economic and social changes,

such as low fertility, population ageing, global low growth and widening socioeconomic inequality.

The government aims to create an efficient labor market that can increase productivity and create

jobs by reforming labor market institutions. To that end, the government will help restructure wage

systems into job-, value- and competency-based ones and thus enhance wage fairness.

The government aims to create an open labor market that offers various forms of work by

improving the way of working and work culture. It also tries to create a fair labor market that

can deliver prosperity for all by changing unreasonable practices.


Part. 2

Employment Policy for more and better jobs

As Korea's economic growth rate which had fallen to as low as 2.3% went back up to 3.9%

in the first quarter of 2014, the number of employed persons increased steeply. In the third

quarter of 2014, employment growth stayed at a higher level than in previous years.

The employment rate for 15~64 year olds dropped to 62.9% in 2009, but since the financial

crisis, it has been on the increase, hitting a record high of 64.4% in 2013. The employment

rate for those aged 15 and over also returned to a pre-crisis level of 59.5% in 2013. It

averaged 60.2% between January and October in 2014, which was the highest on record.


I 2014 Korea's Labor Market Trend

* Source: Statistics Korea, Economically Active Population Survey


Not only has employment expanded quantitatively, but the employment structure has also

continued to improve as the employment growth has been driven mainly by wage workers

and women, and the increase in paid employment has been led by regular workers. In

particular, workers on an employment contract of indefinite duration who enjoy a relatively

high level of job security accounted for more than 99% of all regular workers newly

employed in 2013. The employment rate for 15~64 year-old women has continued to

increase. It averaged 54.9% between January and October in 2014, staying above the level

seen before the financial crisis.

Nonetheless, some problems still persist, including declining youth employment and long

working hours. The youth employment rate has fallen considerably (from 45.1% in 2004 40.7% in 2013) since the financial crisis. And wage workers in Korea worked an average of

2,071 hours in 2013, 21 hours less than in the previous year. The figure was the third highest

among OECD countries, behind Mexico (2,328 hours) and Chile (2,058 hours).

Part. 2 Employment Policy for more and better jobs 19

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ployment Policy for m

ore and better jobs


I20 2014 Employment and Labor Policy in Korea

Employment & Industrial Relations MeasuresII


Implementation of the Roadmap to 70% EmploymentRate to Provide Opportunities to Work

1. Implementation of employment-friendly policies

1-1. Implementing the Roadmap to 70% Employment Rate

1-1-1. Background

The government established the Roadmap to 70% Employment Rate on June 4, 2013 and

has since been implementing it in order to cope with low fertility and population ageing and

restore the middle class.

In 2014, the second year of the implementation of the Roadmap, the government

maintained its government-wide cooperation mechanism and pushed ahead with field-

oriented policies to produce more tangible outcomes for the public. The government has been

Reform of Working hours & Work Arrangements

Reduction of long Working hoursSpread of decent part-time workSpread of flexible work arrangementsJob Creation through

Creative Economy

Business start-upsNew occupationsInnovative SMEsService sector JobsSocial economy

Mobilizing UntappedWorkforces

WomenYouthOlder WorkersInactive & Working poorsStrengthen Social Responsibility

& Tripartite Partnership

Removal of discriminationTripartite Agreement

70%employment rate

1 2

3

4


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working to achieve a paradigm shift in the labor market, which is the ultimate goal of the

Roadmap, by moving the focus away from exports, manufacturing, large companies and male

and full-time employment, and towards domestic consumption, services, SMEs, women and

work-life balance. By doing so, the government has continued its efforts to improve the way

of working and create quality jobs.

1-1-2. Contents

In 2014, the government continued its efforts to make the outcomes of policies contained in the

Roadmap more tangible to the general public by, for example, coming up with field-oriented

complementary measures and strengthening the role of local areas. As part of such efforts, it

monitored the key tasks which had already been announced as part of the Roadmap, at the field level,

and immediately took follow-up measures based on the results. Moreover, in an effort to strengthen

the role of local areas, the government set an employment target for each local area (16 cities and

provinces) and monitored progress (three occasions in 2014 (May 19, Jul. 22 and Nov. 3)) through

task forces run by 47 job centers to meet a 70% employment target. It also held a jobs policy

meeting attended by vice mayors and governors of cities and provinces (Oct. 29). Meanwhile, the

government-wide cooperation mechanism built around the Roadmap continued to operate to ensure

the smooth implementation of the Roadmap.

1-1-3. Achievement

Major employment indicators, including the employment rate, have improved thanks to the

continued implementation of the Roadmap.

For a start, employment has grown consistently since the second half of 2013 when the

government unveiled the Roadmap with the employment rate for 15~64 year olds reaching a

record high of 66.0% in July 2014. The average employment rate for 15~64 year olds between

January and October in 2014 was 65.3%, representing the highest rate ever recorded for the

comparable period and an increase of 0.9%p from the same period a year ago. By population

group, the employment rate rose for all population groups in October 2014. The number of

employed persons increased substantially, especially among women and older people.

The quality of employment has improved, too. Regular employees(employees on contracts

of one year or more) have made up a growing share of employed persons (59.3% in 2010

64.9% in 2014, Jan.-Oct. period). In 2013, the wages of temporary and daily workers jumped

by 6.5%, a bigger increase than 3.8% for regular employees. The proportion of part-time

workers covered by social insurance has increased across all industries, which implies that

decent part-time employment has grown as well.

Moreover, the number of enterprises participating in the work-life balance campaign has

continued to increase, reaching 134 (including NGOs) in November 2014. Interest in

improving the way of working and work culture is growing across society as evidenced by

the fact that major daily newspapers, such as The Hankyoreh (Life with Work-Free

Evening, Oct. 12~) and The Dong-A Ilbo (Please Give Back My Evening Feb. 20~), carry

a series of related feature articles.

Meanwhile, a total of 95 follow-up measures had been announced and 31 laws had been

enacted or revised until September 2014 since the launch of the Roadmap.

1-1-4. Future plan

In 2015, the government will continue to make efforts to achieve a 70% employment rate

by, for example, implementing the Roadmap as planned.

In the third year of its implementation, rather than developing new policies, the government

will manage and administer existing policies in an outcome-oriented way, with emphasis on

making their outcomes more tangible to the general public. To do so, it will focus on

producing concrete outcomes by, for example, conducting field-level monitoring and finding

best practices, especially with regard to three key policy tasks, namely part-time work, the

work-study dual system and employment-welfare centers.

In an effort to strengthen the local- or industry-level monitoring systems, the government

will also monitor the performance of local areas through a local jobs policy meeting

attended by vice mayors and governors of cities and provinces, and conduct in-depth

monitoring and take employment support measures, mainly in sectors likely to suffer a

massive employment adjustment or a slump.


1-2. Expanding and strengthening employment impact evaluation

1-2-1. Background

As the economic and industrial structures characterized by low employment have been

intensifying since the 1990s, even amid economic growth, people have been unable to feel

any improvement, and progress toward better and more jobs has remained slow. So the

government decided to find policy alternatives that can create more jobs, in all areas of

government policy, including economic, industrial and welfare policies as well as

employment policies that have a direct impact on jobs. This made it necessary to analyze and

assess objectively the employment impacts of government policies and administer them in an

employment-friendly way based on the results.

1-2-2. Achievement

According to the results of basic research conducted in 2006~2009 to implement the

employment impact evaluation system and the Framework Act on Employment Policy

amended in 2009, the government conducted employment impact evaluations of seven

projects, including the four rivers restoration project within the remit of the Ministry of Land,

Transport and Maritime Affairs and policy for the development, utilization and dissemination

of new and renewable energy technologies, on a trial basis in 2010. It examined the

employment effects of those projects, drew up relevant budgets in a way to boost their job-

creation effects, and made policy suggestions, such as more investment in vocational training

and HRD, to increase their employment effects.

In 2011, the government designated the Korea Employment Information Service as the

employment impact evaluation center to evaluate the employment impacts of government policies

on an regular and ongoing basis. In particular, with a view to ensuring timely evaluation of

policies, the government conducted a survey of the general public, employment experts, central

government agencies and local governments to identify policy tasks that need such evaluation.

In particular, as the current government shifted the focus of the national agenda from

growth to employment, the need to assess major policies from the perspective of employment

has been growing higher. In response, the government has selected key job-creation projects,

including tasks being implemented under the Roadmap, as evaluation targets since 2013.


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As employment impact evaluation has become the main means of evaluating the Roadmap,

the results of employment impact evaluations are increasingly being used. In 2013, the

government came up with a guideline for calculating job-creation effects on the basis of the

methodology used for employment impact evaluation, and calculated the effects of each

government agency's major projects on job creation according to the guideline. It is now

examining those effects.

Moreover, the government came up with an employment impact evaluation guideline in

July 2013 to make the evaluation procedure and methodology more systematic.

1-2-3. Future plan

In order to help national policies to be administered in a job-centered manner, the Ministry of

Employment and Labor will continue to expand and strengthen the employment impact

evaluation system. With the system, MOEL will predict the job-creation effects of key tasks

included in the Roadmap and thus ensure that plans taking account of jobs can be established. In

particular, to ensure that project plans and budgets reflect improvement measures resulting from

evaluations, it will strengthen the linkage system and thus increase the utilization of evaluation

results. It will also continue to expand the scope of evaluation targets to include institutional

improvements and industrial policies as well as existing funding projects, and thereby support

the establishment and implementation of employment-friendly policies at the macro level.

The evaluation system will be refined in a way that makes evaluation results known and open to

the general public. In particular, more concrete and easy-to-use policy suggestions will be offered

based on evaluation results. To that end, the government will create a database of evaluation results

and further strengthen its collaboration with the National Assembly and private organizations.

1-3. Implementing local-based employment policies

1-3-1. Overview

In response to the trend towards localization and decentralization, the government has

strengthened local employment policies by establishing and implementing policies suited



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toward local characteristics in order to enhance efficiency and bridge gaps in job

opportunities between regions.

1-3-2. Policy measures to strengthen local employment infrastructure

Firstly, regional employment deliberation committees were set up in 17 municipalities and

provinces. The committees deliberate on various projects such as social service job projects,

projects aimed at expanding employment services at colleges and universities, local-based job

creation support programs, etc. The government created legal grounds for the integration of

the regional employment deliberation committees into the committee of labor, management,

civil society and the government.

Secondly, in order to promote employment policies customized to local areas by creating

jobs and nurturing human resources who fit in the local economy, information has been shared

and exchanged between the central government and local governments, also policy council

meetings on local employment were held to create more jobs through the cooperative efforts.

Thirdly, to strengthen the employment policy capacity of local areas, the government has

provided local employment education courses such as the local job creation target notice

system, local-customized job creation support programs, etc. particularly for those in charge

of employment services at local governments and NGOs.

1-3-3. Local-customized job creation support program

The Ministry of Employment and Labor has carried out a local-based job creation

program since 2006 to ensure that local areas take a leading role in designing and

implementing their own job creation projects.

The local-customized job creation support program was created to help local NGOs,

academic institutions, workers' and employers' organizations, and local governments conduct

research on their local labor markets and develop creative job creation projects.

In 2014, under the local-customized job creation support program, the government selected 567

local projects through an open bidding process and provided them with 77 billion KRW in

funding. Among the selected projects, specialized projects accounted for the biggest portion with

485 projects, followed by 16 packaged projects, 49 research projects and 117 forum projects.

Furthermore, with a view to strengthening the connection with the local job creation target

notice system, the government began to provide financial supports to local governments

with good records in relation to the system: an additional 5.8 billion won was granted to 56

local governments to finance their local-customized job creation projects.

The local-customized job creation support program has provided an opportunity to rethink

the necessity and validity of local employment policies and contributed to development of

policy capabilities of local governments.

Moreover, the programs are also meaningful in that they serve as an opportunity to request

integration of local employment governance and expansion of labor-management

participation as the central and local labor-management organizations become more interested

in local employment policies.

1-4. Local job creation target notice system

Local job creation target notice system is a measure to boost local employment. Heads of

local governments announce to local citizens the goals and plans associated with job creation

which are to be pursued throughout their term in office. The central government provides

various supports to realize the goals and plans. In cooperation with local employment-related

organizations, heads of local governments develop specific goals and plans for job creation

and publicize them to local citizens through local press, government homepages, etc.


Type Specialized project Packaged projectResearch & forum project

Research ForumTotal

No. of projects 485 16 49 17 567

Amount of subsidies 68,704 4,559 2,949 765 76,977

(unit : million KRW)

The goals that need to be announced include indicators such as the employment rate, the

number of employed people, etc., which can be found from statistical surveys, and job creation

targets for each project to be carried out. The action plans necessary to achieve such goals

include specific measures tailored to local characteristics that need to be taken in order to

create and/or retain jobs, reduce the supply-demand mismatch, develop vocational skills, etc.

Since the notice system was introduced in July 2010, a total of 244 local governments (including

17 metropolitan city/provincial governments) have joined the system as until November 2014.

The local job creation target notice system contributed to the creation of jobs suited to local

characteristics and improvement of awareness on job creation and skills development by

encouraging local governments' leadership in policy development and designing customized

projects for different regions. Furthermore, the System also helped to create human networks

among employment-related officials and experts.

2. Laying the Foundation for More Jobs for Youths

2-1. Youth Employment Trend

The youth employment rate began to decline from 44% in the first half of the 2000s,

reaching the 30% level (39.7%) for the first time in 2013. This year, however, youth

employment has seen a modest improvement. The employment rate for people aged between

25 and 29, or the major employment-age group, hovers around 68% although the employment

rate for those aged 20 to 24, or the college-age group, has declined a lot.


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Total Metropolitan city/ province City County Autonomous district

No. of all local governments 244 17 73 85 69

No. of participants 244 17 73 85 69

(%) (100) (100) (100) (100) (100)

Considering recent demographic changes in youths, high university enrollment rates, skills

mismatches and other structural factors in the labor market, it is hard to expect youth

employment to improve greatly in a short period of time. In response, the government has

implemented a range of youth employment measures, customized for the needs of different

age groups, to provide young people with more and better jobs.

2-2. Policy Measures and Future Direction

2-2-1. Providing More Job Opportunities for Youths

At a provisional session of the National Assembly in April 2013, the revised Special Act on

the Promotion of Youth Employment was passed (promulgated on May 22, 2013) under an

agreement between ruling and opposition parties. Under the Special Act, starting this year,

public institutions and local public companies are required to fill 3% of their jobs with young

people every year. In certain inevitable cases prescribed in presidential decrees, including

restructuring, an employer may be exempt from the requirement. Public institutions' youth

employment rates are reflected in assessment of their business performance, and the list of

public institutions failing to comply with the requirement is made public (temporary

implementation for three years from January 1, 2014 ~ December 31, 2016).

In the private sector, youth internship has been promoted to help young people build job

experience, increasing their chance of becoming regular workers, and help address SME's

labor shortages. In an effort to lay the groundwork for secure and quality jobs for young


people, the government has limited the participation of businesses with low internship

completion rates and given small but strong companies preferential treatment in assessment

and designation of internship providers.

Regarding overseas employment, the MOEL is cooperating with other ministries and

utilizing Korean networks around the world to train young Koreans to global talent and

support them to find work in other countries. The government moved away from the previous

job placement system led by the public sector and training centers, shifting toward a new

system focused on building up and utilizing various public-private networks in local areas.

The MOEL has also increased access to overseas job information by integrating information

on overseas work (internship, voluntary work, employment, etc.), scattered across several

ministries, into an integrated network of foreign job information. The government abolished

previous training programs, focused solely on producing skilled workers without

consideration of the needs of companies seeking new employees. Instead, the government

adopted programs tailored to employers' needs, such as K-MOVE School.

2-2-2. Supporting Youths to Enter the Labor Market Early

In 2013, the MOEL introduced as a pilot program the work-study dual system, an industry-

academia training system in which young people receive theoretical and practical education

in the workplace and then obtain college degrees or qualifications. Starting this year, the

MOEL has been actively promoting the system.

In the youth employment academy, businesses or employers' organizations work with

universities or ordinary high schools to provide customized education linked to employment.

To support young people to enter the labor market early, college youth employment centers

have been established with job counsellors on campus to provide career guidance and

employment support services.

Moreover, the government has implemented the following measures: first, developing and

utilizing the National Competency Standards; second, developing and promoting tools for job

competency assessment; and third, promoting skills-based hiring and HR management by

offering mentoring programs (Mentor Schools) to any young people regardless of their

academic credentials in order to prevent young people from spending too much time on

getting unnecessary qualifications and delaying employment.


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2-2-3. Reducing Mismatches between Jobs and Youths Needs

Since October 2012, the MOEL has provided information on small but strong companies on

Worknet. In July 2013, the government improved the criteria for small but strong

companies based on young people's expectations, and as a result, the number of small but

strong companies became 10,000. Young people or youth supporters have visited small but

strong companies to directly provide young job-seekers with information on the companies.

The information includes what types of people the CEOs want to hire, interviews with HR

managers, what the companies' employees think of their workplace, stories after visiting the

companies, images, video clips and many others.

Furthermore, to narrow the wage gap between SMEs and big companies, starting next year,

the government plans to provide certain amounts of subsidies for young people working

continuously at SMESs.

3. Expansion of employment opportunities for vulnerable groups

3-1. Expansion of female employment and support for work-family balance

3-1-1. Female employment

The labor force participation rate of women aged 15-64 in Korea stood at 55.6% in 2013 and

57.2% in September 2014, below the OECD average (62.6% as of 2013). Against this backdrop,

the government devised various policy measures to promote women's economic activities.


Age group 15~29 (young) 55~64 (elderly)

Participation rate 44.4% 51.4%

* Source: Statistics Korea, KOSIS DB

3-1-2. Promotion of decent part-time jobs

1) Background

It was recognized that there is a need to address the current employment practice uniformly

focused on full-time workers while promoting part-time jobs in order to increase employment

rate which is lower than other OECD countries. In order to increase low female employment

rate, work-family balanced part-time jobs need to be promoted to encourage women to

participate in the labor market more easily.

A decent part-time job refers to a job which allows workers to voluntarily work for shorter

hours than full-time workers dependent on the worker's own needs but without

discrimination in terms of working conditions when compared with full-time job. Decent

part-time jobs are better quality jobs than existing par-time jobs and the government is

carrying out policies to improve working conditions of the existing par-time jobs while

promoting the decent part-time jobs.

2) Implementation status

The government started consulting services(pilot projects) to promote part-time jobs in 2009

and developed and supported businesses leading part-time jobs engaged in regular work in 2010.

In 2012, the government provided 50% of wage(up to 400,000 KRW per month) for

employers who newly employed regular part-time workers(who are engaged in continued and

constant work) without fixed-term contract by reforming working system or developing new

part-time positions in order to support the promotion of work-family balanced part time jobs.

Forms of work should be diversified by promoting part-time jobs and addressing the current

employment practice uniformly focused on full-time workers in order to meet various

demands of the people, such as work-family balance, working and studying side by side, and

preparation for retirement, and to prevent waste of human resources.

In September, 2013, the government made enhanced efforts to spread decent part-time job

as a new employment trend in the labor market by establishing a support team for creation of


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decent part-time jobs(Sep. 2.). As a result, more businesses participated in a job fair for

decent part time jobs on Nov. 26. and female participation in the labor market is expanded.

In November, 2013, with plan for promotion of decent part-time jobs jointly announced

by relevant ministries, the public sector announced plans to increase decent part-time jobs for

government officials and also in government agencies, and the government increased the

maximum amount of support for labor cost and established projects for social insurance

premium support in order to promote decent part-time jobs in the private sector.

In October, 2014, follow-up measures for promotion of decent part-time job was announced

in cooperation with relevant ministries in order to enhance efforts for implementation of major

tasks in detail based on implementation results of existing measures. By making whole-of-

government efforts to improve an existing system and develop positions suitable for part-time

work, a system is established to provide financial support to an employer when a full-time

worker is turned into a part-time position in order to promote decent part-time jobs which can

be switched from full-time positions and customized to the needs of workers at workplaces.

3-1-3. Maternity protection and support for work-family balance

1) Support for wages and maternity leave before and after childbirth for maternity protection

Firstly, maternity leave of 90 days is given and the first 60 days of the leave are paid leave(paid

by employers). For workers at businesses which need support prior to other businesses, wages for

90 days of maternity leave before and after childbirth are granted and, for workers at

conglomerates, wages for 30 days of the leave are granted (up to 1.35 million won). For a mother

pregnant with twins or more, maternity leave before and after childbirth is increased to 120 days.

Second, as miscarriage or stillbirth leave was legislated, workers who had a miscarriage or

stillbirth are granted 5~90 days of miscarriage or stillbirth leave depending on their

pregnancy period and given miscarriage or stillbirth leave benefits.

2) Support for work-family balance

Male and female workers with a child aged 8 or under or who is under a second grader at an

elementary school can take parental leave for 1 year at maximum and, during the leave, 40%


of ordinary wages(up to 1 million won per month) is granted as wages. From October, 2014,

Father's Day is introduced to promote parental leave of male workers. When mother and

father take parental leave one after another for the same child, the second person who take the

leave will be granted 100% of ordinary wages(up to 1.5 million won per month) for the first

wage during the leave.

Secondly, from September, 2011, the government is promoting reduced working hours

during childcare period by paying wages for the period when a worker chose to work for

shorter hours although the worker can take childcare leave. From October, 2014, wages paid

during the leave is increased from 40% to 60% of ordinary wages in order to further promote

reduced working hours during childcare period.

Thirdly, from September, 2014, application for reduced working hours during pregnancy

period is introduced and working hours are reduced from 8 hours to 6 hours per day without

wage reduction for a female worker who is pregnant for 12 weeks or less or 36 weeks or over.

Forth, To promote women's participation in economic activities by easing their childcare burden

and to prevent them from leaving their work due to childcare responsibilities, the government

provides support to employers who establish and operate a workplace childcare center.

The government provides an employer with the maximum 300 million won when the

employer establishes a childcare center at workplace by himself and up to 1.5 billion won is

provided in case a childcare center is jointly established within an area concentrated with

SMEs. For operation of a childcare center, financial support is provided for labor cost of

teachers at the center (0.8~1.2 million won for 1 person per month) and for consumable text

books and materials (up to 5.2 million won per month).

3) Promotion of female employment

In an effort to expand female employment, subsidy for continued employment after

pregnancy and childbirth, subsidy for childcare leave, etc. and subsidy for employment of

substitute workers were consolidated into subsidy for employment security for women after

childbirth and during childcare. This subsidy is offered to an employer if he/she re-hires a

female contract worker or temporary agency worker who is pregnant or on maternity leave


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and thus helps to stabilize the employment of female non-regular workers during her

pregnancy or after childbirth. For a fixed-term employee, the employer will receive 400,000

KRW per month for six months and, for a non-fixed term employee, the employer will be

subsidized for up to one year - 300,000 KRW per month for the first six months and 600,000

KRW per month for the rest. In 2014, the scope of recipients, eligible for financial support for

employing substitute workers, is expanded to provide financial support for employing

workers to substitute workers on not only childcare leave but also maternity leave before and

after childbirth and the amount of support for SMEs is increased from 400,000 won to

600,000 won per month.

4) Support for women' re-employment

A total of 130 new job centers for women operate to help career-break women to find work

again. The centers provide career-break women with comprehensive employment services,

including group-counselling programs, vocational training, internship, job placement and post-

employment management. In addition, from August, 2014, special training courses are newly

established and under operation for highly educated women whose career is discontinued.

3-1-4. Efforts to address age discrimination

1) Affirmative action in employment

Affirmative action in employment refers to all measures and their accompanying

procedures tentatively taken by employers to eliminate existing discrimination between men

and women in employment or promote equal employment. It is a way of enhancing minority

representation without undermining merit- or performance-based systems.

Affirmative action was introduced in Korea with the revision of the Equal Employment Act

on December 30, 2005 and took effect on March 1, 2006. In 2014, a total of 1,945 workplaces,

including 304 government-invested and government-affiliated institutions and 1,641

businesses with 500 or more ordinarily-employed workers, were subject to affirmative action.

According to an analysis of the data on male and female workers by occupation and job

grade submitted by workplaces which are subject to affirmative action as of March 31, 2014,


the proportion of female employees and managers on average was up 1.05%p to 37.09% and

up 1.35%p to 18.37% respectively, compared to 2013.

The government has selected companies with outstanding performance in equal

employment (affirmative action in employment) and provides them with a variety of

administrative and financial support.

For enhancement of affirmative action, employment criteria for female employment, a

criteria to determine whether or not a business is subject to affirmative action, is increased

from 60% to 70% on average by industry in 2014 and industrial classification is broken down

to 30 from 26 in order to effectively reflect characteristics of industries. In addition, a system

is introduced to publicly announce a list of employers failed to implement the action.

2) Efforts to reform practices of gender discrimination in employment and to raise awareness

The government has strived to improve the quality of female employment by reducing

discrimination in employment and raising awareness of equal employment.

To this end, first, the Act on Equal Employment and Support for Work-Family Reconciliation

prohibits gender-based discrimination in every aspect of employment including recruitment,

hiring, wages, training, job assignment, promotion, retirement age, retirement and dismissal. To

ensure the enforcement of this Act, the government has carried out education and publicity

activities on employers' relevant obligations and conducted workplace inspections and guidance.

Second, in order to prevent sexual harassment at work and create a safe and sound workplace

culture, employers are obligated to provide sexual harassment prevention education while the

government implements support programs to prevent sexual harassment at work.

Third, in an effort to encourage enterprises to voluntarily reform their unequal employment

structures, to increase society's efforts and interest in developing and utilizing a female

workforce and ultimately to enhance women's rights and interests, the government has

designated May 25th~31st of each year as equal employment week.


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3-2. Support for promoting employment of the aged

3-2-1. Employment of the aged

Korea is one of the fastest aging countries in the world due to its low birth rate and longer life

expectancy. With the number of people aged 65 and over being 6.38 million (12.7% of the total

population) at the end of 2014, all of the cities and provinces in Korea have become an aging

society (i.e. people aged 65 or over account for more than 7% of the total population). Moreover,

Working age population(aged between 25~49) is continuously decreasing (20.587 million

persons in 2005 19.57 million persons in 2014), worsening the trend of aging population.

3-2-2. Creation of foundation for extending employment of the aged

1) Establishment and implementation of basic plan to promote employment of the aged

In December 2005, the government set up a task force comprised of relevant public officials

and private experts to create the foundation for longer and better employment of aged people

with competencies. And in September 2006, the government established and announced the

1st basic plan to promote employment of the aged, a five-year (2007-2011) plan to realize a

society in which capable elderly people can continue to work in quality jobs, regardless of

their age. As a consequence, during the period of the 1st plan, the employment rate of the

elderly increased by 3.8%p from 59.3% in 2006 to 63.1% in 2012.

In 2011, the government mapped out the 2nd plan to promote employment of the aged

(2012~2016) to complement the 1st plan and cope with ever-faster population aging. In step with

the vision of the 2nd plan, which is to create an environment where more of aged people can stay

in work longer, the government partially amended the Enforcement Decree of the Employment

Insurance Act in January 2012 to lower the wage reduction rate required for preferentially


2050204020302020201420102000

No. of those aged 65 or over 3,395 5,452 6,386 8,084 12,691 16,501 17,991

% of those aged 65 or over 7.2 11.0 12.7 15.7 24.3 32.3 37.4

(1,000 persons, %)

* Source: Statistics Korea, Future Population Estimates 2010

supported enterprises (SMEs) (from 20% to 10%). By doing so, it laid the foundation for

facilitating the adoption of the wage peak system by SMEs and strengthening related support.

2) Guidance on employment quota and delayed retirement

In order to promote employment of the aged, employers having 300 permanent employees

or more are required to employ aged people above the industry-specific employment quota

for the elderly and to submit a status report on the employment of the elderly and the

operation of their retirement system every year.

The Act on Prohibition of Age Discrimination in Employment and Aged Employment

Promotion was amended in April 2013 to make it mandatory for employers to set the

minimum retirement age at 60 or above and reform their wage systems accordingly. This

change will come into effect on January 1, 2016 for workplaces with 300 employees or more

and public institutions and on January 1, 2017 for workplaces with fewer than 300 employees

and the central and local governments. The change is meaningful in that it is an attempt to

respond preemptively to population ageing.

3) Subsidy for the wage peak system

The government offers subsidy for the wage peak system to workers in companies which

adopt the wage peak system under which older workers are guaranteed employment for a certain

period in return for wage reduction based on their age and the number of years worked. The

wage peak system can be implemented in three forms: extending retirement ages, reemploying

workers after retirement and reducing working hours. In October, 2014, 11.838 million won is

provided as financial support for wage peak system for 2,618 workers at 283 workplaces. From

January, 2014, the government reformed the subsidy system for the wage peak system,

alleviating requirements to apply for wage decrease and increasing the maximum amount of

support from 6 million won to 7.2~8.4 million won for those who choose to extend retirement.


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Oct. 2014Oct,2013201220112010200920082007

Labor force participation rate 62.0 61.8 61.8 62.7 63.7 64.7 65.7 67.5 68.2

Employment rate 60.6 60.6 60.4 60.9 62.1 63.1 64.3 66.1 66.6

Unemployment rate 2.2 2.0 2.4 2.9 2.5 2.5 2.1 2.0 2.3

(%)

3-2-3. Support for employment of the aged

1) Subsidies for extended employment of the aged

To promote and retain employment of the elderly, the government has provided subsidies to

employers who are employing the aged at a given rate or higher, continue to employ retirees or

raise the retirement age. In 2013, the government paid 57,814 million KRW in subsidies for

extended employment of the aged, benefiting 215,964 aged workers in 15,443 workplaces.

Projects for employment extension of the aged are subsidy for retirement extension ,

subsidy for reemployment of retirees , subsidy for employing many of the aged , and

subsidy for employment of the aged over 60 .

2) Loans for improving employment environment for the aged

Since 2006, the government has been providing loans to employers who intend to install or

upgrade facilities and equipment to stabilize and promote employment of the aged. In 2013, a

total of 5,432 million KRW was loaned to 23 companies.

3) Job placement services

Job placement services are provided to jobless elderly people through Job Centers under the

Ministry of Employment and Labor, 53 Senior Citizen Talent Banks and 28 Job Hope Centers

for Middle-Aged and Old People.

Senior citizen talent banks provide employment services to elderly job seekers with relatively

lower employability (53 talent banks in 2014). To improve the quality of their employment

services, the government provided competenency-enhancing education to personnel in charge,

and introduced a performance-linked management system, such as providing differentiated

support for their project operating costs for the following year according to performance.

In 2013, existing outplacement service centers run by the Korea Labor Foundation and job

centers for experienced professionals run by business associations, etc., were merged together

to create Job Centers for Middle-Aged and Old People.


Job Centers for Middle-Aged and Old People provide comprehensive outplacement

services, including re-employment, business start-up and life planning services, to enable

(prospective) retirees aged 40 or over to plan their second career. In 2013, 85,100 people had

applied to receive the services and 23,782 of them had succeeded in finding work.

4) Support for internship program of the middlge-aged

Since 2013, the government has implemented an internship program for the middlge-aged.

Under this program, unemloyed people aged 50 or over are given internship opportunities at

companies to connect them to regular jobs.

If an employer hires middle-aged jobless person as an intern, 50% of the wage (up to 800,000

KRW a month) is subsidized for four months of the internship period. If the intern is converted

to regular employment, 650,000 per month is paid additionally for six months. In 2013, 6,518

people had been hired as interns, and 4,111 of them had been converted to regular employment.

3-2-4. Support for social contribution jobs

Since 2011, the government has implemented the program to support social contribution jobs.

This program is designed to connect middle-aged or old retirees with expertise and work

experience to social enterprises and non-profit organizations, thereby spreading social services and

coping effectively with population aging. Social service jobs are a new job model combining paid

work and voluntary activities. Program participants are paid actual expenses (for meals,

transportation, etc.) and participation allowances (2,000 KRW per hour). As of the end of October

2014, 2,297 participants had performed social contribution activities in 600 organizations.

3-3. Support for promoting employment of the disabled

3-3-1. Employment of the disabled

As of the end of 2013, 27,349 workplaces (313 central and local governments, 295 quasi-government

agencies, 268 public institutions and 26,473 private companies) obligated to hire people with disabilities

were employing 153,955 people with disabilities, achieving an employment rate of 2.48%. Until 2009,


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for the purpose of calculating employment rates, all people with disabilities were considered the same

whether their disabilities were mild or severe. However, from 2010, with a view to promoting

employment of severely disabled people, one person with severe disabilities is calculated as two disabled

people (under the double counting system for workers with severe disabilities). The number of

employed people with disabilities at the end of 2013 was up 11,933 from 142,022 at the end of 2012.

3-3-2. Expansion of mandatory employment of the disabled

With a view to promoting employment of people with disabilities, the central and local

governments, public institutions and private companies with 50 or more ordinarily-employed

workers are mandatorily required to employ people with disabilities at a given proportion of the

total ordinarily-employed workers (3% for government agencies, 3% for public institutions,

2.7% for private companies). If an employer hiring 100 or more workers fails to meet the

mandatory employment quota, a disability employment levy of 670,000 KRW per month per

person falling short of the target is imposed on the employer.

Moreover, in order for the public sector to set a good example in employment of the

disabled, the mandatory employment quota for the central and local governments was

increased from 2% to 3% in 2009 and, later in 2010, the quota for public companies and

quasi-government agencies was also increased from 2% to 3%. Mandatory employment rate

is gradually increased from 2010 and adjusted to apply 3% and 2.7% to other public

institutions and private businesses, respectively, in 2014.

Thanks to these efforts, the proportion of disabled people employed in workplaces subject to the

mandatory employment quota rose to 2.48% in 2013, more than five times higher than 0.43% in

1991 when the mandatory employment system took effect. The number of disable people employed

under the system also increased more than 13-fold from 10,462 in 1991 to 153,955 in 2013.


2013201220112010200920081991Year

0.43 1.73 1.87 2.24 2.28 2.35 2.48Employment rate of disabled people

3-3-3. Stronger support for employment of the disabled

1) Support for the establishment of subsidiary-type standard workplaces

In 2008, the government introduced the subsidiary-type standard workplace system which

would help to expand employment of people with severe disabilities and offer companies a

new way to comply with their obligation to employ disabled people.

In order to further expand stable jobs for people with disabilities, the government introduced

tax credits for standard workplaces employing disabled people: employers who were

acknowledged as running such a standard workplace no later than December 31, 2016. For

employers acknowledged by Dec. 31, 2016, 100% of corporate tax and income tax are exempted

up to the first 3 years and then 50% of the tax exemption will be given for the following 2 years.

2) Support for assistive devices for the disabled

Ever since the program to provide assistive devices to the disabled was introduced in 2004,

the government has provided assistive devices and related repair services and developed new

assistive devices to complement disabled people's abilities to work. As of October, 2014, the

government provided 5,534 assistive devices to 1,841 workplaces, contributing to resolving

difficulties felt by the disabled in performing work because of disabilities.


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Organization Employment rateDisabled workersOrdinarily employedworkers

Total 27,349 7,499,665 153,955 2.48

Public officials 313 836,367 19,275 2.63

Employees 295 269,640 7,082 3.51

Public 268 310,461 7,764 2.81

Private 26,473 6,083,197 119,834 2.39

(Workplaces, persons, %, as of end-Dec. 2013)

Government

Businesses

3-3-4. Provision of customized and specialized vocational training and employmentservices

1) Expansion of customized training

Customized training is provided in close connection with companies throughout the entire

process ranging from the designing of training courses to job placement to foster human

resources suited to companies' needs. As of the end of October 2014, 612 people had

completed such training and 537 or 87.8% of them had succeeded in finding work.

2) Specialized training by type of disability

Specialized training by disability type aims to cultivate people with disabilities (visual or hearing

impairment, brain lesions or intellectual or mental disorders) into competitive human resources by

developing jobs and providing training suited to their type of disability. In 2013, specialized training

had been provided to 352 disabled people, and 300 of them had gained employment.

3) Stronger support for people with severe disabilities

For people with severe disabilities whose working ability is greatly impaired, the

government has offered subsidized employment and other supports to promote their

employment. Subsidized employment refers to efforts to help people with severe disabilities

adapt themselves to working life with the assistance of a work guide. The number of

beneficiaries of this program was 2,844 in 2013, 2,144 at the end of October 2014.

3-4. Successful implementation of the Employment Permit System for foreign workers

3-4-1. Current status

In order to protect employment opportunities for native Koreans, resolve labor shortages in

SMEs and prevent infringements upon the human rights of foreign workers, the Act on

Foreign Workers' Employment, etc., was announced on August 16, 2003, and the

Employment Permit System (EPS) was launched in August 2004.


For efficient management of the non-professional foreign worker introduction system, the

government abolished the existing industrial trainee system, and integrated the non-

professional foreign worker introduction system into the EPS. Moreover, as part of an effort

to embrace Koreans living abroad, the government also introduced the Working Visit System

which offers Koreans living in China and the former Soviet Union an opportunity to visit

freely and find work in Korea.

As of September 2014, about 486,000 foreign workers (210,000 workers through the

general EPS(E-9), 276,000 through the working visit system(H-2)) are working in Korea

under the EPS for foreign workers.

3-4-2. Contents

First of all, the EPS for foreign workers is mainly aimed at providing foreign workers to

SMEs suffering a shortage of native Korean workers. To that end, every year, the Foreign

Workforce Policy Committee (Chairman: head of the office of the Prime Minister) determines

the number of foreign workers to be invited to work in Korea, the kinds of jobs permitted for

foreign workers, etc. by taking into consideration Korea's economic conditions, employment

situation, businesses' demand for foreign workers, etc.

Second, for prevention of corruption in the process of sending workers and transparent

operation of foreign worker selection & introduction process, the Korean government has

signed MOUs aimed at improving transparency and efficiency of the sending process. The

public sector is in charge of selecting and introducing the foreign workers to be invited to

work in Korea while the private sector is excluded from the process. Currently, 15 countries

including Vietnam, Thailand, the Philippines, Indonesia, etc. have been designated as worker-

sending countries through MOUs.

Third, the government is drawing up protective measures for foreign workers according to the

relevant laws and regulations including labor law, etc. The article 22, etc., of the Act on Foreign

Workers' Employment, etc., (hereinafter, Foreigner Employment Act) clearly stipulate that

foreign workers receive equal treatment with native Korean workers according to social

insurance and labor relations act such as health insurance, employment insurance, industrial

accident insurance, minimum wage, labor standards act, etc. In particular, considering the fact


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that foreign workers are usually working for small businesses, the government is providing

stronger preventive measures to cope with overdue wages, accidents outside the workplace, etc.

by making it compulsory to take out departure guarantee insurance, return cost insurance, etc.

3-4-3. Major achievements

First, the EPS has helped to reduce labor shortages of SMEs by legally providing foreign

workers without encroaching on job opportunities for native Koreans. More specifically, 85.7%

of general foreign workers were employed in workplaces with less than 30 employees, which

are shunned by Koreans, indicating that the EPS is making substantial contribution to SMEs.

Second, the EPS has also contributed to the protection of rights and interests of foreign

workers and to the tremendous improvement of transparency in the process of sending

foreign workers. In other words, the government put an end to discrimination against foreign

workers by applying Labor Relations Acts such as the Labor Standards Act, Minimum Wage

Act, etc. to foreigners just as they are applied to native Koreans. Moreover, the public sector

took charge of worker selection and introduction, thereby improving the publicity and

transparency of the process which resulted in reduction of corruption.

Third, the EPS also enhanced Korea's standing on the world stage by providing an

exemplary model for foreign worker management. Particularly in 2011, in recognition of its

innovation, Korea was selected as the United Nations Public Service Award 1st winner under

the category of Preventing and Combating Corruption in the Public Service.

Fourth, the government is constantly collecting views from foreign workers in Korea and

their employers to improve its institutions in a way that satisfies both the employers and

workers. To ensure continued employment of foreign workers, the government gives

employers autonomy to determine the term of work contract within the boundaries of sojourn

period (three years). When an employer rehires a foreign worker, the worker no longer has to

leave Korea for one month, as was the case in the past, and the employment can now last up

to five years. In addition, to support reemployment of foreign workers who change

workplaces, the job-seeking period has been extended from two to three months, thereby

alleviating difficulties for both foreign workers and their employers.


Fifth, in order to offer greater support to foreign workers during their stay in Korea, the

government opened counseling centers for foreign workers in 2011 to provide labor affairs-

related counseling in ten languages including Vietnamese, etc. Moreover, in order to provide

on-the-spot service, 27 foreign-worker support centers have been established in small and

medium sized cities (Yeongam, Yeosu, Wonju, etc.) in addition to the 8 existing main centers

(Seoul, Uijeongbu, etc.). The services available in those centers include counseling for

foreign workers who suffer from cultural differences and a language barrier and the classes

on the Korean language, practical law and the Korean culture.

4. Creating decent jobs by fostering social enterprises

4.1. Background

To address the continuing phenomenon of jobless growth and increased demand for social

services in the 2000s, discussions began in earnest on whether to introduce the European

social enterprise system. In the process, detailed discussions were carried out to introduce

social enterprise as a model for creating stable jobs and providing quality social services

through non-profit corporations/organizations. Consequently, in 2007, the social enterprise

system was introduced, and to foster social enterprises more systematically, the Act on the

Promotion of Social Enterprises was promulgated with broad public support.

4.2. Overview of social enterprises in Korea

Social enterprises refer to organizations that pursue the ultimate goal of supporting social

purposes while engaging in sales activities such as production and sale of goods and services,

etc. Social enterprises provide employment opportunities to disadvantaged people, thereby

facilitating their integration into the labor market, and use their profits to create sustainable

jobs. Furthermore, since social enterprises are closely interrelated with local communities,

they can identify and meet new service needs that are hardly recognizable to the national

government, and contribute to the financial soundness of the government through realization

of welfare through work.


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Through 36 rounds of certification carried out from October 2007 to November 2014, 1,186

social enterprises were authorized and 26,959 persons were employed. Among them, 15,240

were from disadvantaged groups such as the disabled, the elderly, etc.

4.3. Government support for social enterprises

4.3.1. Support by the central government

First, social enterprises are entitled to tax holidays and relief on social insurance premiums in

accordance with the applicable law. More precisely, they benefit from a 50% reduction of or

exemption from corporate and income tax for the first five years of operation while companies

which donate to social enterprises may count the donated amount as an expense for up to 10%

of total corporate income. Additionally, in 2014, social enterprises that do not receive financial


Provision ofsustainable

jobs

integrate disadvantaged people intolabor marketincrease rewarding and decent jobs

Promotion oflocal

communities

integrate local communitiesdevelop local economy throughincreased social investment

Expansion ofsocial

services

meet new demand for public servicesinnovate public services

Achieve a sustainable economy and social integration by fostering social enterprises

Promotion ofethical

markets

promote corporate social contributionand ethical corporate managementcreate a culture of ethical consumption

[Functions of social enterprise]


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ore and better jobs

support from the government are to be given subsidies to cover employer-paid social insurance

premiums for up to 98,000 KRW per employee every month for four years.

Second, public institutions give preferential treatment to goods and services produced by

social enterprises in procurement, providing a protected market for social enterprises. To

make preferential purchases more effective, the government has announced its purchase

amounts and plans since 2013. As a result, the amounts of preferential purchases for 2013

reached 263.186 billion KRW, 4.5 times higher than 58.442 billion KRW in 2009.

Third, to keep supporting social enterprises' business innovation, the government supports

up to three professionals in fields, such as planning and marketing, at social enterprises. As of

late August 2014, the number of recipients was 623, about twice as high as 310 in 2011.

Fourth, the government also provides advice and business consulting in association with local

experts and outstanding managers (on a pro-bono basis) and operates academies and educational

programs for social entrepreneurs as well as social venture contests and young social entrepreneurs

nurturing programs, with a view to promoting entrepreneurship and social enterprises.

4.3.2. Efforts by the local governments

Most local governments have established ordinances and basic plans for promoting and

supporting social enterprises. As of late June 2014, 1,327 organizations have been designated

and operated as candidates for local social enterprises customized for local characteristics.

4.4. Policy direction for promotion of social enterprises

The government is planning to create jobs and pursue social values by developing new

types of social enterprises in various sectors, and, at the same time, efforts will be also made

by the government to reform and enhance support systems for social enterprises in order to

improve self-reliance of the enterprises, thereby achieving sustainable growth. In that sense,

the government will focus on promoting social investments by creating financial and capital

markets needed for the stable growth of social enterprises.


1. User-oriented tailored employment services

1-1. Strengthening employment services aimed at matching job seekers with jobs

Employment services are a country's core infrastructure that supports individuals' career

development throughout their lives, companies' business activities and efficient utilization of

national human resources by providing employment information, job placement services,

vocational guidance, support for vocational skills development, etc., in a comprehensive

manner. The Korean government has made the advancement of employment services a

national policy task and has been pursuing efforts to innovate employment services. Such

efforts have resulted in expanded infrastructure for public employment services and an

increase in the number of people receiving services from, or employed through, Job Centers.

1-1-1. Reinforcing Job Centers' employment services

In order to connect job seekers directly with potential employers, Job Centers have

provided various job-matching services, including holding meetings between job seekers and

employers, offering recruitment services and accompanying job seekers to interviews. As of

October 2014, 72 Job Centers had provided such services on 9,597 occasions, and 10,645

businesses and 58,848 job seekers had participated, resulting in 10,241 people finding work.

I Employment & Industrial Relations MeasuresIII Creating Vibrant Workplace through Tailored EmploymentServices and Vocational Skills Development

No. of successful job seekers

No. of job seekers

No. of businessesFrequencyProgram

Total 9,597 10,645 58,848 10,241

Job seeker-employer meeting 1,918 4,577 41,890 6,677

Accompanied interview 4,408 4,678 13,889 2,283

Recruitment services 3,271 1,390 3,069 1,281


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ore and better jobs

In addition, Job Centers have consistently improved their employment service programs. As

a result, the number of people employed through Job Centers increased in 2014 compared to

the previous year.

1-1-2. Setting up a comprehensive job information network

Work-Net, a national jobs portal, was set up and operates to help Job Centers provide job-

matching services. Since July 2011, the government has expanded Work-Net by linking it to

other public and private job information networks to create a comprehensive job information

network. The government has also expanded the employment service network by reinforcing the

service infrastructure of Job Centers and in collaboration with local governments and relevant

institutions. Moreover, it completed the work of linking Work-Net to specialized private job

information networks, such as Find Job, Nurse Jobs, Media Jobs and Designer Jobs (May 2014).

In addition to 12 local Work-Nets already in place for metropolitan cities and provinces,

110 new ones were set up for lower-level administrative units, making job information

available across the country (Dec. 2014). The functions of Work-Net were also largely

improved to provide services tailored to each target group. Improvements include creating

Work-Net pages dedicated to decent part-time jobs (Mar. 2014) and small giants (May 2014),

starting mobile Work-Net services for young people (Jun. 2014) and launching services

related to the employment type disclosure system (Jul. 2014).

1-1-3. Employment and welfare plus centers

As various forms of complicated employment services have recently spread across the

private sector, there have been calls for the public sector to provide one-stop services. In

particular, the importance of offering employment and welfare services, which are closely

related to people's lives, in an integrated manner has become more apparent. Hence, the

government introduced employment and welfare plus centers, a spatially integrated model in

which different employment and welfare service providers offer their services together in one

place in order to deliver user-oriented services and enhance users' convenience and the

government's administrative efficiency. The first employment and welfare plus center in Korea

was opened up in Namyangju (Jan. 6, 2014) after discussions conducted by relevant central

government agencies (Ministry of Employment and Labor, Ministry of Health and Welfare,

Ministry of Security and Public Administration and Ministry of Gender Equality and Family),

local governments (Gyeoggi province and Namyangju city) and private organizations

(Namyangju YWCA and YMCA).

As the Namyangju employment and welfare plus center drew much attention, the National

Economic Advisory Council made a related report (Nov. 28, 2013) and the Social Security

Committee came to a decision to spread employment-welfare centers (Dec. 24, 2013). It was

decided that 10 employment and welfare plus centers would be set up in 2014 after a demand

survey and an on-site review of lower-level administrative units.

Meanwhile, as a result of operating the Namyangju employment-welfare center, it was

found that the spatial integration of employment and welfare services generates synergy. The

number of people visiting the job centers dedicated for women(Sae-il centers) and the local

government-run job center involved in the employment-welfare center rose by 163% and

26%, respectively. Also, the number of people employed through the Job Center, th

Empleo y políticas laborales en Corea 2014

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