Ministry of Employment and Labor votes to extend designation period at employment policy council

Support to continue through Nov. 20, 2027, with preferential access to job retention subsidies

Vocational training costs cut, living stability loan limits raised

Deputy Minister of Employment and Labor Kwon Chang-jun visits HD Hyundai Chemical at the Daesan Petrochemical Complex in Seosan, South Chungcheong Province, on May 26 to inspect employment conditions in the petrochemical sector. [Ministry of Employment and Labor]
Deputy Minister of Employment and Labor Kwon Chang-jun visits HD Hyundai Chemical at the Daesan Petrochemical Complex in Seosan, South Chungcheong Province, on May 26 to inspect employment conditions in the petrochemical sector. [Ministry of Employment and Labor]

The government has extended by one year the preemptive employment crisis designation for Pohang in North Gyeongsang Province and Seosan in South Chungcheong Province, where job insecurity has grown amid downturns in the steel and petrochemical industries. The extension aims to prevent the slump in each city's key industries from escalating into a full-blown employment crisis, with continued support through job retention subsidies, vocational training and living stability loans.

The Ministry of Employment and Labor said Wednesday it held the seventh Employment Policy Deliberative Council meeting of 2026 and voted to extend the preemptive employment crisis designation for both cities from the current expiry of Nov. 20, 2026, to Nov. 20, 2027.

The preemptive employment crisis designation is a system under which the government identifies areas at risk of a sharp deterioration in employment conditions before a crisis materializes and intervenes to prevent one. Rather than responding after mass unemployment has already occurred, the regime focuses on supporting businesses in retaining workers and helping workers maintain their livelihoods at the first signs of job insecurity.

Pohang and Seosan were first designated under the system last November, as worsening conditions in the steel and petrochemical sectors, respectively, fueled growing job insecurity. The government said it decided to extend the designation because the key industries in both cities continue to struggle and employment conditions have not improved.

With the extension, employers and workers in the two cities will continue to receive preferential benefits under government support programs, including job retention subsidies.

Employers who avoid layoffs during financial difficulties — instead using temporary shutdowns or leave arrangements to retain staff — will receive higher job retention subsidies. While the general rate covers between two-thirds and 90 percent of furlough or leave allowances, employers in preemptive employment crisis areas receive between 60 and 90 percent.

Vocational training costs for employers will also fall. Workers participating in training through the National Tomorrow Learning Card will see their out-of-pocket share drop from 15 to 55 percent in general areas to 0 to 20 percent in designated areas. The card's support limit will also rise from 3 million won ($2,230) to 5 million won over a five-year period.

A regional employment promotion subsidy will also be available. Employers who relocate, establish or expand a business in a designated area and then hire local residents may receive the subsidy if they meet the relevant eligibility requirements.

Financial support for workers facing job insecurity will be strengthened as well. The repayment period for living stability loans will be extended from a maximum of five years to eight years. The borrowing limit for vocational training living expense loans will rise from 20 million won to 30 million won, and the limit for wage-arrears living expense loans will increase from 10 million won to 15 million won.

However, the designation does not automatically entitle all employers and workers to support. Applicants must meet the eligibility requirements and pass the screening criteria set for each individual support program.

The government said it will continue to monitor closely whether structural difficulties in the regional industries translate into employment shocks, and will maintain its support accordingly.

"Both the steel and petrochemical industries are going through a difficult period, and the communities tied to them are experiencing employment anxiety as a result," Minister of Employment and Labor Kim Young-hoon said. "We will strengthen support to ensure that anxiety does not turn into an actual employment crisis, while closely monitoring local employment conditions and responding swiftly."


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