Government cash grants program available for additional youth employment effective retroactively from January 1, 2018

The Korean government announced earlier on June 1, 2018 that it adopted a new program to provide cash grants for the eligible companies in an effort to encourage companies to hire more youth employees and create more jobs, which is named the Government Cash Grant Program for Additional Youth Employment (“청년 추가고용 장려금 지원사업” in Korean). An eligible company may claim for cash grants in the amount of maximum Won 9,000,000 per year and per person for the period of up to three(3) years and this applies to the newly hired youth employee from March 15, 2018 (for the youth employees hired between January 1, 2018 through March 15, 2018, cash grants will be reduced to maximum Won 6,666,660 per year and per person).

1. Summary of the program and eligibility

• Small and medium companies having 5 or more employees are the target group for this program.

• Number of youth employees who are newly enrolled in the statutory unemployment insurance should be increased in year 2018 compared to December 31, 2017 to be eligible.

• Cash grant is provided from the Ministry of Employment and Labor (MOEL) for up to Won 9,000,000 per year and per person (Won 750,000 per month and per person).

• Youth employees hired shall be in permanent position.

• Cash grant will be effective retroactively from January 1, 2018.

• Potential youth employees must be aged between 15 and 34.

• Cash grant benefit shall be applied for 3 years from the date of original hire and an extension is not allowed.

• This program can be closed earlier this year if the MOEL reaches its annual quota for year 2018 of 90,000 newly hired youth employees.

2. When and how to apply

• A company that is eligible and intends to apply for a cash grant benefit shall submit to the district office of MOEL an application with proper supporting documents (employment contract to verify permanent position, etc) no later than 6 months from the original hire date of the new youth employee. The application should be filed on a monthly basis from the following month of the original hire date and thereafter. As an exception, however, for the new youth employee hired prior to May 2018, the application can be filed by November 30, 2018 and on a monthly basis thereafter. Companies may file the application through the Employment Insurance website at       www.ei.go.kr.

• Once reviewed and approved that the company is qualified for the program by the district office of MOEL, the cash grant will be paid within 14 days from the date the application is filed