Ministry of Employment and Labor [Photo by Kim Yong-hun]
Ministry of Employment and Labor [Photo by Kim Yong-hun]

When an employer withdraws early from a joint employee welfare fund corporation, the fund must report the departure to the relevant administrative authority within three weeks under a new government rule.

The measure lets the government verify whether departing employers have properly established in-house employee welfare funds, preventing gaps in worker benefits. The Cabinet approved the amendment to the Enforcement Decree of the Workers' Welfare Basic Act, overseen by the Ministry of Employment and Labor, at its meeting Tuesday.

Under the current Workers' Welfare Basic Act, an employer that withdraws from a joint employee welfare fund corporation must use the assets distributed from the fund for the welfare of its workers — specifically by establishing a new in-house employee welfare fund or contributing the assets to an existing one.

Until now, no procedure existed for the government to verify in a timely manner whether departing employers had fulfilled these obligations. As a result, it was difficult to determine whether an employer had set up an in-house fund or whether workers had lost access to welfare benefits following a withdrawal.

The government said the decree amendment addresses this gap. Going forward, when an employer withdraws from a joint fund corporation, the corporation must report the departure to the administrative authority within three weeks.

The Ministry of Employment and Labor plans to use these reports to check whether departing employers are meeting their legal obligations — such as establishing in-house funds — and to encourage or guide compliance where necessary. The aim is to prevent workers from losing welfare benefits when their employer exits a joint fund.

The amended decree takes effect upon promulgation. The government expects the new rules to apply as early as late August, once the relevant procedures are completed.


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