Reasons for Proposal
According to the employment trend of May published by Statistics Korea, youth (aged 15 to 29) unemployment reached 10.5 percent, an increase of 1.3 percent compared to the previous year, hitting an all time high for May since 1999 when Statistics Korea began to collect such data.
To encourage employment of unemployed youth, the Government has implemented a compulsory hiring program that requires the heads of public institutions and local public enterprises as prescribed by Presidential Decree to employ unemployed youth for at least 3/100 of the full number of employees each year. However, critics point out that such program is rarely enforceable, and that 3 percent is insufficient to resolve the issue of youth unemployment.
Moreover, the compulsory hiring program for unemployed youth applies only to public institutions and local public enterprises specified by Presidential Decree, and as a result, the program lacks effectiveness in youth job creation.
Accordingly, the Amendment increases the compulsory hiring rate of unemployed youth to at least 7 percent, and expands the applicability thereof to include private enterprises with not less than regular employees in addition to the currently specified public institutions and local public enterprises.
Moreover, the Amendment imposes a hiring charge on an employer who fails to comply with the compulsory hiring of unemployed youth and offers a hiring subsidy to employers who fully comply with the compulsory hiring, thereby promoting youth employment and contributing to continued economic growth and social stability (Article 5, paragraph 1, Article 5-2, and Article 5-3 newly inserted).
Major Provisions
Require an employer of a private enterprise with not less than 300 permanent employees to employ unemployed youth for at least 7/100 of the number of permanent employees each year (Article 5-2)
Prescribe that the Minister of Employment and Labor shall impose and collect a charge for failing to hire unemployed youth from any employer who fails to comply with the compulsory hiring of unemployed youth (Article 5-3)
