If an employer withdraws from the Joint Labor Welfare Fund, the fund must report this to the administrative agency within three weeks.
The Ministry of Employment and Labor announced on August 18 that a revision to the Enforcement Decree of the Labor Welfare Basic Act was reviewed and approved at a Cabinet meeting.
According to the ministry, the in-house labor welfare fund is a system where companies contribute a portion of their profits to create a fund that is used to enhance the stability and welfare of employees. The Joint Labor Welfare Fund is established when two or more employers jointly contribute a portion of their profits to create a fund for the welfare of their employees.
Under the current Labor Welfare Basic Act, employers who withdraw from the Joint Labor Welfare Fund must use the assets distributed to them for the welfare of their employees. Withdrawn employers are required to either establish a new in-house labor welfare fund or contribute the distributed assets to an existing in-house labor welfare fund.
However, there has been no separate reporting procedure for administrative agencies to promptly identify when an employer withdraws from the joint fund. This has made it difficult to immediately verify whether the withdrawn employer has actually established an in-house labor welfare fund or used the distributed assets for employee welfare projects.
The revised enforcement decree mandates that if a specific employer withdraws from the Joint Labor Welfare Fund, the fund must report this fact to the administrative agency within three weeks.
The ministry will verify whether the withdrawn employer has established an in-house labor welfare fund or contributed the distributed assets to the fund based on the report. If legal obligations are not fulfilled, the ministry plans to encourage compliance and provide guidance to prevent any gaps in employee welfare.
The revised enforcement decree will take effect immediately upon promulgation. The government plans to apply the revised regulations as early as the end of this month after going through the necessary procedures.
* This article has been translated by AI.
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