ENFORCEMENT DECREE OF THE ACT ON THE COLLECTION, ETC., OF PREMIUMS FOR EMPLOYMENT INSURANCE AND INDUSTRIAL ACCIDENT COMPENSATION INSURANCE
[Enforcement Date 01. Jan, 2015.] [Presidential Decree No.25840, 09. Dec, 2014., Amendment by Other Act]
Ministry of Employment and Labor (Employment Insurance Planning Division) , 044-202-7359 Ministry of Employment and Labor (Industrial Compensation Policy Division) , 044-202-7712
Chapter I General Provisions <Presidential Decree No. 22408, Sep. 29, 2010>
The purpose of this Decree is to stipulate matters delegated by the Act on the Collection, etc., of Premiums for Employment Insurance and Industrial Accident Compensation Insurance and particulars necessary for the enforcement thereof. <This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 2 (Definition) (1) The meaning of the terms used in this Decree are as follows: <Amended by Presidential Decree No. 23282, Nov. 1, 2011 and Presidential Decree No. 25047, Dec. 30, 2013>
1. "Total construction work" refers to a whole range of work carried out in relation to construction work for the following items:
A. Construction work such as civil engineering work, building work, and other construction work for structures, which are carried out to complete a final object, and the work of remodeling, repairing, altering and dismantling a building structure etc.
B. Preparation and finishing work, etc., needed to carry out each construction work under item A.
2. "Total construction cost" refers to the amount of contract costs (including the market prices of materials in cases where a person who issues an order supplies materials) for carrying out total construction work: Provided, That in cases of construction work carried out by a person who is not a constructor prescribed in subparagraph 7 of Article 2 of the Framework Act on the Construction Industry and not subject to restrictions on persons who carry out construction work pursuant to Article 41 of the same Act, an amount calculated according to the methods determined and announced by the Minister of Employment and Labor shall be the total construction cost; and
3. "The number of ordinarily employed workers" shall be as follows: Provided, That in the case of the businesses prescribed in each subparagraph of Articles 15 (1), it refers to the number of workers calculated pursuant to paragraph (2) of the same Article:
A. Where a business begins before the insurance year concerned: the number produced by dividing the sum of the number of workers used as of the last day of each month of the previous year by the number of months of business operation: Provided, That if it is difficult to confirm the number of workers in a construction business, it refers to the number produced according to the following formula. In such cases, "value of construction work done" refers to the amount produced by subtracting the cost of construction work legally subcontracted out under the Framework Act on the Construction Industry and other relevant Acts or subordinate statutes from the total value of construction work done ( referring to the total cost of construction work completed in the insurance year concerned), and "
B. Where a business begins during the insurance year concerned: the number of workers used as of the date of the establishment of the insurance relationship.
(2) If the same construction work carried out to complete a final object is divided into two parts or more and they are contracted out under the name of entrustment or any other name (including cases where the person issuing the order directly carries out part of the construction work), the total construction cost under paragraph (1) 2 shall be calculated by adding up all of the contract amounts: Provided, That this shall not apply if each contracted construction work is carried out separately and independently in terms of time and place.
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 2-2 (Money and Valuables Excluded from Remuneration)
"Money and valuables prescribed by the Presidential Decree" in subparagraph 3 of Article 2 of the Act on the Collection, etc. of Premiums for Employment Insurance and Industrial Accident Compensation Insurance (hereinafter referred to as "Act") refers to non-taxable earned income under subparagraph 3 of Article 12 of the Income Tax Act.
<This Article Newly Inserted by Presidential Decree No. 22408, Sep. 29, 2010>
Article 3 (Application of Standard Remuneration) (1) "Cases where there are reasons prescribed by the Presidential Decree" in Article 3 (1) of the Act refers to the following cases:
1.Where remuneration-related data are nonexistent or unclear; and
2. Where it is difficult to locate the business due to the relocation, etc., of the business or workplace (hereinafter referred to as "business")
(2) The standard remuneration under Article 3 (2) of the Act shall be applied according to the following classification:
1. Monthly standard remuneration shall be applied to regular workers paid the fixed amount of remuneration on a monthly basis;
2. Hourly standard remuneration shall be applied to part-time workers, workers (hereinafter referred to as "hourly remuneration workers" in this Article) who are paid remuneration according to the number of their working hours, and workers (hereinafter referred to as "daily remuneration workers" in this Article) who are paid daily remuneration according to the number of their working days, regarding the prescribed number of working hours per week as the actual number of working hours: Provided, That if it is not clear whether a worker is a hourly wage worker or daily wage worker or if the prescribed number of working hours per week cannot be confirmed, monthly standard remuneration shall be applied.
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 4 (Scope of Construction Businesses, etc.)
The scope of businesses prescribed by this Decree, unless otherwise prescribed by this Decree, shall be subject to the standard classification of industries announced by the head of the Statistics Korea pursuant to Article 22 of the Statistics Act (hereinafter referred to as "Korean Standard Industrial Classification"). <Amended by Presidential Decree No. 23466, Dec. 30, 2011>
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 5 (Agent) (1) An employer may appoint an agent and have the agent do what the employer shall do under the Act and this Decree.
(2) When an employer appoints or dismisses an agent, he/she shall report this to the Korea Workers Compensation and Welfare Service under Article 10 of the Industrial Accident Compensation Insurance Act (hereinafter referred to as "Service"). <This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Chapter Ⅱ Establishment and Termination of Insurance Relationship
Article 6 (Conditions for Blanket Application for Businesses) (1) "Conditions prescribed by the President Decree" in Article 8 (1) 3 of the Act refers to business done by a person falling under any of the following subparagraphs: <Amended by Presidential Decree No. 23282, Nov. 1, 2011>
1.A constructor prescribed in subparagraph 7 of Article 2 of the Framework Act on the Construction Industry;
2. A housing constructor prescribed in Article 9 of the Housing Act;
3. A constructor prescribed in subparagraph 3 of Article 2 of the Electricity Construction Business Act;
4. An information and communications-related constructor prescribed in subparagraph 4 of Article 2 of the Information and Communications Work Business Act;
5. A fire-fighting system constructor prescribed in Article 2 (1) 2 of the Fire-fighting Service Act; and
6.A businessman engaging in repairing cultural properties prescribed in Article 27 of the Protection of Cultural Properties Act.
(2) An employer who intends to get approval for blanket application pursuant to the former part of Article 8 (2) of the Act shall apply to the Service.
(3) An employer who intends to get approval for the cancelation of blanket application pursuant to the former part of Article 8 (3) of the Act shall apply to the Service for this no later than seven days before the beginning of the following insurance year . <This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 7 (Blanket Application for Contract Business) (1) "Business prescribed by the Presidential Decree, such as construction business" in Article 9 (1) of the Act refers to construction business.
(2) Recognizing a subcontractor as an employer pursuant to the proviso of Article 9 (1) of the Act shall be limited to cases where a subcontractor is the employer of a business under Article 6 (1).
(3) If an original contractor intends to have a subcontractor to be recognized as an employer pursuant to the proviso of Article 9 (1) of the Act, the original contractor shall sign a written contract with the subcontractor over the takeover of responsibility for paying premiums and apply for approval for recognition of the subcontractor as an employer to the Service within 30 days from the starting date of the subcontracted work.
(4) If subcontracted work for which an original contractor applies for approval for recognition of a subcontractor as an employer pursuant to paragraph (3) has any of the following reasons, the Service shall not approve recognition of the subcontractor as an employer: <Amended by Presidential Decree No. 23910, Jun. 29, 2012>
1.Where a work-related accident under subparagraph 1 of Article 5 of the Industrial Accident Compensation Insurance Act happens from the 15th day after the start of the subcontracted work until the application for approval is made; and
2.Where a work-related accident under subparagraph 1 of Article 5 of the Industrial Accident Compensation Insurance Act happens from the start of the subcontracted work until the application for approval is made, and with regard to the accident, insurance benefits shall be collected from the original contractor pursuant to Article 26 (1) 1 of the Act.
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 8 (Notification of Establishment and Termination of Insurance Relationship)
The Service shall, if an insurance relationship is established or terminated, inform the employer concerned of this without delay.
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 9 (Report of Changes in Insurance Relationship)
Pursuant to Article 12 of the Act, an employer shall, if any change is made to any of the following matters concerning his/her business covered by insurance, report this to the Service within 14 days of the date on which the change is made: Provided, That subparagraph 6 shall be reported within 14 days from the first day of the following insurance year:
1.The name and resident registration number of the employer (the representative, in the case of a corporation);
2. The name and location of the business;
3. The type of the business;
4. Business registration number (including corporation registration number in the case of a corporation);
5. Business period, in cases of a business with a fixed term, such as construction work or logging; and
6. The number of ordinarily employed workers, in cases where any change is made to entitlement to preferentially supported enterprises under Article 12 of the Enforcement Decree of the Employment Insurance Act.
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 10 (Vicarious Payment of Premiums by Persons Ordering Construction Work) (1) Where the State, a local government, or a public institution under the Act on the Management of Public Institutions, or any other institution to which the State or a local government contributes orders construction work, it may pay premiums on behalf of the original contractor after obtaining approval from the Service, if premiums are clearly stated in the construction cost and the original contractor agrees.
(2) A person who vicariously pays premiums pursuant to paragraph (1) shall, if any change is made to the following matters, report this to the Service without delay:
1. The name and location of the person who vicariously pays premiums and the name of the representative; and
2. The cost, period and contents of the construction work.
(3) If it becomes unnecessary to vicariously pay premiums, or if it is deemed that there is any other justifiable reason, the Service may revoke its approval for the vicarious payment of premiums, as prescribed by the Ordinance of the Ministry of Employment and Labor .
(4) If revoking its approval for the vicarious payment of premiums pursuant to paragraph (3), the Service shall inform the person who vicariously pays premiums and the original contractor of the fact without delay.
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 11 (Determination of Labor Cost Ratio, etc.) (1) The methods of determining a labor cost ratio (hereinafter referred to as "labor cost ratio") under Article 13 (6) of the Act are described in the following subparagraphs:
1.The labor cost ratio for construction work shall be determined and announced by the Minister of Employment and Labor, separately for general construction work and for subcontracted construction work, in consideration of the proportion, etc., of the sum of all the total remuneration paid to workers by employers who were engaged in the construction business during the three years prior to June 30 of the year at the time of calculation (hereinafter referred to as "base insurance year") in the sum of all the total construction costs of the same employers; and
2.The labor cost ratio for logging shall be determined and announced by the Minister of Employment and Labor in consideration of the proportion, etc., of the sum of all the total remuneration paid to workers by employers who were engaged in the logging business during the three years prior to June 30 of the base insurance year concerned in the sum of all logging expenses of the same employers and shall be expressed as the amount of remuneration per unit volume of lumber. <Amended by Presidential Decree No. 22269, Jul. 12, 2010>
(2) The methods of determining the amount of estimated total wages or total wages based on the labor cost ratio for construction work shall be as follows:
1.The amount of estimated total remuneration shall be produced by multiplying the total construction cost by the labor cost ratio: Provided, That if the amount of estimated total remuneration produced based on the labor cost ratio exceeds 90/100 of the contract amount, 90 /100 of the contract amount shall be the amount of estimated total remuneration; and
2.The amount of total remuneration shall be produced by adding the total remuneration paid to workers directly employed for the construction work concerned to the total cost of subcontracted construction work (excluding the cost of subcontracted construction work performed by subcontractors who get approval from the Service pursuant to the proviso of Article 9 (1) of the Act) multiplied by the labor cost ratio for subcontracted construction work. The equation for this calculation shall be as follows:
(3) In the case of logging businesses, the amount of estimated total remuneration or total remuneration shall be produced by multiplying the volume of lumber by the labor cost ratio.
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 12 (Employment Insurance Premium Rate) (1) The employment insurance premium rates under Article 14 (1) of the Act shall be as follows: <Amended by Presidential Decree No. 22807, Mar. 30, 2011 and Presidential Decree No. 24650, Jun. 28, 2013>
1.The premium rate for employment security and vocational skills development projects: the insurance premium rate determined according to the following classification:
A. A business which has less than 150 ordinarily employed workers: 25/10,000;
B. A business which has 150 ordinarily employed workers or more and falling within the scope of preferentially supported enterprises prescribed in Article 12 of the Enforcement Decree of the Employment Insurance Act: 45/10,000;
C. A business which has 150 or more but less than 1,000 ordinarily employed workers and not falling under item B: 65/10,000; and
D. A business which has 1,000 ordinarily employed workers or more and not falling under item B and a business directly conducted by the State and a local government: 85/10,000
2. The premium rate for unemployment benefits: 13/1,000
(2) In applying paragraph (1) 1, the number of ordinarily employed workers shall be the sum of the numbers of workers ordinarily employed in all businesses at home conducted by the employer concerned: Provided, That in the case of a business which supervises public housing under subparagraph 2 of Article 2 of the Housing Act, the number of ordinarily employed workers shall be calculated by type of business.
(3) In applying paragraph (1) 1, a subcontractor who becomes an employer subject to the Act pursuant to the proviso of Article 9 (1) of the Act shall be subject to the premium rate for employment security and vocational skills development projects applicable to the original contractor: Provided, That in regards to each of the businesses run by an employer who becomes subject to blanket application pursuant to Article 8 of the Act, if the subcontractor is deemed an employer subject to the Act pursuant to the proviso of Article 9 (1) of the Act, the premium rate for employment security and vocational skills projects applicable to the employer who is the subcontractor concerned shall be applied.
(4) Notwithstanding paragraphs (1) 1 and (2), if a business is transferred or merged during the insurance year, the premium rate for employment security and vocational skills development projects applicable before the transfer and merge shall be applied to the transferred or merged business during the insurance year concerned.
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 13 (Public Announcement of Industrial Accident Compensation Insurance Premium Rate)
When the Minister of Employment and Labor has determined premium rates (hereinafter referred to as "industrial accident compensation insurance premium rate") for industrial accident compensation insurance (hereinafter referred as "industrial accident compensation insurance") pursuant to Article 14 (3) of the Act, he/she shall announce it, along with the kinds and contents of the businesses to which the premium rates are applied, through an official gazette and general daily newspapers, etc., with a nationwide circulation under Article 9 (1) of the Act on the Promotion of Newspapers, etc. <This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 14 (Application of Industrial Accident Compensation Insurance Premium Rate) (1) If a same employer carries out two or more businesses whose types are different under Article 14 (3) of the Act in the same workplace, the industrial accident compensation insurance premium rate applicable to the principal business (hereinafter in this Act referred to as "principal business") which accounts for a larger share than others in terms of the number of workers, total remuneration, etc., shall be applied to all the businesses in the workplace .
(2) The principal business under paragraph (1) shall be determined in the following order:
1. Business with more workers than others;
2. Business with more total remuneration than others, in cases where the number of workers is equal or it is impossible to know the number of workers; and
3.Business manufacturing goods or providing services with larger sales volume than others, in cases where the principal business cannot be determined pursuant to subparagraphs 1 and 2.
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 15 (Business Subject to Special Case for Industrial Accident Compensation Insurance Premium Rate) (1) "Businesses prescribed by the Presidential Decree" in Article 15 (2) of the Act refers to the following businesses: <Amended by Presidential Decree No. 25587, Sep. 3, 2014>
1. Businesses in the construction industry which are subject to blanket application under Article 8 (1) and (2) of the Act and whose total value of construction work done for the insurance year two years prior to the current insurance year is two billion won or more; and
2. Businesses, other than construction and logging businesses, which have ten ordinarily employed workers or more
(2) In applying the special case (hereinafter referred to as "merit rate") for determination of industrial accident compensation insurance premium rates under Article 15 (2) of the Act, the number of ordinarily employed workers under paragraph (1) 2 shall be calculated according to Article 2 (1) 3 A, and the calculation period shall be from July 1 of the year before the base insurance year until June 30 of the base insurance year.
(3) If the type of a business subject to the industrial accident compensation insurance premium rate under paragraph (1) has changed during the three years prior to June 30 of the base insurance year, the merit rate shall not be applied to the business: Provided, That even in cases where the type of business has changed, if major working conditions for the business concerned, such as machine facilities, work process, etc. are deemed not to have changed, the merit rate shall apply.
(4) "Business prescribed by the Presidential Decree" in Article 15 (3) of the Act refers to any business ordinarily employing fewer than 50 workers in the manufacturing industry.
<Newly Inserted by Presidential Decree No. 25047, Dec. 30, 2013>
(4) The relevant insurance year applicable when calculating the number of ordinarily employed workers under paragraph (4) shall be the insurance year in which the recognition of the industrial accident prevention activities under Article 18-2 is obtained. <Newly Inserted by Presidential Decree No. 25047, Dec. 30, 2013>
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 16 (Ratio of Insurance Expenditure to Revenue for Application of Merit Rate)
"The ratio prescribed by the Presidential Decree" in Article 15 (2) of the Act refers to more than 85/100 or 75/100 or less.
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 17 (Calculation of Ratio of Insurance Expenditure to Revenue for Application of Merit Rate) (1) In case of calculating the ratio of industrial accident compensation insurance benefits to industrial accident compensation insurance premiums (hereinafter referred to as "industrial accident compensation insurance premiums" ) pursuant to Article 15 (2), the amount of industrial accident compensation insurance premiums shall be the sum of the following amounts as of June 30 of the base insurance year:
1. In the case of the base insurance year: The sum of monthly insurance premiums (hereinafter referred to as "monthly insurance premiums") under Article 16-3 (1) of the Act from January to June [in the case of a business falling under Article 19-2, an amount equivalent to 1/2 of estimated insurance premium (hereinafter referred to as "estimated premiums") under Article 17 (1) of the Act]
2. In the case of the two insurance years preceding the base insurance year: The sum of premiums (hereinafter referred to as "calculated premiums") calculated pursuant to Article 16-9 (1) and (2) of the Act [in the case of a business falling under Article 19-2, the sum of final premiums (hereinafter referred to as "final premiums") under Article 19 (1) of the Act]
3.In the case of the three insurance years preceding the base insurance year: An amount calculated according to the following formula.
(amount of final premiums or calculated premiums for the insurance year three years before the base insurance year) × 6 ÷ (total number of months during which insurance relations continue in the insurance year three years before the base insurance year)
(2) In calculating the ratio of industrial accident compensation insurance benefits to industrial accident compensation insurance premiums pursuant to Article 15 (2) of the Act, the amount of industrial accident compensation insurance benefits shall be the sum of all industrial accident compensation insurance benefits determined to be paid (referring to the causal act for disbursement; hereinafter the same shall apply) from July 1 of the insurance year three years prior to the base insurance year to June 30 of the base insurance year. In such cases, if industrial accident compensation insurance benefits determined to be paid are disability or survivors' compensation annuities, it shall be deemed that the lump-sum disability or survivors' compensation are determined to be paid when the payment of such annuities is first determined .
(3) In calculating the sum of industrial accident compensation insurance benefits pursuant to the former part of paragraph (2), the amount of insurance benefits falling under any of the following subparagraphs shall not be added: <Amended by Presidential Decree No. 23910, Jun. 29, 2012>
1.The amount of vocational rehabilitation benefits under Article 72 of the Industrial Accident Compensation Insurance Act;
2.The amount of insurance benefits determined to be paid due to an accident caused by a third person's action under Article 87 (1) of the Industrial Accident Compensation Insurance Act (excluding the amount of insurance benefits corresponding to the proportion that is not recognized as the third person's faults by a court's final ruling, etc.); and
3.The amount of insurance benefits determined to be paid in a situation where although pneumoconiosis under Article 91-2 of the Industrial Accident Compensation Insurance Act, noise-induced hearing loss under subparagraph 5 of Table 3 of the Enforcement Decree of the same Act and asbestos-related diseases under subparagraph 20 of the same Table have a significant causal relationship with work, so many workplaces are exposed to harmful and hazardous elements that it is not clear which workplace provides the main cause of such diseases.
4.The amount of insurance benefits determined to be paid for accidents that occur due to inevitable reasons, such as natural disasters or power failures, etc.
(4) With regard to the amount of insurance benefits under the proviso of paragraph (3), the date on which the court delivers its final ruling shall be considered the date on which the insurance benefits concerned are determined to be paid.
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 18 (Increase or Decrease Rates of Merit Rates) (1) An increase or decrease in industrial accident compensation insurance premium rates under Article 15 (2) of the Act shall be subject to the rates specified in the attached Table 1.
(2) When the Service has decided to raise or lower industrial accident compensation insurance premium rates pursuant to Article 15 (2) of the Act, it shall inform the employer concerned of the increased or decreased premium rates without delay.
<This Article Wholly Amended by Presidential Decree No. 22408, Sep. 29, 2010>
Article 18-2 (Application of Accident Prevention Premium Rate) (1) The accident prevention activities under Article 15 (4) of the Act shall be any of the following activities: <Amended by Presidential Decree No. 25251, Mar. 12, 2014>
1. An employer has conducted a risk assessment with regard to hazards caused by structures, machines, instruments, equipment, raw materials, gas, vapor, dust, etc., work behavior or any other work pursuant to Article 41-2 (1) of the Occupational Safety and Health Act;
2. An employer has completed an accident prevention education determined and announced by the Minister of Employment and Labor and established an industrial accident prevention plan to prevent accidents in the workplace.
(2) The percent by which the industrial accident compensation insurance premium rate shall be decreased for each type of accident prevention activity referred to in paragraph (1) shall be the percent calculated using the respective formulas below, and the resulting percent shall be rounded off to the nearest thousandth. In such cases, if an employer has carried out two or more accident prevention activities (including cases where an employer has carried out the same accident prevention activity twice or more), the decrease rate applicable in the insurance year concerned shall be the higher one of the two figures calculated using the following formulas:
1.In the case of paragraph (1) 1:
20 × number of days recognized for accident prevention activities in the previous year
100 x 365
2.In the case of paragraph (1) 2:
10 x number of days recognized for accident prevention activities in the previous year
100 x 365
<This Article Newly Inserted by Presidential Decree No. 25047, Dec. 30, 2013>
Article 18-3 (Recognition Period for Accident Prevention Activities) (1) The recognition period by type of accident prevention activity under Article 15 (4) of the Act shall be the period determined according to the following classification:
1. In the case of Article 18-2 (1) 1: for three years from the date of obtaining recognition of accident prevention activities;
2. In the case of Article 18-2 (1) 2: for one year from the date of obtaining recognition of accident prevention activities.
(2) Even in the event that an employer who has obtained recognition of accident prevention activities exceeds the number of ordinarily employed workers specified in Article 15 (4) during the recognition period for accident prevention activities under paragraph (1), the accident prevention premium rate shall be applied.
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