Dr. Sang Hyon Lee Korea Employment Information Service
(KEIS)
Employment Insurance System of Korea Dec. 2014 Dr. Sang Hyon Lee
Korea Employment Information Service (KEIS) Job Matching Service
Vocational Counseling,
Skill Development, Youth Employment Subsidy, Internship University
Job center, Job Success Package Program Objectives and Effects of
EI
Maintain standard of living for the unemployed Social justice for
vulnerable groups in the turbulent economy - Provide time to find
new jobs Assistant unemployed workers find jobs Stabilize economy
during recession, bigger economy by providing money to spend for
the unemployed - Decrease social costs of unemployment - Promote
better utilization of labor force - Encourage employers to
stabilize employment Help employers maintain a skilled work force
Give a chance to develop employment services and vocational
training delivery system The purpose of employment insurance is to
seek
to prevent unemployment, promote employment and develop and improve
the vocational skills of workers, to strengthen the nations
vocational guidance and job placement capacity and to stabilize the
livelihood of workers and promote their job-seeking activities by
granting necessary benefits when they are out of work, thereby
contributing to the economic and social development of the nation.
(Employment Insurance Act, Article 1) III - Four main programs of
EI
- Employment Security Program - Vocational Skill Development
Program - Unemployment Benefits - Job Matching Services and Career
Counseling Employment Insurance The Employment Insurance (EI)
System of Korea was introduced on July 1, 1995 to prevent
joblessness, promote employment and improve workers' vocational
skills. > In 1960s and 1970s : Unemployment Assistance(UA) >
In early 1980s : Unemployment Insurance(UI) > In early 1990s :
Employment Insurance(EI) + Employment Insurance Research Commission
(EIRC) + EI Law passed December 1, 1993 > Several Issues over EI
introduction + Types of Social Safety Net (SSN) of the Unemployed +
Unemployment Insurance(UI) or Employment Insurance(EI) + Coverage +
Vocational Skill Development Program and the In-plant Training Levy
System + UB and the Legal Severance Payment System + Administration
Body + Financing of EI administration Employment Insurance It is
also aimed at securing a stable livelihood and supporting early
employment by paying benefits needed for living in case a worker
loses his or her job. - The EI is a comprehensive labor market
policy and a social security system including employment security
and vocational skills development programs aimed at preventing
unemployment and promoting employment as well as a traditional
unemployment insurance program providing unemployment benefits. -
Merits of Korean EI > Combination of Active Labor Market
Programs(Employment Security Program, Vocational Skill Development
Program) and Unemployment Benefit > Short period of UB (90~240
days) > Early Reemployment Allowance > Assistance for
Training the Unemployed > Suspension of UB on refusal of job
placement service, vocational training order, etc. Employment
Insurance Coverage
Since October 1998, all workplaces with one or more employee have
been subject to the Employment Insurance System. Excluded from
coverage are unincorporated businesses with four employees or fewer
in the agricultural, forestry, fishery or hunting industries;
construction projects conducted by individuals whose total
construction cost is less than 20 million KRW; construction
projects which are undertaken to construct or renovate on a large
scale a building with a total floor area of 100 or less; and
housekeeping services In principle, the EI should apply to all
workers at businesses covered by the EI. However, due to
difficulties in managing insurance work and/or unique occupational
characteristics, the following people are excluded from EI
coverage: people who are employed or start up their own businesses
after the age of 65 or over (except for employment security and
vocational skills development programs); people whose monthly
working hours are less than 60 hours (including those whose weekly
working hours are less than 15 hours); public officials (optional
coverage for special and contract public officials); and so on.
Does not covering Employees in Very Small Enterprises andInformal
Sectors (daily workers, part-time workers, etc.) Employment
Insurance Coverage
Business Insured Total Created Loss Gender Aquisition Male Female
2004 1,002,638 472,190 310,418 7,481,618 4,957,284 2,524,334
3,734,937 3,334,909 2005 1,148,474 607,766 417,033 7,965,597
5,241,103 2,724,494 4,232,228 3,685,378 2006 1,176,462 689,734
659,593 8,436,408 5,510,717 2,925,691 4,397,632 3,860,139 2007
1,288,138 778,967 652,456 8,941,639 5,773,949 3,167,690 4,609,512
4,025,285 2008 1,424,330 874,199 757,317 9,271,701 5,936,950
3,334,751 4,802,266 4,409,950 2009 1,385,298 826,907 880,930
9,653,678 6,083,853 3,569,825 5,177,050 4,722,915 2010 1,408,061
811,231 807,487 10,131,058 6,310,423 3,820,635 5,601,393 5,112,336
2011 1,508,669 874,443 803,536 10,675,437 6,569,800 4,105,637
5,946,960 5,392,169 2012 1,610,713 957,420 891,161 11,152,354
6,784,700 4,367,654 6,045,986 5,590,642 2013 1,747,928 975,724
872,901 11,571,213 6,971,699 4,599,514 6,075,728 5,616,445 Total
Population 50,000,000, No of Employed 25,979,000, No of Unemployed
912,000 Income and Expenditure of Employment Insurance
(thousand USD) 2013 2014 Income 9,541,136 11,291,046 Expenditure
Employment Policy 4,244,996 4,520,566 Skill Development 1,340,463
1,458,823 Employment Equality 866,337 958,608 Disability Employment
Promotion 3,000 2,850 Administration 104,342 107,299 Reservation
Fund 2,981,998 4,242,900 Expenditure Total 1,1291,046 Reservation
Fund Employment Insurance
(Million USD) 2008 2009 2010 2011 2012 Reservation Fund 82,113
62,464 50,174 46,816 53,078 Earnings rates 2.02% 14.80% 9.36% 1.20%
4.91% Businesses and workers excluded from coverage
Unincorporated businesses with four or fewer ordinarily employed
workers in the agricultural, forestry, fishing or hunting
industries Construction work carried out by those other than
housing constructors, whose total cost is less than 20 million KRW
or which is undertaken to construct a building with a total floor
area of 100m2 or less or renovate a building with a total floor
area of 200m2 or less Domestic service Those who are employed or
starts up their own businesses after the age of 65 or over (except
for employment security and vocational skills development programs)
Those whose monthly working hours are less than 60 hours (including
those whose weekly working hours are less than 15 hours) Public
officials and those subject to the Private School Teachers Pension
Act (Optional coverage for special public officials) - Special
postal workers EI coverage for the self-employed
- Amendments to the Employment Insurance Act and the Act on the
Collection of Premiums, etc. of Employment Insurance and Industrial
Accident Compensation Insurance, which would allow self-employed
people to opt into the unemployment benefit program, were passed at
the National Assembly, and the EI (unemployment benefits) for
self-employed people took effect on January 22, 2012. Premium rates
EI premium rates are divided into the rate for employment security
and vocational skills development programs and the rate for
unemployment benefits. In July 2013, the rate for unemployment
benefits was raised from 1.10% (0.55%, each from employer and
employee) to 1.30% (0.65% each from employer and employee).
preventing unemployment and promoting employment;
Purpose and programs of EI Purposes of EI preventing unemployment
and promoting employment; - strengthening development of job skills
of the labor force and efficient job placement services; and -
providing financial assistance to displaced workers. -Five main
programs of EI - Employment Security Program - Vocational Skill
Development Program - Unemployment Benefits - Maternity Protection
Program Employment Security Programs
The employment security program is in place to guarantee job
security for workers in response to technological advances and the
changing industrial structure while providing reasonable support to
employers' efforts for employment adjustment. Unlike unemployment
benefits, this program is an active labor market policy to cope
actively with changing labor market conditions. 5 sub-programs of
Employment Security Programs - Employment Creation Assistance
Employment Adjustment Assistance - Regional Employment Stimulation
Grants - Employment Promotion Assistance - Labor Market Information
and Job Placement Service(KEIS) Employer subsidies 12 13 Plan 14
Plan
Employment Security Programs (thousand USD) Employer subsidies 12
13 Plan 14 Plan Employment Adjustment Subsidy 33,643 53,243 49,998
Employment Stimulation Subsidy 47,892 39,057 30,487 Employment
Creation subsidy 22,091 47,662 113,203 Employment Security Subsidy
15,024 11,414 1,000 Construction worker subsidy 17,033 21,885
14,283 SME Youth Internship 63,082 87,385 108,441 Occupational
Information 5,805 6,024 5,941 Labor market information 2,867 3,566
2,962 Employment Projection 1,286 1,566 Employment Systems 27,589
37,957 30,379 Employment Adjustment Assistance
The Employment Adjustment Assistance program is intended to
minimize unemployment by subsidizing employers who make efforts to
maintain employment in spite of temporary managerial difficulties
Employment sustain Temporary shutdown subsidy Subsidy level
2/3(priority )or 1/2of wage Lower than 50% of wage Limit No
limitation Committee decide Upper limit of subsidy 40,000 won/day
Duration 180 days per year Reasoning for Adjustment Criterion Time
1 month before Stock of production Increased more than 50%
Production Decreased more than 15% Decreased more than30% Sales
Trend of sales and production and sales Keep declining (more than
20%) Localmarket condition Decided by PES officer Pre requirement
Non (Shut down) Approved by labor committee (Vacation)More than 3
months of shutdown Employment Creation Assistance
The program subsidizes employers who have increased the number of
employees by reducing working hours, reforming shift system,
improving working conditions, hiring highly skilled workers.
(thousand USD) 2012 2013 Plan 2014 Plan Plan Addition Total 22,091
47,662 113,203 Work together Subsidy 2,789 12,888 78,316 Venture
Subsidy 1,523 3,030 3,650 Hiring professional 2,975 7,387 3,823
Employment environment Improvement 12,756 22,685 25,788 others
2,228 1,672 1,626 Unemployment benefits
- Unemployment benefits are paid for a given period of time to
promote the reemployment of the unemployed by stabilizing their
livelihoods and that of their families and systematically providing
them with information on job vacancies. Unemployment benefits is
mainly composed of job-seeking benefits, extended benefits and
employment promotion allowances. Job-seeking benefits To be
eligible for job-seeking benefits, workers should be insured for at
least 180 days during the 18 months prior to getting out of
employment at a covered business. The benefit duration varies from
90 to 240 days depending on the contribution period and age at the
time of job loss. 50% of the previous average wage
- max/day : 40,000 KRW - min/day : 90 % of the hourly minimum wage
Benefit duration less than 1 yr 1~less than 3 yrs 3~less than 5 yrs
5~less than 10 yrs 10 yrs or more younger than 30 90 120 150 180
30~younger than 50 210 50 or older or the disabled 240 Job-seeking
Allowance
(thousand USD) Applied EI Benefit Total JSA ERB Sick Leave
Qualified No Payment 2004 471,542 467,730 707,432 1,448,306 619,420
1,327,384 81,419 114,859 6,340 6,025 2005 565,753 562,524 812,768
1,751,974 706,645 1,602,875 99,925 143,209 5,801 5,839 2006 612,667
609,691 943,542 2,074,004 816,692 1,834,039 121,232 234,116 5,179
5,785 2007 687,765 685,024 1,009,180 2,434,032 855,749 2,117,168
147,688 310,475 5,307 6,326 2008 838,783 835,140 1,162,534
2,865,256 981,985 2,466,521 174,403 391,613 5,436 6,867 2009
1,073,989 1,068,389 1,528,407 4,116,404 1,299,567 3,589,872 221,389
517,083 6,585 8,921 2010 978,575 973,026 1,336,439 3,686,530
1,236,985 3,477,987 91,864 198,663 6,864 9,386 2011 906,422 902,362
1,278,106 3,561,353 1,163,732 3,337,080 107,472 214,555 6,353 9,296
2012 901,588 898,054 1,267,427 3,676,666 1,146,106 3,431,424
114,006 234,374 6,816 10,429 2013 922,401 919,118 1,290,686
3,883,507 1,162,387 3,611,415 120,486 259,631 7,349 11,991
Eligibility requirements
The person should be insured for at least 180 days during the 18
months prior to unemployment at an EI-covered workplace; The person
has failed to gain employment although he/she is willing and able
to work; and voluntary unemployment and dismissal due to one's
serious faults are excluded. The person is actively seeking
reemployment. (thousand USD) 2010 2011 2012 No. of beneficiaries
Amount paid Job-seeking benefit 1,213,059 3,487,576 1,142,420
3,346,591 1,127,455 3,442,031 Extended benefits Employment
promotion allowances Job-seeking Allowance
(thousand USD) 2010 2011 2012 No Amount Training Extended Benefit
40 118 23 77 19 70 Individual ExtendedBenefit 4,615 6,816 2,671
4,066 1,575 2,496 Nation Wide Job Searching Allowance
Job-seeking Allowance (thousand USD) 2011 2012 No Amount Early
Reemployment Allowance 107,471 214,555 114,006 234,374 Skill
Development 14 4 12 5 Nation Wide Job Searching Allowance 23 1 9
0.4 Moving Allowance 226 203 212 255 Maternity protection
program
When a female worker gives birth, her employer should grant her
maternity leave of 90 days (Even in the case of miscarriage or
stillbirth, miscarriage or stillbirth leave of up to 90 days
(depending on her pregnancy period) should be granted.). The amount
of maternity leave (miscarriage or stillbirth leave) benefit should
be equivalent to the ordinary wage under LSA on the start date of
the leave, but if the ordinary wage of the worker concerned is
larger than 1.35 million KRW, the worker shall be given 1.35
million KRW in maternity leave benefits. (thousand USD) 2010 2011
2012 No. of beneficiaries Amount paid Job-seeking benefit 41,732
178,121 58,137 276,261 64,069 357,798 Childcare leave benefits
Benefits for reduced working hours for childcare Maternity Leave
Benefit
(thousand USD) No Amount 2003 32,133 33,522 2004 38,541 41,610 2005
41,104 46,041 2006 48,972 90,886 2007 58,368 132,412 2008 68,526
166,631 2009 70,560 178,477 2010 75,742 192,564 2011 90,290 232,915
2012 93,394 241,900 Parental Leave Benefit
Number Amount (1000 USD) Benefit/M Total Female Male 2003 6,816
6,712 104 10,576 300 USD 2004 9,303 9,122 181 20,803 400 USD 2005
10,700 10,492 208 28,242 2006 13,670 13,440 230 34,521 2007 21,185
20,875 310 60,989 500 USD 2008 29,145 28,790 355 98,431 2009 35,400
34,898 502 139,724 2010 41,732 40,913 819 178,121 2011 58,134
56,732 1,402 276,261 40% wage 2012 64,069 62,279 1,790 357,798
Skill development 1995 The Introduction of the Employment Insurance
System Vocational Skills Development Project 1998 Training for the
unemployed after financial crisis In 2004, the government
established the Workers Vocational Skills Development Act, thereby
setting up the framework for life-long skills development covering
every stage of workers' lives. In addition, the government set up
'the initiative to build a market-friendly vocational skills
development system' in May 2009, thereby creating a demand-
oriented vocational skills development system. Introduction of
Individual Training Account System In the following years, policy
resources were directed towards vocational skills development
linked to workplaces and, consequently, human resources development
was reinforced in new growth engine sectors. In 2012, the
government devised 'the 2nd basic plan for vocational skills
development' which consisted of a variety of specific policy
actions to materialize the vision of 'the skill-valued society for
co-existence and shared growth Skill development Vocational skills
development program Training for
the employed (upgrade training) Training for the unemployed
(initial training) Training for national key & strategic
industries Vocational training for job seekers Local Governments
Vocational training for the unemployed in farming & fishing
communities Public vocational training (Polytechnic colleges/KUTE)
(training for industrial workforce) Employer Subsidy Training
Employee Subsidy Training Employer subsidy Training SME Target
subsidy - National Consortium Training - SME Core competency -
Learning organization - Systemic OJT Individual Training Account
Study and training loan Types and target groups of vocational
skills development training
Category Type Target Group Training for the employed . Subsidy for
employer-fund skills development . Subsidy for employee job skills
upgrading . Loans for workers' school and training expenses All
workers Vocational training for SMEs . Support for Consortium for
HRD Ability Magnified Program (CHAMP) . Support for learning
organizations at SMEs . Support for upgrading core job skills for
SMEs SME workers Training for the unemployed and non-regular
workers . Training under the Individual Training Account System .
Loans for living costs during vocational training Job seekers
Employment promotion training . Vocational training for the
unemployed in local areas Farmers and fishermen, low-income
individuals, etc. Training to foster workforce . Training to foster
craftsmen . Training for national key/ strategic industries
Unemployed people, young people who do not go to higher education,
etc. - Budget for skill development in 2014 is 1.4 billion
USD
12 13 Plan 14 Plan Total 1,079,823 1,340,463 1,458,823 Employer
subsidy 325,459 348,914 399,554 Employee and unemployed 217,236
277,930 285,719 National key &strategic industries 167,735
200,748 211,487 SME skill development subsidy 109,800 201,878
239,670 other subsidy 4,932 8,014 8,184 HRD Korea 33,004 63,691
129,781 Polytech University 102,600 106,388 113,748 Korea Tech
University 30,653 33,769 33,537 Study and training loan 87,973
96,550 35,643 Self-employed subsidy 431 2,581 1,500 - Social blame
for Training Queen - Support for training of prospective and
incumbent employees
Employer subsidy 2009 2010 2011 2012 Total 50.7 41.9 31.3 31.0 Less
than 300 27.2 25.3 21.1 18.8 More than 300 115.1 87.0 59.5 62.0
GAP(B-A) 87.9 61.7 38.4 43.2 - Support for training of prospective
and incumbent employees The government supports 'initial training'
for prospective employees and 'upgrade training', 'training on paid
leave' and 'job skills upgrade training' for incumbent employees.
Large corporations take 62% of training subsidy - Irregular workers
are 32.3% of total workers, however, participation of employer
subsidy training is 1-2% 08 09 10 11 12 Total (a) 3,663 4,516 3,775
3,015 3,190 Irregular (b) 38 60 77 54 44 Portion (b/a) 1.0 1.3 2.0
1.7 - Need to develop proper policies to support for the
participation
2009 2010 2011 2012 Irregular workers Participants 136,521 209,647
137,235 84,508 - Need to develop proper policies to support for the
participation of training program of irregular workers -
Contracting out training programs Type Public training providers
Public organizations(35) Polytech(34), KUT(1) Local government(5)
Government agencies(36) Ministry of Justice(36) Private training
providers (7,014) Training corporations(55) Private training
institute(2,655) Providersdesignated by MOEL(874) Others(3,430)
Individual training account (My Work Learning Card) system
Allows job seekers to freely choose vocational training courses and
training institutions within a certain subsidy limit and manages
individuals' training histories in an integrated manner. The
learning card (individual training account) is issued to those
found to lack vocational skills after counseling at a Job Center.
It is valid for one year from the date of issuance and offers a per
person subsidy of up to 2 million KRW. People receiving training
under the system are mandatorily required to pay 25-45% of their
training expenses on their own. However, people from low-income
families, who participate in the 'employment success package'
program, are exempt from the out-of pocket payment and subsidized
up to 3 million KRW. In 2012, some improvements were made to the
ITA system to adopt a stricter selection process and strengthen
trainees' responsibility: the work search obligation should be
satisfied before a training account is issued; the pre-counseling
on training is given before trainee selection; unfaithful trainees,
including those who give up training from the beginning or drop out
of training, are denied training subsidies and are disadvantaged
when applying to participate in training next time. As a
consequence, the number of people issued with a training account
sharply fell from 237,827 in 2011 to 189,525 in 2012 while the
training participation rate of account holders sharply grew from
74.8% in 2011 to 86.2% in 2012. Development and utilization of
National Competency Standards
It has been suggested that there should be a new HRD infrastructure
which systematizes the knowledge and skills required in industrial
sites and applies them to jobs, training/education, and
qualifications to develop and foster the human resources needed by
the labor market. To meed this need, the Economic and Social
Development Commission discussed 'measures to improve the
vocational skills development training system' in July 2001, and
the Ministry of Employment and Labor started to develop and apply
National Competency Standards (NCS) in 2001. 'National Competency
Standards' refers to competency units, such as the knowledge and
skills workers need to perform their jobs in industrial sites,
which are standardized at the national level. NCS for 286
occupational areas were developed between 2002 and 2012 and are
used as basic materials to link 'jobs, training and qualifications'
together at the industry level. Occupational standards
Competency standards Competency standards define the competencies
required for effective performance in the workplace. Standards are
expressed in outcome terms Source : ANTA(2003). Training Package
Assessment Materials Kit Competency standards Competency standards
define the specification of competencies required for effective
performance in the workplace expressed in a consistent format
Source : ILO(2006). Guidelines for Development of Regional Model
Competency Standards(RMCS) Occupational standards Occupational
standards outline the knowledge and performance required of an
individual to be considered competent in an occupation. Source :
The Canadian Tourism Human Resource Council(2004). National
Occupational Standards Characteristic of Skill Development of
Korea
- Governments strong leadership - Division of the role of the
Government and the Private Sector - Policy implementation suitable
for environmental changes - The stable financing system - The
linkage among labor market policies such as the active labor market
policy The connection with the NCS Complement between Vocational
Education and Vocational Training Over specification and over
education Introduction of dual systems Meister school 37 Types of
Recruitment Service
Employment services for small businesses In an effort to provide
support for small businesses suffering labor shortages, the
government mapped out the "the measures to solve mismatch between
labor supply and demand that SMEs suffer"(reported in the Cabinet
meeting, 2nd, October) and 71 job centers nationwide operated
special employment promotion period(for one month, November) in
order to create quality jobs and provide intensive employment
support services. Types of Recruitment Service Job Posting Resume
Collection Screening Interview Final Recruit- ment A B C D
Permanent Contractors
Staffs of PES( 12) Total Government Officers Permanent Contractors
Contractors Sub Officers Counselors Statisticians 4,916 3,068 1,823
1,189 56 537 339 198 1,311 * EI management approximately 1,000
vocational counselors are required Efficiency of Korean PES
Officers No of Job Placements Well Developed Job Matching Website
Makes PES Efficient Korea Goyong Center 5,000 1.5 Million 2.5
Million Japan Hellowork 28,000 1.9 Million 2.5 Million France Pole
Emploi 56,000 Germany Bundesagentur fur Arbeit 110,000 * Goyong
means employment 1. Lessons from Korean EI One-stop service center
is effective in job matching andactivating people. Onestop service
from the start: Combinationof Active Labor Market
Programs(Employment Security Program,Vocational Skill Development
Program) and UnemploymentBenefit Individualized CASE Management
employment and welfareservices are useful. Development of
employment information service and integrationof on/off-line
service institutions are essential. Exceptional ITsystems required
(Universial Credit, Ohbama Care) Central-central, central-local,
public-private partnership isimportant. Profiling of job-seekers
are necessary for focusing morevulnerable groups. 2. Lessons from
Korean EI Needs more public employment service capacity(activation)
Workfirst policy(5,000 > 20,000), Employment is the
responsibility of the society - Budget balance more budget for the
employment service>training>employer subsidies Use employment
security programs only for the crisis (PLMP, Deadweight loss,
substitute effect, Fraud) More involvement of trade unions in the
decision making More partnership and contracting out WAPES WAPES
(the World Association of Public Employment Services) is a global
association of Public Employment Services. 100 Public Employment
Services are members Workshops on various PES subjects Dynamic of
Innovation and Idea Management in PES PES and fight against poverty
Models of PES: Centralized and Decentralized Youth & Social
Entrepreneurship: the role of PES Training Programs Bilateral
Cooperation Thailand, Japan, Korea, Mongol, Viet Nam, Cambodia,
Parkistan, Australia, China, Philippines Thank you
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