Employment Crisis Area Designation Period Shortened from 12 to 6 Months...Quick Response by Including 'Daily Worker Separations'

Early Detection of Employment Shocks, Proactive Response
Daily Workers’ “Company-Driven Separation” Now Included in Indicators

The government has completely overhauled the system by easing the criteria for designating employment crisis areas and special employment support industries, as well as shortening the assessment period to six months. The aim is to detect employment shocks at an early stage and accelerate the speed of support.

A delivery motorcycle running on a street in Seoul. Photo by Jin-Hyung Kang aymsdream@

On May 4, the Ministry of Employment and Labor announced the implementation of a revised notice improving the requirements for designating employment crisis areas and special employment support industries. This revision is a follow-up measure to the Emergency Employment and Labor Situation Review Meeting held on April 13. The employment crisis area and special employment support industry system designates regions or sectors experiencing a sharp deterioration in employment and provides various forms of support, such as employment retention subsidies and vocational training. In the past, during the shipbuilding industry downturn and the COVID-19 pandemic, the government designated affected sectors and regions such as shipbuilding and tourism for support under this system.

The core of the revision is the reduction of the quantitative requirement assessment period. The previous 12-month standard has been shortened to six months, allowing short-term employment shocks to be reflected more quickly in the indicators. This measure aims to address the problem where short-term employment shocks are masked by long-term averages and to increase the sensitivity of the indicators so that responses can be made at the early stage of employment deterioration.

The quantitative requirements are comprised of four indicators: a 5 percentage point (p) decrease in the rate of change in the number of employment insurance subscribers compared to the national average; a 5% decrease in the average number of insured persons; a 5% decrease in the number of workplaces subscribed to employment insurance; and a 20% increase in the number of applicants for job-seeking benefits. If three or more of these criteria are met, designation is possible. Even if only one or two are met, designation can be granted if a qualitative assessment recognizes the necessity. Exceptionally, designation is also allowed when a sharp decrease in employment is anticipated.

In addition, the scope of job-seeking benefits applicants, a key indicator for assessing employment conditions, has been expanded. Previously, only separations due to business closure, bankruptcy, or restructuring for regular workers were included. Going forward, separations of daily workers due to company circumstances will also be included. This measure is intended to establish a more realistic indicator by reflecting the characteristics of daily workers, who face higher employment instability.

There have been continuous criticisms on the ground that the system has been operated too strictly. In particular, the long assessment period has been cited as a problem, as it delays designation and support even after an actual employment crisis occurs. The government stated that this system improvement is intended to address these limitations and establish a more agile policy response system.

The Ministry of Employment and Labor stated, "We will swiftly designate regions and industries at risk of employment slowdown by applying the improved criteria and provide timely support as needed," adding, "We will continue to closely monitor changes in the field and further refine the system."

This content was produced with the assistance of AI translation services.