What Is Changing — From Hours Worked to Wages Paid
Korea is changing the basis of employment insurance coverage for the first time in some three decades. Today, employees who work 60 hours or more a month (15 hours a week) are covered. From January 1, 2027, anyone earning KRW 800,000 or more a month will be covered regardless of hours.
The amended Employment Insurance Act and the Act on the Collection of Insurance Premiums for Employment Insurance and Industrial Accident Compensation Insurance were approved by the Cabinet on November 25, 2025 and passed the National Assembly on February 12, 2026. The Ministry of Employment and Labor then gave 40 days' advance notice of the draft enforcement decree and rules starting July 10, 2026, and the KRW 800,000 figure comes from that draft. The details below are therefore based on the pre-announced draft; please confirm the final promulgated text against the Ministry's announcements.
Who Becomes Newly Covered
Employers using part-time staff in convenience stores, cafés, logistics, private academies, and manufacturing will take on new employer contributions. At the current rate (1.15% employer share for workplaces with fewer than 150 employees), a worker paid KRW 800,000 costs about KRW 9,200 a month, or roughly KRW 552,000 a year for five such workers. The larger burden is not the amount but the added enrollment, termination, and monthly administration work.
Reporting — Annual Total Wage Report Abolished, Monthly Wage Report Introduced
The annual total wage report, filed each March, is abolished and replaced by monthly reporting.
Because the system moves from billing on the prior year's wages with a later settlement to billing on actual wages, an error in the tax filing becomes an error in the premium right away. Workplaces that outsource payroll to a tax agent need to realign when finalized payroll data is handed over.
What the New Job-Seeking Benefit Formula Means for Employers
The basis for job-seeking benefits changes from "average wages over the three months before separation" to "average monthly wages over the year before separation." Monthly reported wages become the benefit calculation record, so missing or late reports can affect a departing employee's benefit and lead to disputes. Accurate monthly reporting becomes part of an employer's risk management.
Five Things SMEs Should Do Before Year-End
Frequently Asked Questions
What happens when monthly wages move above and below KRW 800,000?
How enrollment and termination are handled for workers who cross the threshold month to month must be confirmed in the final decree and K-COMWEL guidance. Until then, the best step is to keep monthly wage records for those workers.
How does this affect daily workers?
Daily workers' insured status is already managed through the work details confirmation report. Please check the final rules for how the wage-based standard applies to them.
Are the National Pension and National Health Insurance standards changing too?
No. This reform applies to employment insurance only. The short-hour worker standards for the National Pension and National Health Insurance remain as they are, so some workers will be enrolled in employment insurance alone. Coverage must be tracked separately for each scheme.
KITIM HR and Labor Consulting
KITIM supports the practical work this transition requires, from diagnosing payroll and social insurance systems to revising employment contracts, wage ledgers, and work rules. If your workforce relies heavily on short-hour staff and you are concerned about the 2027 impact, please reach out through KITIM's consultation request. We will help you set the right order of preparation for your workforce structure.