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Background. Current Status and Issues. Goals and Strategies. Ways to Improve Foreign Workforce Policy. Ways to reduce Illegal Workers. Expected Impacts. Foreign workers who are employed for simple tasks that do not require professional skills and expertise in the fields - PowerPoint PPT Presentation
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Expected ImpactsExpected Impacts
Current Status and IssuesCurrent Status and Issues
BackgroundBackground
Goals and StrategiesGoals and Strategies
Ways to Improve Foreign Workforce Policy
Ways to Improve Foreign Workforce Policy
Ways to reduce Illegal WorkersWays to reduce Illegal Workers
Composed of foreign workers who entered under the Employment Permit System(with E-9 visa) and ethnic Korean with foreign nationality who entered under the Employment Management System(with H-2 visa)
※ Industrial Trainee System(1993-2006) was abolished and unified into the Employment Permit System
Foreign workers who are employed for simple tasks that do not require professional skills and expertise in the fields of manufacturing, construction and other industries
Small and medium-sized enterprises continue to face labor shortageSmall and medium-sized enterprises continue to face labor shortage
Demand for labor increases as economy growsDemand for labor increases as economy grows
SMEs(with 300 or less employees) 2.9%(04) 3.5%(05) 3.2%(06) 3.7%(07)
Labor shortage rate by company size
Total With 300 or lessemployees
With 30 or less employees
3.2%3.7%
4.2%
Changes in labor population
81.6%75.0%
66.5%62.6%
20102010 20202020 2030203020002000
Aged from 25 to 49
Aged from 15 to 24
Demand for manual workers is expected to grow by 1.5% every year for the next 10 years(mid to long-term prospect for labor supply and demand)
Labor forces continue to decrease due to low birth rate & aging populationLabor forces continue to decrease due to low birth rate & aging population
Ⅰ. BackgroundⅠ. Background
Introduction of foreign workers addressed some of labor shortages in SMEs but falls short of meeting changes in labor demand by companies
Introduction of foreign workers addressed some of labor shortages in SMEs but falls short of meeting changes in labor demand by companies
Issues of high employment cost and complicated employment procedures were raised in managing the current foreign workforce policy
Issues of high employment cost and complicated employment procedures were raised in managing the current foreign workforce policy
Thus, unskilled foreign workforce policy should be pursued
1. considering supply and demand conditions of national labor forces
2. utilizing foreign workers efficiently in the areas that face labor shortages
3. minimizing social costs.
Thus, unskilled foreign workforce policy should be pursued
1. considering supply and demand conditions of national labor forces
2. utilizing foreign workers efficiently in the areas that face labor shortages
3. minimizing social costs.
Ⅰ. Background
6.5%
4.6%2.9% 3.2%
’05’05 ’06’06 ’07’07’04’04
5.6% 6.2%7.4%
Labor shortage rate of SMEs
5.5%
Shortage rate of skilled workers
Shortage rate of manual workers
Ⅱ. Current Status and IssuesⅡ. Current Status and Issues
Current Status
Foreigners residing in Korea number 1.15 million(as of late July 2008)
Foreign workers who are employed including skilled, unskilledand illegal workers number 720,000
General foreign workers are mainly employed in the manufacturing sector while ethnic Koreans with foreign nationality are mainly employed in the construction sites and restaurants
Total number of foreigners (1,156,287)
Number of foreign workers(720,210)
Skilled(35,291)Skilled(35,291) Unskilled(446,981)Unskilled(446,981) Illegal aliens(237,938)
Illegal aliens(237,938)
Foreign workers(150,840)
Foreign workers(150,840)
Ethnic Koreans with foreign nationality(296,141)Ethnic Koreans with foreign nationality(296,141)
Students(436,077)Students(436,077)
-Average wage is set around \1,140,000 including minimum wage(\850,000) and overtime pay
Issues
Labor Market AspectLabor Market Aspect
Numbers of foreign workers to be introduced are determined reflecting the short-term labor shortage only
Comprehensive long-term response is yet to be established
Concerns are raised about the possible replacement of domesticWorkers as increasing number of ethnic Koreans with foreignnationality are introduced
Economic AspectEconomic Aspect
Excessive cost burden not reflectingproductivity
Complicated employment·report proceduresand too frequent request of changingworkplaces
Ⅱ. Current Status and Issues
Productivity Wage
89% 87%
97%
Productivities etc. compared to domestic workers
Total employment cost
Issues
Social AspectSocial AspectInsufficient employment & sojourn support service for employers and workers-Unresolved conflict between employers and workers leads to the decrease in productivity and workers’ maladjustment to workplaces
Increase in the number of illegal workers Increase in social cost including crime·childbirth·medical service and conflicts
Appropriate number of workers
needs to be received
from short & long-term
perspective
Appropriate number of workers
needs to be received
from short & long-term
perspective
Comfortable living conditionneeds to be created &crackdown on illegal workers should continue
Comfortable living conditionneeds to be created &crackdown on illegal workers should continue
Cost reduction, productivity increase, and
stable labor supply is needed
Cost reduction, productivity increase, and
stable labor supply is needed
Ⅱ. Current Status and Issues
labor market aspect Economic Aspect Social Aspect
Controversy over the violation of human rights and damage to the nationalimage
Ⅲ.`Goals and StrategiesⅢ.`Goals and Strategies
Harmonizing with domestic labor market
Strengthening Business competitiveness Reducing social cost
Ensuring Sustainable Growth by Resolving Labor ShortageEnsuring Sustainable Growth by Resolving Labor Shortage
Supplementing domestic labor market
Supplementing domestic labor market
Focusing on employers’ demand
Focusing on employers’ demand
Setting reasonable employment cost
Setting reasonable employment cost
Ensuing user centered employment & sojourn
support
Ensuing user centered employment & sojourn
support
Measures to reduce the number of illegal workersMeasures to reduce the number of illegal workers
Government-wide effortsPreventing the occurrence
of illegal workersStrengthening crackdown
on illegal workers
1. Receiving foreign workers according to the mid to long-term vision
2. Managing the number of ethnic Korean with foreign nationality and permitted industries
1. Strengthening employers’ rights to select2. Placing restraints on the workplace changes3. Simplifying employment procedures4. Strengthening employment stability
1. Living and food expenses to be born by workers
2. Improving minimum wage
3. Reducing employers’ burden of mandatory insurances
1. Expanding public service of employment & sojourn support
2. Strengthening post employment service considering characteristics of industry
3. Creating comfortable living condition
Receiving foreign workers according to the mid to long-term vision Receiving foreign workers according to the mid to long-term vision
Aappropriate number of foreign workers are to be received reflecting changesin demographics, domestic labor market condition, and industrial demandAappropriate number of foreign workers are to be received reflecting changesin demographics, domestic labor market condition, and industrial demand
Foreign workforce isexpected to increaseForeign workforce isexpected to increase
Korea UK Netherlands Germany Japan
5.4%3.0% 3.4%
9.3%
0.3%
Proportion of foreign workers to the total employees among OECD member countries
Supplementingdomestic labor market
Supplementingdomestic labor market
Expected number of foreign workers(eg.)
present Five years later
Economic growth rate : 5-7%Proportion of foreign workers: 3-4%
10 year-term prospect for labor supply and demand will be drawn up and the appropriate number of workers to be introduced will be determined every year
750,000~750,000~1,030,0001,030,000720,000720,000
Ⅳ. Ways to Improve Foreign Workforce PolicyⅣ. Ways to Improve Foreign Workforce Policy
Foreign workforce is to be managedwith an appropriate numberConsidering domestic labor market
Foreign workforce is to be managedwith an appropriate numberConsidering domestic labor market
Focusing onEmployers’ demand
Setting reasonableEmployment cost
Ensuring user centeredEmployment & sojourn support
Managing the number of ethnic Korean withForeign Nationality and permitted industriesManaging the number of ethnic Korean withForeign Nationality and permitted industries
Number of ethnic Korean with foreign nationality to be received will be determined considering the possibility of replacing domestic workers, business demand, and employment results
Number of ethnic Korean with foreign nationality to be received will be determined considering the possibility of replacing domestic workers, business demand, and employment results
Number of ethnic Korean to be invited by relatives in Korea will be limited (less then 3 persons per 1 relative)
Inducing employment to industries that face labor shortagesInducing employment to industries that face labor shortages
For construction sector, measures requiring specialized trainingbefore employed will be established(Dec. 2008)For construction sector, measures requiring specialized trainingbefore employed will be established(Dec. 2008)
Providing incentives(Inviting family member,
Granting permanent resident status)
Providing incentives(Inviting family member,
Granting permanent resident status)
Service Industry
Construction industry
Service Industry
Construction industry
SMEs in manufacturingin rural area
Agricultural & fishing industry
SMEs in manufacturingin rural area
Agricultural & fishing industry
Ⅳ. Ways to Improve Foreign Workforce Policy
Focusing onEmployers’ demand
Setting reasonableEmployment cost
Ensuring user centeredEmployment & sojourn support
Supplementingdomestic labor market
Supplementingdomestic labor market
Strengthening employers’ rights to selectStrengthening employers’ rights to select
Setting reasonableEmployment cost
Ensuring usercenteredEmployment & sojourn support
Supplementing Domestic labormarket
Focusing on employers’ demand
Focusing on employers’ demand
Pool of availableworkers
Pool of availableworkers
SelectionProcess
SelectionProcess
Korean Language Test(KLT) passers
Manual workers: selected based on the job seekers’ roster
Manual workers: current selection process will be maintained
Workers with simple skill: selection training job placement
KLT grade+skill test grade (specified by industry)
Those who departed voluntarily after sojourn period in Korea
Present Present ImprovementImprovement
Strict restriction on workplace changes will be stipulated on the labor contract and highlighted during job orientation
Reason for changing workplace will be notified to new employers
In case workers leave workplace without employer’s fault, the limit on the number of workers allowed to hire of the concerned employer will be eased
Placing restraints on the workplace changesPlacing restraints on the workplace changes
Ⅳ. Ways to Improve Foreign Workforce Policy
Contract period: renewed every year Signing contract autonomously within 3 year limit
Abolishing mandatory departure of 1 month employment up to five years (3 + within 2)
Applying for employment permit
Selecting agency(in charge of receiving procedure including labor contract)Applying for Certificate for Confirmation of Visa Issuance
Applying for employment permit (The rest will be processed automatically)
※one-stop service is being implemented (to be completed in Feb. 2009)
Creating stable employment conditionCreating stable employment condition
PresentPresent ImprovementImprovement
PresentPresent ImprovementImprovement
To prevent labor force vacuum due to sojourn expiration, employers can apply for employment of foreign workers 4 month prior to the expiration of sojourn period (reported on June, 2008 and implemented from July)
Current receiving period of 37~41days will be reduced to 21~30 days
Simplifying Employment Procedure
Reemployment: 3 year
Requirement (1 month departure) 3 year
Ⅳ. Ways to Improve Foreign Workforce Policy
Setting reasonableEmployment cost
Ensuring usercenteredEmployment & sojourn support
Supplementing Domestic labormarket
Focusing on employers’ demand
Focusing on employers’ demand
Living and food expenses to be born by workers Living and food expenses to be born by workers
Improving standard labor contract stipulating whether living and food expenses to be provided or not
Standard for living and food expenses to be charged will be establishedby Kbiz and to be used by employers
Improving minimum wage systemImproving minimum wage system
Minimum Wage Act will be revised to set reasonable minimum wageincluding the adjustment of the limit on deductible amount for livingand food expenses from wage and probation period. Probation period will be adjusted considering language difficulty and adjustment to the workplace
To be legislated in the first half of 2009 after gathering experts’ opinionsfrom Oct. to Dec. of 2008
Standard will be set at a reasonable rate by labor and management organizations and experts
Ⅳ. Ways to Improve Foreign Workforce Policy
Supplementing Domestic labormarket
Focusing onEmployers’ demand
Ensuring user centeredEmployment & sojourn support
Setting reasonable employment cost
Setting reasonable employment cost
On voluntary basis
Ⅳ. Ways to Improve Foreign Workforce Policy
Employers’ burden of mandatory insurances to be reducedEmployers’ burden of mandatory insurances to be reduced
Employers’ burden of insurances will be relieved by allowing them to subscribe Departure Guarantee Insurance and Guarantee Insurance on voluntary basisEmployers’ burden of insurances will be relieved by allowing them to subscribe Departure Guarantee Insurance and Guarantee Insurance on voluntary basis
Employment insurance will be required for helping foreign workers adjust to workplace and providing expanded sojourn support(only for vocational skill development & employment stabilization project 2,500 won/month)
Employment insurance will be required for helping foreign workers adjust to workplace and providing expanded sojourn support(only for vocational skill development & employment stabilization project 2,500 won/month)
Measures of persuading foreign workers to apply for national pension in theirown countries will be pursued to reduce the burden on employersMeasures of persuading foreign workers to apply for national pension in theirown countries will be pursued to reduce the burden on employers
※6 countries including Vietnam and Cambodia are exempted based on the principle of reciprocity
Employers are required to subscribe social insurances and EPS insurancesEmployers are required to subscribe social insurances and EPS insurancesSocial insurances(National Pension, National Health Insurance, Industrial Accident Compensation Insurance), EPS insurances(Departure Guarantee Insurance, Guarantee Insurance)
Departure Guarantee Insurance: 70,700 won/month
Guarantee Insurance: 1,300 won/month
Supplementing Domestic labormarket
Focusing onEmployers’ demand
Ensuring user centeredEmployment & sojourn support
Setting reasonable employment cost
Setting reasonable employment cost
Strengthening post employment service considering characteristics of industryStrengthening post employment service considering characteristics of industry
Expanding public service of employment and sojourn supportExpanding public service of employment and sojourn support
Complaint-window will be open at the job center of the Ministry of LaborComplaint-window will be open at the job center of the Ministry of Labor
Post employment service by HRD Korea will be expanded to every workplacePost employment service by HRD Korea will be expanded to every workplace
Kbiz and Construction Association of Korea will be in charge of delivering Systematic post employment service for manufacturing and construction Industry respectively
Kbiz and Construction Association of Korea will be in charge of delivering Systematic post employment service for manufacturing and construction Industry respectively
Strengthening management and evaluation to enhance the quality of serviceStrengthening management and evaluation to enhance the quality of service
Ⅳ. Ways to Improve Foreign Workforce Policy
Foreign worker support center will be expanded from current 3 centersForeign worker support center will be expanded from current 3 centers
※To be operated in cooperation with information center for foreign workers of the Ministry of Justice and private sector
Setting reasonableEmployment cost
Supplementing Domestic labor market
Focusing onEmployers’ demand
Ensuing user centered employment & sojourn
support
Ensuing user centered employment & sojourn
support
Ⅳ. Ways to Improve Foreign Workforce Policy
Setting reasonableEmployment cost
Supplementing Domestic labor market
Focusing onEmployers’ demand
Ensuing user centered employment & sojourn
support
Ensuing user centered employment & sojourn
support
Creating comfortable living environmentCreating comfortable living environment
During stayingIn Korea
AfterDeparture
Enhancing understanding on the Korean culture for job seekersthrough presentations and media
Establishing and running community by sending country andhosting cultural events
Maintaining friendly relations with sending country and promoting Korea’s friendly image through workers
Providing information to the ethnic Koreans about employment situation in Korea
Allowing job placement service for ethnic Koreans to private agencies to facilitate employment Providing training on skills and how to start business to returning workersfor stable readjustment
Before entry
enhancing understanding on the employment and living condition in Korea
Providing support to help workers settle down
Creating network among returnees
Cause and current status of illegal workers
From workers’ perspective
Higher wage compared to their home country, good
living standard, etc..
From employers’ perspective
Compassionate culture, lack of consistent crackdown efforts
There are 223,229 Illegal workers, accounting for 19.3% of total number of foreigners residing in KoreaThere are 223,229 Illegal workers, accounting for 19.3% of total number of foreigners residing in Korea
(by status)short-term visitors 48.7%, foreign workers 35.3%, others 16%
Ⅴ. Ways to Reduce Illegal WorkersⅤ. Ways to Reduce Illegal Workers
CauseCause
209,841308,165
211,988
’03’03 ’04’04’02’02 ’06’06 ’08.7’08.7
154,342
223,229
Easy to hire and fire workers, weak punishment for
Illegal employment
From a social and policy perspective
Challenges
It is difficult to pursue effective foreign workforce policy as illegal workers account for half of legal workers
National image is undermined due to the increase in crime committed by foreign workers and controversy over the violation of human rights
Consistent crack down efforts are insufficient as the cooperation mechanism is not well established among Ministries
Ⅴ. Ways to Reduce Illegal Workers
Application for organizing labor union was submitted on June.3rd, 2006, rejected by the Ministry of Labor, lawsuit was filed against the MOL’s decision and is now pending in the Supreme Court
Crimes committed by foreign workers increased by 25% on annual average for the past 5 years
Measures to grant legal status to 180,000 illegal workers were taken in 2003
The trend of ignoring the law is spreading as illegal workers organize labor unions making unreasonable demands
20
Reducing illegal workers from the current 19.3% to 10% in 5 years
Reducing illegal workers from the current 19.3% to 10% in 5 years
It would be manageable when the rate goes below10%Compared to 29% of the US, 20% of Germany, 8% of Japan, and 5% of Taiwan
Improvement Measures
Establishing government-wide strategiesEstablishing government-wide strategies
Establishing ‘5 year Plans to Reduce Illegal Workers’ and report to Foreign Workforce Policy Committee(Prime Minister)
Strengthening cooperation mechanism and sharing information among Ministries
Ⅴ. Ways to Reduce Illegal Workers
Strengthening management system on the personal information of illegal workers and foreign criminals
Goals
Reducing the number of illegal workers to 200,000 by late 2008 Reducing the number of illegal workers to 200,000 by late 2008
21
Preventing the occurrence of illegal workersPreventing the occurrence of illegal workers
Strengthening immigration procedures including issuing CCVI and Screening at the port of entry
Strengthening monitoring on the sending cost preventing informal cost from arisingImplementing various programs for encouraging voluntary departure
Organizing crackdown squad composed of government officials and crackdown on illegal workers on a regular basis
Illegal workers who take the lead in organizing labor unions and staging illegal strikes will be severely cracked down※At the same time, employers who employ illegal workers will be punished
Strengthening crackdown efforts and punishment for illegal workersStrengthening crackdown efforts and punishment for illegal workers
Ⅴ. Ways to Reduce Illegal Workers
Social and national consensus needs to be reached for establishing legal employment practice
22
Expected Impacts for each area
Ⅵ.Expected ImpactsⅥ.Expected Impacts
Supporting sustainable economic growth by establishing supply base for high quality foreign labor
Reducing employment cost to meet productivity and saving time and cost taken for following the required procedures
Cost reduction : 208.1 billion won annually(4,160,000 won per company)
Cost to be reduced from sharing housing and food expenses by worekrs:156.6 billion won
Cost to be reduced from streamlining receiving procedure and Improving reemployment procedure: 51.5 billion wonVisiting cost to be reduced, waiting period to be cut, and mendatory eparture of 1 month to be abolished
Housing expense of 100,000 won(1/3 of average housing expenses) will be born by workers
Cutting social cost by reducing illegal workers and establishing global network through foreign workers
23
Efforts will be made to systemetically manage human resources at home and abroad
so that foreign workforce can be utilized to supplement domestic labor market and to meet the industrial labor demand which will
lead to the sharpening of national competitiveness
Efforts will be made to systemetically manage human resources at home and abroad
so that foreign workforce can be utilized to supplement domestic labor market and to meet the industrial labor demand which will
lead to the sharpening of national competitiveness
Efforts will be also made to achieve social integration by creating comfortable living condition
Efforts will be also made to achieve social integration by creating comfortable living condition
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