South Korea revises Employment Act to bolster paternity leave support and SME hiring

The South Korean Ministry of Employment and Labour has announced a significant expansion of its workload-sharing subsidy programme to include employees who cover for colleagues on spousal childbirth leave.

Beginning July 1, the government will provide financial support to small and medium-sized businesses to compensate employees who take on extra duties when a teammate takes the 20-day spousal leave period. This policy shift, announced alongside a 41-day public notice of revisions to the Employment Insurance Act, marks a significant effort to encourage men’s participation in childcare while easing the operational burden on smaller organisations.

Under the current system, these subsidiaries are only available to those filling in for colleagues on parental leave or reduced working hours for childcare. While the government currently caps monthly payouts at 60,000 won for parental leave coverage and 200,000 won for reduced hours, the specific subsidy amount for spousal leave coverage has yet to be finalised. Labour Minister Kim Young-hoon noted that the revision is intended to provide practical support for work-life balance and improve the overall effectiveness of the employment insurance system.

READ MORE: Young talent in South Korea accepts lower starting pay as entry-level roles decline

In addition to the leave-related updates, the ministry is streamlining several regional and hiring incentives to accelerate job creation. The reporting deadline for the regional employment promotion subsidy has been shortened from 18 months to six months, allowing organisations in employment crisis zones to access funds more quickly.

Furthermore, the application window for the employment promotion incentive has been extended to 18 months after hiring, providing employers with a more flexible timeline to seek government support for new hires.