ENFORCEMENT DECREE OF THE ACT ON THE COLLECTION, ETC., OF PREMIUMS FOR EMPLOYMENT INSURANCE AND INDUSTRIAL ACCIDENT COMPENSATION INSURANCE
[Enforcement Date 01. Jul, 2008.] [Presidential Decree No.20874, 25. Jun, 2008., Partial Amendment]
Ministry of Employment and Labor (Employment Insurance Planning Division) , 044-202-7359 Ministry of Employment and Labor (Industrial Compensation Policy Division) , 044-202-7712
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. <Amended by Presidential Decree No. 19247, Dec. 30, 2005>
(1) Terms used in this Decree are defined as follows : <Amended by Presidential Decree No. 20874, Jun. 25, 2008> <Enforcement Date Jul. 1, 2008>
1. "Total construction work" refers to 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 or a whole range of work carried out in relation to preparation, finish work, etc., needed to carry out each work;
2. "Total construction amount" refers to the amount of contract costs (including the market prices of materials in case a person who issues an order supplies materials) for carrying out total construction work : Provided that in the case of construction work carried out by a person who is not a constructor prescribed in Article 2 (5) 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 Labor shall be the total construction amount; and
3. "The number of workers" is as follows : Provided that the cases prescribed in Articles 3 (3), 15 and 29 shall be subject to the provisions thereof:
(a) In case a business begins before the insurance year concerned, the number produced by dividing the sum of the numbers 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 this case, "construction amount actually recorded" refers to the amount produced by subtracting the amount of construction costs legally contracted out pursuant to the Framework Act on the Construction Industry and other relevant laws from the total construction amount actually recorded (referring to the total amount for construction work completed in the insurance year concerned), and "average monthly wages in the construction industry" refer to the average wages calculated and announced by the Minister of Labor on the basis of wages in the construction industry in the wage and working hours survey report prepared by the Minister of Labor among the designated statistics under Article 3 of the Statistics Act.
(b) In case 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 otherwise (including cases where the person issuing the order directly carries out part of the construction work), the total construction amount under paragraph (1) 2 shall be calculated by adding all contract amounts : Provided that this shall not apply, if each contract work is carried out separately and independently in terms of time and place.
Article 3 (Application of Standard Wage)
(1) "Cases where there are reasons prescribed by the Presidential Decree" in Article 3 (1) of the Act on the Collection, etc., of Premiums for Employment Insurance and Industrial Accident Compensation Insurance (hereinafter referred to as "the Act") refer to those falling under any of the following subparagraphs: <Amended by Presidential Decree No. 19247, Dec. 30, 2005>
1. In case wage-related data are nonexistent or unclear; and
2. In case 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 wage under Article 3 (2) of the Act shall be applied according to the following classification:
1. Monthly standard wages shall be applied to regular workers paid the fixed amount of wages on a monthly basis;
2. Hourly standard wages shall be applied to part-time workers, workers (hereinafter referred to as "hourly wage workers" in this Article) who are paid wages according to the number of their working hours, and workers (hereinafter referred to as "daily wage workers" in this Article) who are paid daily wages 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 wages shall be applied.
(3) The number of workers under Article 3 (1) of the Act shall be the number produced by dividing the sum of the numbers of workers who have acquired qualifications for the insured pursuant to Article 15 of the Employment Insurance Act as of the last day of each month of the previous year by the number of months of business operation in the previous year (the number of workers who have acquired qualifications for the insured pursuant to Article 13 of the Employment Insurance Act as of the date of the establishment of an insurance relationship, in case a business begins and its insurance relationship is established during the insurance year concerned). <Amended by Presidential Decree No. 20330, Oct. 17, 2007>
Article 4 (Scope of Construction Businesses, etc.)
The scope of businesses prescribed by this Decree, except as otherwise specially prescribed by this Decree, shall be subject to the Korean Standard Industrial Classification announced by the head of the National Statistical Office under the Statistics Act. <Amended by Presidential Decree No. 19247, Dec. 30, 2005>
(1) An employer may appoint an agent and have the agent perform what the employer shall perform 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 (hereinafter referred to as "the Corporation") prescribed in Article 10 of the Industrial Accident Compensation Insurance Act. <Amended by Presidential Decree No. 20874, Jun. 25, 2008>
CHAPTER Ⅱ Establishment and Termination of Insurance Relationship
Article 6 (Conditions for Blanket Application for Businesses)
(1) "The conditions prescribed by the President Decree" in Article 8 (1) 3 of the Act refer to business done by a person falling under any of the following subparagraphs: <Amended by Presidential Decree No. 20874, Jun. 25, 2008> <Enforcement Date Jul. 1, 2008>
1. A constructor prescribed in subparagraph 5 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 Article 8 (2) of the Act shall apply for this to the Corporation.
(3) An employer who intends to get approval for the cancelation of blanket application pursuant to Article 8 (3) of the Act shall apply for this to the Corporation no later than seven days before the beginning of the following insurance year.
Article 7 (Blanket Application for Contract Business)
(1) "The business prescribed by the Presidential Decree, such as construction business" in Article 9 of the Act refers to construction business.
(2) The approval given to an employer by the Corporation pursuant to the proviso of Article 9 of the Act shall be limited to cases where a subcontractor is the employer of a business prescribed in Article 6 (1).
(3) If a subcontractor intends to get approval from the Corporation pursuant to the proviso of Article 9 of the Act, the original contractor shall sign a written contract with the subcontractor over the takeover of the responsibility for paying premiums and apply for this to the Corporation within 14 days from the starting date of the subcontracted work.
Article 8 (Notification of Establishment and Termination of Insurance Relationship)
The Corporation shall, if an insurance relationship is established or terminated, notify the employer concerned of this without delay.
Article 9 (Report of Changes in Insurance Relationship)
Pursuant to Article 12 of the Act, an employer shall, if any change is made to the following matters concerning his/her business, report this to the Corporation within 14 days of the date on which the change is made: Provided that in the case of subparagraph 6, the report shall be made within 14 days from the first day of the following insurance year: <Amended by Presidential Decree No. 20330, Oct. 17, 2007>
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 (limited to businesses with a fixed term, such as construction work or logging); and
6. The number of workers (limited to cases where any change is made to entitlement to preferentially supported enterprises under Article 12 of the Enforcement Decree of the Employment Insurance Act).
Article 10 (Vicarious Payment of Premiums by Persons Ordering Construction Work) (1) In case the State, local governments, or public agencies under the Act on the Operation of Public Agencies, or other institutions to which the State or a local government contributes order construction work, they may pay premiums on behalf of the original contractor after obtaining approval from the Corporation, if premiums are clearly stated in the construction amount and the original contractor agrees. <Amended by Presidential Decree No. 20874, Jun. 25, 2008> <Enforcement Date Jul. 1, 2008>
(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 Corporation without delay :
1. The name and location of the person who vicariously pays premiums and the name of the representative; and
2. The amount, period and contents of the construction work.
(3) If it becomes unnecessary to vicariously pay premiums, or if it is deemed that there are other proper reasons, the Corporation may revoke its approval for the vicarious payment of premiums under the conditions as prescribed by the Ordinance of the Ministry of Labor.
(4) The Corporation shall, if revoking its approval for the vicarious payment of premiums pursuant to paragraph (3), notify the person who vicariously pays premiums and the original contractor of this without delay.
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 : <Amended by Presidential Decree No. 20874, Jun. 25, 2008> <Enforcement Date Jul. 1, 2008>
1. The labor cost ratio for construction work shall be determined and announced by the Minister of Labor, separately for general construction work and for subcontracted construction work, in consideration of the proportion of the sum of all wages paid to workers by employers who were engaged in construction business in the three years to June 30 of the year concerned (hereinafter referred to as "base insurance year") in the sum of all construction amounts of the same employers ; and
2. The labor cost ratio for logging shall be determined and announced by the Minister of Labor in consideration of the proportion of the sum of all wages paid to workers by employers who were engaged in logging business in the three years to June 30 of the base insurance year concerned in the sum of all logging costs of the same employers and shall be expressed as the amount of wages per unit volume of lumber.
(2) The methods of determining the amount of estimated total wages or total wages based on the labor cost ratio for construction work are described in the following subparagraphs : <Amended by Presidential Decree No. 19247, Dec. 30, 2005>
1. The amount of estimated total wages shall be produced by multiplying the total construction amount by the labor cost ratio: Provided that in case the amount of estimated total wages 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 wages; and
2. The amount of total wages shall be produced by multiplying the sum (excluding the amount for subcontracted construction work by subcontractors who get approval from the Corporation pursuant to the proviso of Article 9 of the Act) of the total amount of wages paid to workers directly employed to carry out the construction work concerned and the total amount for subcontracted construction work by the labor cost ratio for subcontracted construction work.
(3) In the case of logging businesses, the amount of estimated total wages or total wages shall be produced by multiplying the volume of lumber by the labor cost ratio.
Article 12 (Employment Insurance Premium Rate)
(1) The employment insurance premium rates under Article 14 (1) of the Act are as follows: <Amended by Presidential Decree No. 20330, Oct. 17, 2007>
1. The premium rate for employment security and vocational skills development projects shall be determined as follow:
(a) A business which employs less than 150 workers : 25/10,000;
(b) A business which employs 150 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 employs 150 or more but less than 1,000 workers and not falling under item B : 65/10,000; and
(d) A business which employs 1,000 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. Deleted. <Presidential Decree No. 19247, Dec. 30, 2005>
3. The premium rate for unemployment benefits : 9/1,000
(2) In applying the provisions of paragraph (1) 1, the number of workers shall be the sum of the numbers of workers 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 workers shall be calculated by type of business. <Amended by Presidential Decree No. 19247, Dec. 30, 2005>
(3) In applying the provisions of paragraph (1) 1, a subcontractor who becomes an employer subject to the Act pursuant to the proviso of Article 9 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 if each of the businesses run by an employer who becomes subject to blanket application pursuant to Article 8 of the Act gets approval pursuant to the proviso of Article 9 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. <Amended by Presidential Decree No. 19247, Dec. 30, 2005>
(4) Notwithstanding the provisions of 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. <Amended by Presidential Decree No. 19247, Dec. 30, 2005>
Article 13 (Public Announcement of Industrial Accident Compensation Insurance Premium Rate)
When the Minister of Labor has determined premium rates for industrial accident compensation insurance (hereinafter referred as "industrial accident 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 12 (1) of the Act on the Freedom of Newspapers and Guarantee of Their Functions. <Amended by Presidential Decree No. 19247, Dec. 30, 2005>
Article 14 (Application of Industrial Accident Insurance Premium Rate)
(1) If two or more businesses whose types are different under Article 14 (3) of the Act are carried out in the same workplace (limited to those having the same employer), the industrial accident 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 wages, etc., shall be applied to all the businesses in the workplace concerned.
(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 wages than others, in case 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 case the principal business cannot be determined pursuant to subparagraphs 1 and 2.
Article 15 (Business Subject to Special Case of Industrial Accident Insurance Premium Rate)
(1) "The businesses prescribed by the Presidential Decree" in Article 15 (2) of the Act refer to businesses described in the following subparagraphs : <Amended by Presidential Decree No. 20874, Jun. 25, 2008> <Enforcement Date Jul. 1, 2008>
1. Businesses in the construction industry which are subject to blanket application under Article 8 (1) and (2) of the Act and whose total construction amount actually recorded for the insurance year two years prior to the current insurance year is six billion won or more per year; and
2. Businesses, other than construction and logging businesses, which have thirty workers or more
(2) In applying the special case (hereinafter referred to as "merits rate") of the determination of industrial accident insurance premium rates under Article 15 (2) of the Act, the number of workers under paragraph (1) 2 shall be calculated according to the provisions of 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. <Amended by Presidential Decree No. 20874, Jun. 25, 2008> <Enforcement Date Jul. 1, 2008>
(3) If the type of a business subject to the industrial accident insurance premium rate under paragraph (1) has changed during the three years to June 30 of the base insurance year, the merits rate shall not be applied to the business concerned : Provided that this shall not apply in case the type of business has changed, but major working conditions for the business concerned, such as machine facilities, work process, etc. are deemed not to have been changed. <Amended by Presidential Decree No. 20874, Jun. 25, 2008> <Enforcement Date Jul. 1, 2008>
Article 16 (Ratio of Insurance Expenditure to Revenue for Application of Merits 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.
Article 17 (Calculation of Ratio of Insurance Expenditure to Revenue for Application of Merits Rate)
(1) In calculating the ratio of industrial accident insurance benefits to industrial accident insurance premiums (hereinafter referred to as "industrial accident insurance premiums") pursuant to Article 15 (2), the amount of industrial accident insurance premiums shall be the sum of the following amounts as of June 30 of the base insurance year: <Amended by Presidential Decree No. 20874, Jun. 25, 2008> <Enforcement Date Jul. 1, 2008>
1. An amount equivalent to 6/12 of the estimated premium amount for the base insurance year;
2. The sum of the final premium amounts for each of the two insurance years preceding the base insurance year; and
3. An amount calculated according to the following formula (Final premium amount 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 insurance benefits to industrial accident insurance premiums pursuant to Article 15 (2) of the Act, the amount of the industrial accident insurance benefits shall be the sum of all amounts of industrial accident 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 this case, if the industrial accident 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. <Amended by Presidential Decree No. 20874, Jun. 25, 2008> <Enforcement Date Jul. 1, 2008>
(3) The amount of insurance benefits determined to be paid due to an accident caused by a third party's act pursuant to Article 87 (1) of the Industrial Accident Compensation Insurance Act or inevitable reasons such as natural disasters, blackouts, etc., shall be excluded from the sum of insurance benefits under paragraph (2): Provided that the amount of insurance benefits corresponding to the proportion that is not recognized as the third party's faults by the final ruling of the court, etc. shall be added. <Amended by Presidential Decree No. 20874, Jun. 25, 2008> <Enforcement Date Jul. 1, 2008>
(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.
Article 18 (Increase or Decrease Rates of Merits Rates)
(1) An increase or decrease in industrial accident insurance premium rates under Article 15 (2) of the Act shall be subject to the rates shown in Table 1.
(2) When the Corporation has decided to raise or lower industrial accident insurance premium rates pursuant to Article 15 (2) of the Act, it shall notify the employer concerned of the increased or decreased premium rates without delay.
Article 19 (Withholding of Employment Insurance Premiums)
If an employer intends to withhold at source employment insurance premiums (hereinafter referred to as "employment insurance premiums") pursuant to Article 16 (1) of the Act, he/she shall, whenever paying wages to an insured worker, deduct the amount of employment insurance premiums to be borne by the insured worker, which are calculated on the basis of the amount of wages added by wages that have been paid irregularly since the immediately preceding regular payday, from the amount to be paid.
Article 20 (Report and Payment of Estimated Premiums)
If an employer intends to pay estimated premiums under Article 17 (1) of the Act, he/she shall submit a report on estimated premiums to the Corporation and pay estimated premiums in accordance with the statement of payment.
Article 21 (Application of Total Wages of Previous Year)
"The cases prescribed by the Presidential Decree" in Article 17 (1) of the Act refer to those where the estimated total wages for the insurance year concerned is 70/100 or more but 130/100 or less of the total wages of the previous year.
Article 22 (Payment in Installments of Estimated Premiums)
(1) The payment of estimated premiums under Article 17 (3) of the Act shall be made in four installments per year and the installment payment period is divided as follows :
1. First period : from January 1 to March 31
2. Second period : from April 1 to June 30
3. Third period : from July 1 to September 30
4. Fourth period : from October 1 to December 31
(2) Notwithstanding the provisions of paragraph (1), businesses described in the following subparagraphs shall not pay estimated premiums in installments:
1. Businesses whose insurance relationship is established after July 1 of the insurance year concerned; and
2. Businesses with a fixed period, such as construction work, etc. and the period is less than six months
(3) If the insurance relationship is established during the insurance year, the first installment payment period of the estimated premiums shall be the period described in the following subparagraphs:
1. The period from the date of the establishment of an insurance relationship to June 30, in case the insurance relationship is established between January 2 and March 31; and
2. The period from the date of the establishment of an insurance relationship to September 30, in case the insurance relationship is established between April 1 and June 30.
(4) The amount of estimated premiums to be paid for each installment payment period is as follows :
1. The amount of estimated premiums to be paid for each installment payment period pursuant to paragraph (1) shall be the amount produced by dividing the total estimated premiums for the year concerned by four; and
2. The amount of estimated premiums to be paid for each installment payment period pursuant to paragraph (3) shall be the amount produced by multiplying the total estimated premiums for the year concerned by the ratio of the sum of the number of days of each installment payment period to the total number of days between the date of the establishment of the insurance relationship and the last day of the year.
(5) An employer who pays estimated premiums in installments shall pay the amount of estimated premiums required to be paid for the first installment payment period until the payment deadline under Article 17 (1) of the Act and then the amount of estimated premiums for each succeeding installment payment period no later than the fifteenth day of the middle month of each quarter.
(6) An employer who intends to make installment payments pursuant to paragraphs (1) through (5) shall apply for paying estimated premiums in installments to the Corporation.
Article 23 (Request for Revision of Estimated Premiums)
(1) An employer who intends to make a request for the revision of estimated premiums pursuant to Article 17 (5) of the Act shall submit a revision request form containing the following matters:
1. The requester's name, address or place of residence;
2. The amount of estimated premiums before revision;
3. The amount of estimated premium after revision;
4. The reasons to make a request for revision; and
5. Other necessary matters.
(2) The Corporation shall notify the requester of the results of the request for revision within two months from the date on which it receives the request for revision under paragraph (1).
Article 24 (Adjustment of Premiums Following Changes in Premium Rates)
(1) If the Corporation intends to additionally collect or adjust downwards premiums pursuant to Article 18 (1) of the Act, it shall notify the employer of this within 20 days from the date on which the decision to increase or decrease premium rates is made.
(2) The employer notified of the additional payment of estimated premiums pursuant to paragraph (1) shall make that payment within 30 days from the date on which he/she receives the notification : Provided that the Corporation may extend a payment deadline by up to 30 days once in case it is deemed that there are justifiable reasons.
Article 25 (Standard for Downward Adjustment of Estimated Premiums)
"The standard amount prescribed by the Presidential Decree" in Article 18 (2) of the Act refers to 30/100.
Article 26 (Report, Payment, etc. of Final Premiums)
The provisions of Articles 20 and 23 shall apply mutatis mutandis to the report and payment of final premiums under Article 19 (1) of the Act and the request for the revision of final premiums under Article 19 (7) of the Act.
Article 27 (Special Cases of Premium Collection)
"The reasons prescribed by the Presidential Decree" in Article 20 of the Act refer to cases where the Corporation asks an employer twice or more to submit basic materials needed for premium calculation, such as a statement of accounts, but he/she fails to do so or where the Corporation asks an employer to complement submitted materials because of their considerable unreliability but he/she fails to complement. <Amended by Presidential Decree No. 19247, Dec. 30, 2005>
Article 28 (Exclusion, etc. from Businesses Subject to Special Cases of Collection)
(1) "The businesses prescribed by the Presidential Decree" in Article 21 (1) of the Act refer to businesses described in the following subparagraphs: <Amended by Presidential Decree No. 20874, Jun. 25, 2008> <Enforcement Date Jul. 1, 2008>
1. Construction business, including construction work, and logging business;
2. Businesses which report the establishment of their insurance relationship during the insurance year concerned but make that report after the reporting deadline under Article 11 (1) of the Act;
3. Agricultural, forestry, fishery and real estate management businesses;
4. Business conducted by the State and a local government;
5. Businesses which have no worker who has acquired qualifications for the insured pursuant to Article 15 of the Employment Insuranc
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