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ENFORCEMENT DECREE OF THE EMPLOYMENT INSURANCE ACT

ENFORCEMENT DECREE OF THE EMPLOYMENT INSURANCE ACT

Presidential Decree No. 14570, Apr. 6, 1995

Amended by Presidential Decree No. 14628, Apr. 15, 1995 Presidential Decree No. 14935, Mar. 9, 1996

Presidential Decree No. 15092, Jun. 29, 1996

Presidential Decree No. 15367, May. 8, 1997

Presidential Decree No. 15587, Dec. 31, 1997

Presidential Decree No. 15624, Feb. 12, 1998

Presidential Decree No. 15683, Feb. 24, 1998

Presidential Decree No. 15829, Jul. 1, 1998

Presidential Decree No. 15902, Oct. 1, 1998

Presidential Decree No. 16095, Feb. 1, 1999

Presidential Decree No. 16464, Jul. 1, 1999

Presidential Decree No. 16705, Feb. 9, 2000

Presidential Decree No. 17090, Dec. 30, 2000

Presidential Decree No. 17301, Jul. 7, 2001

Presidential Decree No. 17403, Oct. 31, 2001

Presidential Decree No. 17471, Dec. 31, 2001

Presidential Decree No. 17853, Dec. 30, 2002

Presidential Decree No. 18146, Nov. 29, 2003

Presidential Decree No. 18165, Dec. 18, 2003

Presidential Decree No. 18296, Feb. 25, 2004

Presidential Decree No. 18312, Mar. 17, 2004

Presidential Decree No. 18555, Oct. 1, 2004

Presidential Decree No. 18572, Oct. 29, 2004

Presidential Decree No. 18911, Jun. 30, 2005

Presidential Decree No. 19103, Oct. 26, 2005

Presidential Decree No. 19246, Dec. 30, 2005

Presidential Decree No. 19422, Mar. 29, 2006

Presidential Decree No. 19513, Jun. 12, 2006

Presidential Decree No. 19738, Nov. 23, 2006

Presidential Decree No. 19806, Dec. 29, 2006

Presidential Decree No. 20036, Apr. 27, 2007

Wholly amended by Presidential Decree No. 20330, Oct. 17, 2007 Presidential Decree No. 20331, Oct. 23, 2007

Presidential Decree No. 20681, Feb. 29, 2008

Presidential Decree No. 20775, Apr. 30, 2008

Presidential Decree No. 20799, Jun. 5, 2008

Presidential Decree No. 20875, Jun. 25, 2008

CHAPTER

General Provisions

Article 1 (Purpose)

The purpose of this Decree is to stipulate matters delegated - 696 -

by the Employment Insurance Act and particulars necessary for its enforcement.

Article 2 (Scope of Application)

(1) The ßÖbusiness designated by the Presidential Decreeß×in the proviso of Article 8 of the Employment Insurance Act (hereinafter referred to as "the Act") means a business which falls under any of the following subparagraphs:

1. Business in the fields of agriculture, forestry, fishery or hunting, for which four workers or less are employed by a person who is not a corporation;

2. Construction work falling under any of the following items : Provided that the construction work undertaken by a person falling under any of the subparagraphs of Article 15 (2) of the Act shall be excluded :

A. Construction work whose total construction amount (hereinafter in this Article referred to as "total construction amount") under Article 2 (1) 2 of the Enforcement Decree of the Act on the Collection, etc., of Premiums for Employment Insurance and Industrial Accident Compensation Insurance is less than 20

million won; and

B. Construction work which is undertaken to construct or repair on a large scale a building with a total floor area of 330 square meters or less.

C. Housekeeping service

(2) The scope of business falling under any of the subparagraphs of paragraph (1) is based on the standard classification of industries (hereinafter referred to as "the Korean Standard Industrial Classification") which is announced by the Administrator of the National Statistical Office pursuant to Article 22 of the Statistics Act, except as otherwise prescribed by the Act and this Decree.

(3) If construction work whose total construction amount is less than 20 million won turns out to be the one whose total construction amount exceeds 20 million won due to a change of the design (including the case where the design is actually changed), or becomes subject to blanket application under Article 8 (1) and (2) of the Act on the Collection, etc. of Premiums for Employment Insurance and Industrial Accident Compensation Insurance (hereinafter referred to as "the Insurance Premium Collection Act"), all the provisions of the - 697 -

Act shall apply from the time thereof.

Article 3 (Workers Excluded from Application)

(1) The "person whose contractual working hours are less than the ones prescribed by the Presidential Decree" in subparagraph 2 of Article 10 of the Act refers to a person (including those whose contractual working hours per week is less than 15 hours) whose contractual working hours per month is less than 60 hours : Provided that any person who, among those working for the purpose of making their living, has worked continuously for three months or more and any daily worker under subparagraph 6 of Article 2 of the Act shall be excluded.

(2) The ßÖpersons prescribed by the Presidential Decreeß×under subparagraph 5 of Article 10 of the Act refer to those described in the following subparagraphs :

1. Foreign workers : Provided that a person who falls under any of the following items shall be excluded:

A. A person who holds a status of residency(D-7), corporate investment(D-8) and trade management(D-9) from

among the statuses of sojourn for foreigners under Article 12 of the Enforcement Decree of the

Immigration Control Act (excluding the case where the laws of the home country of the foreigner concerned, which govern insurance premiums and benefits corresponding to those of the employment insurance under this Act, do not apply to nationals of the Republic of Korea); B. A person (limited to those who have applied to join insurance under the conditions prescribed by the

Ordinance of the Ministry of Labor) who holds a status of sojourn permitting employment activities under Article 23 (1) of the Enforcement Decree of the Immigration Control Act;

C. A person falling under subparagraphs 1 and 2 of Article 23 (2) of the Enforcement Decree of the

Immigration Control Act;

D. A person (limited to those who have applied to join insurance under the conditions prescribed by the

Ordinance of the Ministry of Labor) who holds a

status of overseas ethnic Korean (F-4) from among the statuses of sojourn for foreigners under Article 12 of the Enforcement Decree of the Immigration Control Act; and

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E. A person (limited to those who have applied to join insurance under the conditions prescribed by the

Ordinance of the Ministry of Labor) who holds a

status of permanent residency (F-5) from among the statuses of sojourn for foreigners under Article 12 of the Enforcement Decree of the Immigration Control Act;

2. Special post office staffs under the Special Post Office Act.

Article 4 (Agent)

(1) An employer may appoint his/her agent and have the agent implement the matters that he/she is required to implement pursuant to the Act and this Decree.

(2) When an employer appoints or dismisses his/her agent, he/she shall report this to the Minister of Labor under the conditions prescribed by the Ordinance of the Ministry of Labor.

Article 5 (Administration, etc. of Employment Insurance Statistics) (1) The Minister of Labor shall systematically administer and operate the statistics related to employment insurance (hereinafter referred to as "employment insurance statistics") that are obtained through surveys and research under Article 11 of the Act and the operation of employment insurance.

(2) The Minister of Labor may have personnel specializing in employment insurance statistics in order to systematically manage and operate employment insurance statistics. (3) Necessary matters concerning qualifications, services and remunerations for the personnel specializing in employment insurance statistics shall be determined by the Minister of Labor. Article 6 (Execution of Affairs by Proxy)

(1) The Minister of Labor, pursuant to Article 11 (2) of the Act, may have insurance-related research institutes established pursuant to Article 8 the of the Act on the Establishment, Operation and Fosterage of the Government-Invested Research Institutions or the Korea Employment Information Service established pursuant to Article 33 of the Basic Employment Policy Act carry out survey and research programs to support labor market research and work related to employment insurance (hereinafter referred to as the "insurance"). (2) Where the Minister of Labor has an agent execute affairs - 699 -

pursuant to paragraph (1), he/she may support the expenses required for the necessary survey, research, management and operation, etc., from the employment insurance fund (hereinafter referred to as the "fund").

CHAPTER

Management of the Insured

Article 7 (Report on Acquisition or Loss of Eligibility for the Insured)

(1) An employer or a subcontractor shall, if he/she intends to report the acquisition or loss of eligibility for the insured involving workers employed by the business concerned to the Minister of Labor pursuant to Article 15 of the Act or to submit a document (hereinafter referred to as "document confirming separation from employment") specifying the unit period of insurance, reasons for separation from employment, and details of wages, retirement pay, etc., prior to separation to the Minister of Labor pursuant to Article 16 of the Act, make that report or submission no later than the 15th of the month (without delay, in case the worker asks the employer or subcontractor to make that report and submission before the date mentioned) following the date on which the reason to do so occurs. In this case, if the employer or subcontractor has submitted a report confirming employment details which contains the number of working days, wages, etc., for daily workers employed during the month concerned to the Minister of Labor no later than the 15th of the month following the date on which the reason occurs, he/she shall be considered to have reported the acquisition or loss of eligibility for the insured or submitted the document confirming separation from employment. (2) An employer who makes a report on the commencement and discontinuation of business pursuant to Article 11 (3) of the Insurance Premium Collection Act shall make a report on the acquisition or loss of eligibility for the insured to the Minister of Labor before the report deadline as referred to in paragraph (1).

(3) The Minister of Labor who receives a document confirming - 700 -

separation from employment pursuant to Article 16 (1) of the Act shall confirm the unit period of insurance, reasons for separation, wage payment details, etc.

(4) If when confirming the contents entered in a document confirming separation from employment, the Minister of Labor finds that the separated person concerned did not receive wages for 30 days or more consecutively in the 18 months before the date of separation due to the reasons referred to in Article 40 (2) of the Act, he/she may demand the separated person to submit a doctor's written diagnosis or other documents which can prove the reason.

Article 8 (Report by Workers on Eligibility for the Insured) In the event that a worker reports matters concerning the acquisition or loss of eligibility for the insured pursuant to Article 15 (3) of the Act, he/she shall submit a document proving employment relationship such as his/her labor contract. Article 9 (Report on Transfer of the Insured)

If an employer transfers the insured from his/her one business to another, he/she shall report this to the Minister of Labor within 14 days of the transfer date.

Article 10 (Report on Changes of Name, etc., of the Insured) An employer shall, if the name or resident registration number of the insured is changed or corrected, report this to the Minister of Labor within 14 days of the change or correction date.

Article 11 (Request for and Notification of Confirmation) (1) If a person who is or was the insured intends to confirm the acquisition or loss of his/her eligibility for the insured pursuant to Article 17 (1) of the Act, he/she shall make a request for this to the Minister of Labor.

(2) The Minister of Labor shall notify the person who has acquired or lost his/her eligibility for the insured, and the employer or subcontractor who employs or used to employ that person of the result of confirming the acquisition or loss of his/her eligibility for the insured pursuant to Article 17 (3) of the Act.

CHAPTER

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Employment Security and Vocational Skills

Development Projects

Article 12 (Scope of Preferentially Supported Enterprises) (1) Enterprises which meet the criteria set forth by the Presidential Decree under Article 19 (2) refer to those (hereinafter referred to as "preferentially supported enterprises") for which the number of workers by industry falls under any of the following subparagraphs:

1. Mining: 300 persons or fewer;

2. Manufacturing: 500 persons or fewer;

3. Construction: 300 persons or fewer;

4. Transportation, warehouse and communications: 300 persons or fewer; and

5. Industries other than those listed in subparagraphs 1 through 4: 100 persons or fewer.

(2) An enterprise which does not fall under any of the subparagraphs of paragraph (1) and which meets the standards referred to in Article 2 (1) and (3) of the Framework Act on Small and Medium Enterprises shall, notwithstanding the provisions of paragraph (1), be regarded as a preferentially supported enterprise.

(3) Notwithstanding the provisions of paragraphs (1) and (2), an enterprise which is notified that it is designated as an enterprise group subject to limitations on mutual investment in accordance with Article 14 (1) of the Monopoly Regulation and Fair Trade Act and with a total asset of five trillion won or more, shall not be regarded as a preferentially supported enterprise starting from the insurance year following the insurance year to which the date of notification belongs. (4) The standards for determining whether an enterprise is a preferentially supported enterprise under paragraph (1) of this Article are as follows:

1. The number of workers who are ordinarily employed shall be calculated by dividing the total number of workers in all the businesses operated by the employer as of the last day of every month of the previous year (daily workers are excluded in the construction industry), by the number of operating months of the previous year : Provided that in the case of a business of managing collective housing under the Housing Act, the number of - 702 -

workers shall be calculated by each business; and

2. The industrial classification referred to in the subparagraphs of paragraph (1) shall be applied on the basis of the major classifications of the Korea Standard Industrial Classification Table: Provided that if an employer runs business in two or more industries, it shall be on the basis of the industry where the number of workers is larger and if the number of workers in each industry is the same, the standard shall be applied on the basis of the order of the total amount of wages and sales. (5) Notwithstanding paragraph (4), with regard to an employer whose insurance relationship was established during the insurance year, whether his/her business is a preferentially supported enterprise shall be determined on the basis of the starting date of the insurance relationship.

Article 13 (Subsidy for Working Hour Reduction by Small and Medium Enterprises)

(1) If the employer of a business (excluding the employer of a business or workpalce falling under subparagraph 1 of Article 1 of the Addenda of the Labor Standards Act amended by Act No. 6974) which is a preferentially supported enterprise pursuant to Article 20 of the Act is subject to the amended provisions six months before the enforcement date under Article 1 of the Addenda of the Labor Standards Act amended by Act No. 6974 pursuant to Article 2 of the Addenda of the same Act, and the average monthly number of workers (excluding workers prescribed by the Ordinance of the Ministry of Labor from among those newly employed after working hours are shortened in accordance with the amended provisions of Article 49 of the same Act; hereinafter referred to as "the average monthly number of workers after application") of the business concerned in each quarter after the application of the amended provisions exceeds the average monthly number of workers during the three months preceding the month to which the date of shortening working hours to the number of working hours provided for in the amended provisions of Article 49 of the same Act belongs, the Minister of Labor shall provide the employer with the subsidy for working hour reduction by small and medium enterprises: Provided that in cases of falling under any of the following subparagraphs, the subsidy shall not be provided :

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1. In case where the business is not subject to the working hours under Article 50 of the Labor Standards Act; and

2. In case where the business commences after January 1,

2004. (2) Daily workers and any person falling under Article 3 (1) shall be excluded when calculating the number of workers referred to in paragraph (1).

(3) The amount of subsidy for working hour reduction by small and medium enterprises shall be obtained by multiplying the amount announced by the Minister of Labor every year in consideration of wage increase rates, labor market conditions, etc. by the difference by which the average monthly number of workers after application exceeds the average monthly number of workers before the shortening of working hours under paragraph (1), and the subsidy shall be provided for a period until the enforcement date provided for in Article 1 of the Addenda of the Labor Standards Act amended by Act No. 6974 : Provided that the total amount of subsidy per quarter shall not exceed the amount obtained by multiplying the amount announced by the Minister of Labor by 10/100 of the average monthly number of workers prior to the shorting of working hours.

(4) Necessary matters concerning the application for and payment of the subsidy for working hour reduction by small and medium enterprises shall be prescribed by the Ordinance of the Ministry of Labor.

Article 14 (Subsidy for Transforming Shift Work System) (1) If an employer has newly introduced a shift work system under which workers are divided into groups and work on a shift basis or transformed the shift work system by increasing the number of shifts (limited to the case where it is increased to four shifts or less; hereinafter referred to as "transformation of shift work system") pursuant to Article 20 of the Act, and the average monthly number of workers (excluding workers prescribed by the Ordinance of the Ministry of Labor from among those newly hired after the transformation of shift work system; hereinafter referred to as "the average monthly number of workers after transformation") of the business concerned in each quarter after the transformation of shift work system exceeds the average monthly number of workers (hereinafter referred to as "the average monthly number of workers before transformation") during the three months - 704 -

preceding the month to which the date of transformation belongs, the Minister of Labor shall provide the employer with the subsidy for transforming a shift work system. (2) The number of workers referred to in paragraph (1) shall be calculated based on workers engaged in work for which the shift work system has been transformed or in managing or supporting such work, but daily workers and any person falling under Article 3 (1) shall be excluded from the calculation.

(3) The amount of subsidy for transforming a shift work system shall be obtained by multiplying the amount announced by the Minister of Labor every year in consideration of wage increase rates, labor market conditions, etc., by the difference by which the average monthly number of workers after transformation exceeds the average monthly number of workers before transformation, and the subsidy shall be provided for one year after the transformation of the shift work system : Provided that the total amount of subsidy per quarter shall not exceed the amount obtained by multiplying the amount announced by the Minister of Labor by 1/3 of the average monthly number of workers before transformation.

(4) Necessary matters concerning the application for and payment of the subsidy for transforming a shift work system shall be prescribed by the Ordinance of the Ministry of Labor. Article 15 (Support for Improvement of Employment Environments by Small and Medium Enterprises)

(1) If the employer of a preferentially supported enterprise engaging in the kinds of industries provided for in Article 3 of the Special Act on Manpower Support for Small and Medium Enterprises installs facilities or equipment needed for the improvement of employment environments to expand

employment opportunities and thereby increases employment pursuant to Article 20 of the Act and Article 21 (1) of the Special Act on Manpower Support for Small and Medium Enterprises, the Minister of Labor may support part of the costs and wages within the limits of available budgets. (2) Necessary matters concerning the support conditions, such as the scope of facilities and equipment eligible for support, amount of subsidy, application for and payment of the subsidy, etc. shall be determined and announced by the Minister of Labor.

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Article 16 (Subsidy for Use of Professional Workforce by Small and Medium Enterprises)

(1) If the employer of a preferentially supported enterprise engaging in the kinds of industries provided for in Article 3 of the Special Act on Manpower Support for Small and Medium Enterprises newly hires the professional workforce (hereinafter referred to as "professional workforce") determined and announced by the Minister of Labor to enhance corporate competitiveness or after meeting all of the following conditions, employs a professional workforce supplied by enterprises other than preferentially supported enterprises and does not dismiss any worker due to employment adjustment for the three months before and six months after the hiring or employment, pursuant to Article 20 of the Act and Article 21 (1) of the Special Act on Manpower Support for Small and Medium Enterprises, the Minister of Labor shall provide the employer with the subsidy for use of a professional workforce by small and medium enterprises:

1. There shall be no exchange of workers between the enterprise supplied with the professional workforce and the enterprise supplying the professional workforce;

2. The enterprise supplying the professional workforce shall have done so with the consent of the professional workforce after consultation with its workers'

representative (if there is a trade union with a majority of workers, referring to the representative of the trade union, and if there is no such trade union, referring to a person representing a majority of workers' hereinafter the same shall apply.);

3. The same professional workforce which was supplied and since then has been used for one year or more shall not be supplied; and

4. The supplied enterprise and supplying enterprise shall make an agreement on the supply of the professional workforce and the enterprise supplying the professional workforce shall pay not less than 40/100 of the wages of the supplied professional workforce.

(2) The amount of subsidy for use of a professional workforce by small and medium enterprises shall be obtained by multiplying the amount announced by the Minister of Labor every year in consideration of wage increase rates, labor market - 706 -

conditions, etc., by the number (three if the number exceeds three but four if the number comes to exceed three because of additional hiring or supply of professional workers aged 50 or above) of newly hired or supplied professional workers, but the amount shall not exceed three quarters of the wages paid to the professional workers by the preferentially supported enterprise. (3) The subsidy for use of a professional workforce by small and medium enterprises shall be provided for 12 months : Provided that the employment period of the professional workforce is less than 12 months, the subsidy shall be paid during that period.

(4) Necessary matters concerning the application for and payment of the subsidy for use of a professional workforce by small and medium enterprises shall be prescribed by the Ordinance of the Ministry of Labor.

Article 17 (Subsidy for Entry into New Business by Small and Medium Enterprises)

(1) If the employer of a preferentially supported enterprise engaging in the kinds of industries provided for in Article 3 of the Special Act on Manpower Support for Small and Medium Enterprises enters a new business (hereinafter referred to as "entry into a new business") under the conditions as prescribed by the Ordinance of the Ministry of Labor pursuant to Article 20 of the Act and Article 21 (1) of the Special Act on Manpower Support for Small and Medium Enterprises, and the average monthly number of workers (excluding workers prescribed by the Ordinance of the Ministry of Labor from among those newly hired after entry into a new business; hereinafter referred to as "the average monthly number of workers after entry") of the business concerned in each quarter after entry into a new business exceeds the average monthly number of workers during the three months preceding the month to which the date of entering a new business belongs, the Minister of Labor shall provide the employer with the subsidy for entry into a new business by small and medium enterprises.

(2) Daily workers and any person falling under Article 3 (1) shall be excluded when calculating the number of workers referred to in paragraph (1).

(3) An employer who intends to receive the subsidy for entry into a new business by small and medium enterprises pursuant to paragraph (1) shall establish a plan for entering a - 707 -

new business (hereinafter referred to as "plan for entering a new business") after consultation with a workers' representative of the new business and implement the plan. In this case, the person who intends to establish the plan for entering a new business or alter it shall report this to the Minister of Labor in advance.

(4) In case of implementing the plan for entering a new business under paragraph (3), the employer shall conclude the entry into a new business within one year from the date of reporting the plan for entering a new business and report this to the Minister of Labor.

(5) The amount of subsidy for entry into a new business by small and medium enterprises shall be obtained by multiplying the amount announced by the Minister of Labor every year in consideration of wage increase rates, labor market conditions, etc., by the difference (if the difference exceeds 30 workers, it shall be limited to 30.) by which the average monthly number of workers after entry exceeds the average monthly number of workers before entry, and the subsidy shall be provided for one year from the date on which the entry into a new business is completed.

(6) Necessary matters concerning the application for and payment of the subsidy for entry into a new business by small and medium enterprises shall be prescribed by the Ordinance of the Ministry of Labor.

Article 18 (Support Measures, etc., for Employment Adjustment) (1) For an employer who takes measures for workers' employment security pursuant to Article 21 (1) and (2) of the Act, subsidies or grants shall be provided.

(2) An employer who is eligible for preferential support under the provisions of Article 21 (3) of the Act shall be an employer falling under any of the following subparagraphs:

1. The employer of a business which belongs to the designated industries in need of employment adjustment support, etc., (hereinafter in this Article referred to as ßÖdesignated industriesß×) under subparagraph 1 of Article 18 (1) of the Enforcement Decree of the Basic

Employment Policy Act;

2. An employer who carries out manufacturing, repairing, etc., under a contract for business belonging to the designated industries, awarded by the employer

prescribed in subparagraph 1, and with more than half of - 708 -

its sales related to the designated industries; and

3. The employer of a business which is located at a designated site in need of support for employment adjustment (hereinafter referred to as ßÖdesignated siteß×) under the provisions of Article 18 (1) 2 or 3 of the Enforcement Decree of the Basic Employment Policy Act. (3) If an em ployer who falls under any of the

subparagraphs of paragraph (2) takes employment retention measures, provides outplacement services or rehires his/her workers, the Minister of Labor may, notwithstanding the provisions of Articles 19 through 23, set the different eligibility requirements and subsidy levels after deliberation of the Employment Policy Council (hereinafter referred to as the "Employment Policy Council") under the Basic Employment Policy Act.

Article 19 (Those Entitled to Employment Retention Subsidy) (1) If an employer who inevitably needs employment adjustment under Article 21 (1) of the Act, takes the measures (hereinafter referred to as the "employment retention measures") described in any of the following subparagraphs for insured persons(excluding daily workers, those given a notice of dismissal in advance under Article 26 of the Labor Standards Act and those due to retire for managerial reasons following the recommendation by an employer; hereinafter in this Chapter, the same shall apply.) employed in the business concerned and thus dose not dismiss any insured person due to employment adjustment during the implementation of the employment retention measures (except the cases falling under subparagraph 4), the Minister of Labor shall provide the employer with a subsidy (hereinafter referred to as "the employment retention subsidy"):

1. In case the employer temporarily shuts down his/her business to the extent that the ratio of the number of temporary shutdown days for the insured to the number of their contractual work days during a one-month unit period (hereinafter referred to as the ßÖunit periodß×) exceeds one fifteenth, and pays allowances for the shutdown during the temporary shutdown period. In this case, the method of calculating the unit period and the method of calculating the number of temporary shutdown days if the business is shut down for part of contractual daily working hours shall be prescribed by the Ordinance - 709 -

of the Ministry of Labor;

2. In case the employer provides training in a bid to retain employment under the conditions prescribed by the Ordinance of the Ministry of Labor;

3. In case the employer grants leave with or without pay for one month or longer;

4. In case the employer installs or maintains facilities or equipment necessary to change his/her business into a business which belongs to a different industrial group in the industrial groups listed under the Korean Standard Industrial Classification and reassigns to the new business 6/10 or more of the number of the insured at the time when the plan for employment retention measures is reported pursuant to Article 20 (2) : Provided that in case the employer has changed his/her business after obtaining approval for a business transformation plan pursuant to Article 8 of the Special Act on the Promotion of the Business Transformation of Small and Medium Enterprises, cases of changing the business into a business which belongs to a different industrial class or sub-class in the industrial classes or sub-classes listed under the Korean Standard Industrial Classification shall be included.

(2) Notwithstanding the provisions of paragraph (1), if the sum of the number of days of extended work and the number of days of holiday work in the business concerned during the implementation of the employment retention measures as prescribed in paragraph (1) 1 exceeds the number of days prescribed by the Ordinance of the Ministry of Labor, the employment retention subsidy shall not be provided for the implementation period.

(3) Necessary matters concerning the method of calculating the number of days of extended work and the number of days of holiday work, etc., shall be prescribed by the Ordinance of the Ministry of Labor.

Article 20 (Establishment and Implementation of Plans for Employment Retention Measures)

(1) An employer who intends to receive the employment retention subsidy shall establish a plan for employment retention measures meeting the following conditions and implement it under the conditions prescribed by the Ordinance of the Ministry of Labor:

1. The employer shall make consultation with a workers' - 710 -

representative of the business concerned when establishing the plan for employment retention measures; and

2. The employer shall keep documents containing the implementation status of the plan for employment retention measures, and the payment status of allowances for temporary shutdown1)/leave and wages.

(2) A person who intends to establish a plan for

employment retention measures as prescribed in paragraph 1 shall report this to the Minister of Labor in advance. The same shall apply in case he/she intends to modify the scheduled date, eligible workers, and wages to be paid in the plan for employment retention measures : Provided that in case there are inevitable reasons as prescribed in the Ordinance of the Ministry of Labor, the employer may report within three days (within 20 days in case the employer of a business located in an area declared as a special disaster zone under Article 60 of the Countermeasures against Natural Disasters Act takes employment retention measures due to the special disaster) from the date of implementing or modifying the plan for employment retention measures.

(3) In implementing a plan for employment retention measures pursuant to paragraph 1, an employer falling under subparagraph 4 of Article 19 (1) shall complete the reassignment of workforce within one and a half years from the date of reporting the plan for employment retention measures, and report this to the Minister of Labor.

Article 21 (Amount and Scope of Employment Retention Subsidy) (1) The amount of employment retention subsidy shall be the amount described in any of the following subparagraphs:

1. In cases of falling under subparagraphs 1 and 3 of Article 19 (1), two-thirds [one-half in case of companies which are not preferentially supported enterprises as prescribed in Article 12 (hereinafter referred to as the ßÖlarge-scale enterprisesß×)] of the allowances for temporary

shutdown/leave and wages paid to the insured by the employer during the implementation of employment

retention measures. In this case, if the leave is unpaid 1) Temporary shutdown allowances are allowances which are paid by an employer to his/her worker if the business is temporarily shut down due to reasons attributable to the employer. - 711 -

leave prescribed in subparagraph 3 of Article 19 (1), the amount of subsidy shall be the amount prescribed by the Ordinance of the Ministry of Labor in consideration of labor costs borne by the employer during the leave period, and if the leave is paid leave prescribed in subparagraph 3 of Article 19 (2) and the amount of employment retention subsidy to be paid in case of paid leave is less than that to be paid in case of unpaid leave, the amount of subsidy shall be the amount to be provided in case the worker is on unpaid leave;

2. In cases of falling under subparagraph 2 of Article 19 (1), the sum of three-fourths (two-thirds in case of large-scale enterprises) of the wages paid to the insured trainee by the employer during the training and the amount obtained by multiplying the standard training expenses announced by the Minister of Labor by the rate announced by the Minister of Labor;

3. In case the employer additionally provides training pursuant to subparagraph 2 of Article 19 (1) during a period of unpaid leave prescribed in subparagraph 3 of Article 19 (1), the sum of the amount obtained by multiplying the standard training expenses announced by the Minister of Labor by the rate announced by the Minister of Labor and the amount of training allowances prescribed by the Ordinance of the Ministry of Labor; or

4. In cases of falling under Article 19 (1) 4, three-fourths (two-thirds in case of large-scale enterprises) of the wages paid to the insured by the employer during the

implementation of employment retention measures.

(2) If the employment retention measures prescribed in subparagraphs 1 through 3 of Article 19 (1) are implemented, the employment retention subsidy under paragraph 1 shall be provided for each employment retention measure until the total number of days (If two measures or more are implemented on the same day, it shall be counted as one day.) when the measures are implemented reaches 180, and if the employment retention measures referred to in subparagraph 4 of Article 19 (1) are implemented, the employment retention subsidy shall be provided for up to one year from the date (referring to the date one and a half years later in case the reassignment of workforce is not completed within one and a half years) on which the reassignment of workforce is completed, but in case insured workers assigned to the new business through the - 712 -

reassignment of workforce are dismissed due to employment adjustment, the employment retention subsidy shall not be provided from the date of the dismissal : Provided that if employment situations have worsened due to a rapid increase in unemployment, etc., and it is deemed necessary for employment security, the Minister of Labor may, if an employer who has received the subsidy for not more than 180 days for implementing the employment retention measures under subparagraphs 1 through 3 of Article 19 (1) additionally carries out the employment retention measures under subparagraph 4 of Article 19 (1) during the period determined and announced by the Minister of Labor, provide the employment retention subsidy until the total number of days when the additional employment retention measures are implemented reaches 90. (3) If an employer receives the employment retention subsidy pursuant to subparagraph 3 of paragraph (1), the

employment retention subsidy paid pursuant to the latter part of subparagraph 1 of paragraph (1) shall not be provided during the payment of the employment retention subsidy under subparagraph 3 of paragraph (1). In this case, the employer who receives the employment retention subsidy shall pay workers who receive training an equivalent amount of the training allowances out of the employment retention subsidy. (4) The amount of employment retention subsidy provided pursuant to paragraph (1) shall not exceed the amount determined and announced by the Minister of Labor for every worker eligible for employment retention measure. Article 22 (Subsidy for Out-placement Service)

(1) If an employer who inevitably has to adjust employment under Article 21 (1) of the Act, alone or jointly establishes the facilities for direct job counselling, etc., prescribed by the Ordinance of the Ministry of Labor or entrusts other organizations equipped with these sorts of facilities to provide such services(hereinafter referred to as the ßÖout-placement servicesß×) as job counselling services, etc., prescribed by the Ordinance of the Ministry of Labor to provide support for the prompt reemployment of the persons described in any of the following subparagraphs, the Minister of Labor shall give the employer subsidy for out-placement services:

1. A person who is the insured of the business concerned and due to leave his/her job because of employment adjustment, retirement age limits, or the expiry of his/her - 713 -

employment contract period; and

2. A person who was the insured of the business concerned and has left his/her job because of employment

adjustment, retirement age limits, or the expiry of his/her employment contract period.

(2) An employer who intends to receive the subsidy for out-placement services shall establish a plan for out-placement services after consultation in good faith with a workers' representative. In this case, if employers jointly provides out-placement services, the employer (hereinafter referred to as "an employers' representative") who is selected to represent all other employers after each employer makes consultation in good faith with a workers' representative in his/her business shall establish a plan for out-placement services.

(3) An employer or an employersßÓrepresentative who intends to establish a plan for out-placement services under paragraph (2) shall submit the plan for out-placement services to the Minister of Labor and obtain approval under the conditions prescribed by the Ordinance of the Ministry of Labor. The same shall apply in the case of modifying a plan for out-placement services.

(4) If receiving a plan for out-placement services from an employer or an employers' representative pursuant to paragraph (3), the Minister of Labor shall judge whether or not the employer is eligible for the subsidy for out-placement services under paragraph (1) and (2) and then shall notify the employer of the decision on whether to approve the plan for out-placement services.

(5) The amount of the subsidy for out-placement services prescribed in paragraph (1) shall be all [two-thirds in case large-scale enterprises or employers jointly provide out-placement services (This shall apply only when those who are insured or used to be insured in large-scale enterprises make up half or more of the total workers receiving the out-placement services.)] of the money the employer alone or jointly has spent on providing the out-placement services : Provided that the detailed categories and maximum amount of subsidy for out-placement services shall be determined and announced by the Minister of Labor.

(6) The payment of the subsidy for out-placement services under paragraphs (1) through (5) shall be made on a monthly basis for a period of up to 12 months.

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(7) Other necessary matters concerning the application for and payment of the subsidy for out-placement services shall be prescribed by the Ordinance of the Ministry of Labor. Article 23 (Subsidy for Re-hiring)

(1) The Minister of Labor shall provide an employer with the subsidy for rehiring if the employer (including employers prescribed by the Ordinance of the Ministry of Labor and related to the business concerned, such as those whose business merges with or takes over the business concerned; hereinafter in this Article, the same shall apply.) rehires a person who left his job due to employment adjustment as an insured worker (excluding workers prescribed by the Ordinance of the Ministry of Labor such as those under a short-term employment contract) within six months or more but less than two years after he/she left job, pursuant to Articles 21 (2) of the Act and does not dismiss any workers due to employment adjustment for three months before and six months after the rehiring: (2) The amount of the subsidy for rehiring under paragraph (1) shall be obtained by multiplying the amount announced by the Minister of Labor every year according to size of business by the number of rehired workers, and the subsidy shall be provided for six months (the employment period of the rehired worker, in case it is less than six months).

(3) If an employer rehires workers for whom the

business has received the subsidy for rehiring over the course of the past two years, the subsidy for rehiring shall not be provided.

(4) Necessary matters concerning the application for and payment of the subsidy for rehiring shall be prescribed by the Ordinance of the Ministry of Labor.

Article 24 (Subsidy for Local Employment Promotion) (1) The Minister of Labor, pursuant to Article 22 of the Act, shall provide subsidy for local employment promotion to an employer who transfers his/her business to a designated area or newly sets up or expands his/her business in a designated area after meeting all the following conditions:

1. Within the period of support, etc. for employment adjustment announced pursuant to Article 18 (2) of the Enforcement Decree of the Basic Employment Policy Act (hereinafter referred to as the ßÖdesignated periodß×), the business shall be transferred, newly set up or expanded;

2. The employer shall establish a local employment plan on - 715 -

the transfer, set-up, or expansion of the business and the subsequent hiring of workers, report the plan to the Minister of Labor, and implement it as planned;

3. Within one and half years after the date of the submission of a local employment plan, the transferred, newly-set up or expanded business shall begin its operation;

4. As of the beginning date(hereinafter referred to as the ßÖoperation starting dateß×) of operation of the transferred, newly-set up or expanded business, the employer shall hire job seekers who have resided in the designated area or other designated areas for three months or more, as the insured of the transferred, newly-set up or expanded business;

5. The need for the business shall be recognized by the Local Employment Council under Article 6 of the Basic Employment Policy Act; and

6. The business shall be started after preparing documents about the implementation status of the local employment plan and the status of wage payment to insured workers. (2) If an employer who intends to receive the subsidy for local employment promotion shall start business operation, pursuant to subparagraph 3 of paragraph (1), he/she shall report this to the Minister of Labor.

(3) The amount of the subsidy for local employment promotion shall be a half(one third in case of large-scale enterprises) of the amount of wages paid to the insured who were hired in accordance with subparagraph 4 of paragraph (1). (4) The subsidy for local employment promotion shall be provided for one year from the date of starting operation : Provided that if the designated period is less than one year, it shall be paid until the date when the designated period ends. (5) If the number of the insured who were hired in one designated period in accordance with subparagraph 4 of paragraph (1) exceeds 200, the subsidy for local employment promotion shall be provided only to 30/100 of the excess number of workers.

(6) Necessary matters concerning the application for and payment of the subsidy for local employment promotion shall be prescribed by the Ordinance of the Ministry of Labor. - 716 -

Article 25 (Subsidy for Employment Promotion for the Aged) (1) The Minister of Labor shall provide subsidy for employment promotion for the aged to an employer who meets the conditions described in any of the following subparagraphs pursuant to Article 23 of the Act:

1. The ratio of the average monthly number of the aged employed for one year or more (referring to the aged under the Aged Employment Promotion Act; hereinafter the same shall apply.) to the average monthly number of all workers of the business concerned in each quarter shall be more than the ratio determined and announced by the Minister of Labor according to industry;

2. The retirement age shall be raised by one year or more than the existing one and is 56 years old or older : Provided that if the retirement age was lowered less than three years before being raised, the subsidy for

employment promotion for the aged shall not be

provided;

3. The employer of a workplace that sets its retirement age limit at 57 or above shall retain a worker who reaches the retirement age after 18 months or more of

employment or re-employ (hereinafter referred to

"continuous employment") a worker within three months after he/she left his/her job at the retirement age and not dismiss any worker due to employment adjustment for three months before and six months after the

continuous employment : Provided that in cases

prescribed by the Ordinance of the Ministry of Labor, such as one year or less of continuous employment or lowering the retirement age, the subsidy for employment promotion for the aged shall not be provided.

(2) Daily workers, and any person falling under

subparagraphs 2 through 5 of Article 10 of the Act shall be excluded when calculating the number of workers and the number of the aged under paragraph (1) 1.

(3) The amount of the subsidy for employment promotion for the aged to be paid to an employer meeting the conditions described in paragraph (1) 1 shall be calculated by multiplying the amount annually announced by the Minister of Labor in consideration of wage increase rates, labor market conditions, etc., by the number of the aged in excess of the ratio determined and announced by the Minister of Labor according to industry pursuant to paragraph (1) 1 : Provided that the - 717 -

period during which an employer can receive the subsidy for employment promotion for the aged shall not exceed five years, and the total amount of the subsidy per quarter shall not exceed the amount calculated by multiplying the amount announced by the Minister of Labor by 15/100 (10/100 in the case of a large-scale enterprise) of the number of workers of the business concerned.

(4) The amount of the subsidy for employment promotion for the aged to be paid to an employer meeting the conditions described in paragraph (1) 2 shall be calculated by multiplying the amount announced by the Minister of Labor annually in consideration of wage increase rates, labor market conditions, etc., by the number of workers (excluding those to whom allowances for compensating for wage cuts under the wage peak system are paid pursuant to Article 28) who had reached the retirement age after 18 months or more of employment and then have been continuously employed due to the extension of the retirement age, and the subsidy shall be provided for half of the extended period : Provided that the subsidy shall be provided only to workers who reaches the previous retirement age limit less than five years after the date on which the retirement age limit is extended and then are continuously employed.

(5) The amount of the subsidy for employment promotion for the aged to be paid to an employer meeting the conditions described in paragraph (1) 3 shall be calculated by multiplying the amount announced by the Minister of Labor annually in consideration of wage increase rates, labor market conditions, etc., by the number of workers continuously employed after reaching the retirement age and the subsidy shall be provided for six months (twelve months in the case of employers of businesses falling under Article 12 (1) 2).

(6) Necessary matters concerning the application for and payment of the subsidy for employment promotion for the aged shall be prescribed by the Ordinance of the Ministry of Labor. Article 26 (Subsidy for Promoting New Hiring)

(1) If an employer hires as an insured worker (excluding workers prescribed by the Ordinance of the Ministry of Labor, such as those under a short-term employment contract) through job placement services by an Employment Security Office, a person whose unemployment period, counted from the date on which he/she registers himself/herself as a job-seeker with - 718 -

Employment Security Offices or other organizations prescribed by the Ordinance of the Ministry of Labor, exceeds the unemployment period set according to type of recipients in Table 1, and does not dismiss any workers due to employment adjustment for three months before and twelve months after the hiring, the Minister of Labor shall provide the employer with the subsidy for promoting new hiring pursuant to Article 23 of the Act: Provided that in case the worker is hired by his/her last employer (including employers prescribed by the Ordinance of the Ministry of Labor and related to the last employer, such as those whose business merges with or takes over the business of the last employer), the subsidy for promotion for new-hiring shall not be provided and in case the worker is hired through job placement services by organizations prescribed by the Ordinance of the Ministry of Labor other than Employment Security Offices, the subsidy shall be provided only when the head of the employment security service allows the provision of the subsidy.

(2) The amount of the subsidy for promoting new hiring under paragraph (1) shall be calculated by multiplying the amount announced by the Minister of Labor annually in consideration of wage increase rates, labor market conditions, etc., by the number of workers employed and the subsidy shall be paid for 12 months (the employment period of the worker concerned if it is less than 12 months). In this case, the amount announced by the Minister of Labor may be differentiated according to the length of consecutive service.

(3) If an employer falls into two or more categories of those eligible to receive the subsidy for promoting new hiring under the provisions of Table 1, based on the category under which the employer applies for the subsidy, the amount calculated pursuant to paragraph (2) shall be provided.

(4) If the number of workers newly hired under paragraph (1) exceeds 100 in the insurance year concerned, the subsidy for promoting new hiring shall be provided for up to 30/100 of the excess number.

(5) Necessary matters concerning the application for and payment of the subsidy for promoting new hiring shall be prescribed by the Ordinance of the Ministry of Labor. Article 27 (Subsidy for Employment of the Middle- and Old-aged Completing Training)

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(1) The Minister of Labor shall provide an employer with subsidy for employment of the middle- and old-aged completing training pursuant to Article 23 of the Act, if the employer newly hires as insured workers(excluding those prescribed by the Ordinance of the Ministry of Labor such as workers under a short-term employment contract)the unemployed aged 40 or older who have completed either employment training for the unemployed(limited to training whose period is one months or longer) prescribed in Article 47 or training courses designated and announced by the Minister of Labor, within six months after completion of the training, and does not dismiss any worker in employment adjustment for three months before and six months after the hiring: Provided that the subsidy shall not be provided if the hired worker is employed by his/her last employer (including employers related to the business and prescribed by the Ordinance of the Ministry of Labor such as those whose business merges with or takes over the business of the last employer).

(2) The amount of subsidy for employment of the middle- and old-aged completing training shall be calculated by multiplying the amount announced every year by the Minister of Labor in consideration of wage increase rates, labor market conditions, etc., by the number of workers hired pursuant to paragraph (1), and the subsidy shall be paid for 12 months (the employment period of the hired worker concerned, if it is less than 12 months). In this case, the amount announced by the Minister of Labor may be differentiated according to the length of consecutive service.

(3) Necessary matters concerning the application for and payment of the subsidy for employment of the middle- and old-aged completing training shall be prescribed by the Ordinance of the Ministry of Labor.

Article 28 (Allowances for Wage Peak System)

(1) If an employer implements a system (hereinafter referred to as the "wage peak system") of cutting a worker's wages based on a particular age, consecutive service period or wage on the conditions that his/her employment will be guaranteed beyond the age prescribed by the Ordinance of the Ministry of Labor, with consent of the workers' representative, the Minister of Labor shall pay allowances for wage peak system to workers affected by the wage peak system pursuant to Article 23 of the Act.

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(2) The allowances for wage peak system under paragraph (1) shall be paid to those who have been employed for 18 months or more and whose wages in the year in which the wages begin to be cut due to the application of the wage peak system are at least 10/100 lower than his/her wages (hereinafter referred to as "peak wages") in the year immediately preceding that year (excluding cases where the amount of wages in the year in which the wage peak system begins to be applied is not less than the amount announced by the Minister of Labor).

(3) The allowances for wage peak system under paragraph (1) shall be of an amount announced by the Minister of Labor in consideration of the difference between the worker's peak wages and wages cut under the wage peak system, wage increase rates, etc.

(4) The allowances for wage peak system under paragraph (1) shall be paid for six years from the time when the wage peak system begins to be applied : Provided that if the employment period counted from the time when the wage peak system begins to be applied is less than six years, the allowances shall be paid only for the employment period. (5) Necessary matters concerning the calculation of, application for and payment of the allowances for wage peak system under paragraphs (1) through (4) shall be prescribed by the Ordinance of the Ministry of Labor.

Article 29 (Subsidy for Continuous Employment After Pregnancy and Childbirth)

(1) If a worker, who falls under any of the following subparagraphs and is either on the protection leave prescribed in Article 74 of the Labor Standards Act or 16 weeks or more pregnant, has her employment contract or dispatch contract expired during the leave or pregnancy and an employer makes a labor contract lasting one year or longer with the worker immediately after the end of her employment contract or dispatch contract period, the Minister of Labor shall pay the employer the amount of subsidy determined and announced by the Minister of Labor for six months : Provided that the subsidy shall be paid for one year in case an employer makes a contract whose period is not fixed :

1. A worker whose employment contract period is one year or less; and

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2. A dispatched worker under the Act on the Protection, etc., of Dispatched Workers.

(2) The subsidy under paragraph (1) shall be paid also to a using employer under the Act on the Protection, etc., of Dispatched Workers, who directly makes a labor contract lasting one year or longer with a worker whose dispatch contract has expired.

(3) Necessary matters concerning the application for and payment of the subsidy under paragraphs (1) and (2) shall be prescribed by the Ordinance of the Ministry of Labor. Article 30 (Subsidy for Child-care Leave, etc. and Subsidy for Hiring of Replacement Workforce)

(1) If an employer allows an insured worker to take child-care leave (excluding a period overlapping the 90 days of maternity leave before and after childbirth prescribed in Article 74 of the Labor Standards Act) under Article 19 of the Act on Equal Employment and Support for Work-Family Reconciliation or to work shorter working hours for a child-rearing period under Article 19-2 of the same Act (hereinafter referred to as "child-care leave, etc.") for 30 days or more and employs the insured worker continuously for 30 days or more after the end of the child-care leave, etc., the Minister of Labor shall provide the employer with subsidy for child-care leave, etc., pursuant to Article 23 of the Act.

(2) The amount of the subsidy for child-care leave, etc., under paragraph (1) shall be calculated by multiplying the amount announced by the Minister of Labor every year according to business size in consideration of an employer's burdens of labor costs arising from granting child-care leave, etc., by the number of months (including the period of paid maternity leave after childbirth prescribed in Article 74 of the Labor Standards Act : Provided that this shall not apply in the case of workers in preferentially supported enterprises.) for which the worker has taken child-care leave, etc.

(3) If an employer meets all of the following requirements, the Minister of Labor shall provide subsidy for hiring of replacement workforce in addition to the subsidy referred to in paragraph (1) : 30, 2008>

1. The employer newly hired a replacement worker 30 days before the beginning date of child-care leave, etc., (30 days before the beginning date of maternity leave in case the child-care leave, etc., starts immediately after maternity leave) and has continued to employ the worker for 30 days or more since then;

2. The employer has continued to employ the worker who took the child-care leave, etc., for 90 days or more after the end of the child-care leave;

and

3. The employer should not dismiss any workers due to employment adjustment for three months before and six months after the new hiring of the replacement worker

(4) The amount of the subsidy for hiring of replacement workforce under paragraph (3) shall be calculated by multiplying the amount announced by the Minister of Labor according to business size in consideration of an employer's cost burdens resulting from the hiring of a replacement workforce by the number of months for which the employer has employed the replacement worker from the beginning date of the child-care leave, etc., (the beginning date of maternity leave in case the child-care leave, etc., starts immediately after maternity leave) to the ending date of the child-care leave, etc.

(5) Necessary matters concerning the application for and payment of the subsidy for child-care leave, etc., and the subsidy for hiring of replacement workforce shall be prescribed by the Ordinance of the Ministry of Labor.