Zero Cost for Companies Hiring Both Young and Middle-aged... Seoul-type Connection Contribution Implemented

[Financial News] The Seoul Metropolitan Government is taking steps to reduce the cost burden for companies practicing 'coexistence employment' of young and middle-aged people. The plan is to fully reimburse the company's contributions used to reduce wage gaps between workers if employment is maintained for a certain period.
The Seoul Metropolitan Government announced on the 20th that it will officially launch the nation's first generation-linked job contribution project, 'Seoul-type Connection Contribution', from August.
Companies participating in the Seoul-type Connection Contribution that hire both young and middle-aged people by the end of the year and maintain employment for more than a year can receive a full refund of the company's contributions (up to 2.88 million won per person, for 3 years), allowing them to operate the business without any cost burden.
Young and middle-aged workers who remain employed for more than 3 years will receive a fund of 12.24 million won per person along with compound interest. This provides opportunities to mitigate wage gaps with large companies and develop careers and build assets through stable long-term employment.
The Seoul Metropolitan Government explained that it introduced the program to improve the employment reality, which suffers from generational conflicts such as reduced youth jobs due to continued employment of middle-aged people, avoidance of small and medium-sized enterprises, frequent job changes, and the disruption of skill transfer and integration in SMEs.
The project, which is the first of its kind nationwide, will be implemented as a generational coexistence-type contribution project where the Seoul Metropolitan Government and the government collaborate to fully support the corporate burden for companies that maintain employment after hiring young and middle-aged people together this year.
When small and medium-sized enterprises located in Seoul newly (re)hire young and middle-aged citizens of Seoul, the Seoul Metropolitan Government, the government, companies, and workers jointly contribute a total of 340,000 won per month. If the worker remains employed for more than 3 years, they will receive a fund of 12.24 million won per person along with compound interest, narrowing the wage gap with large companies.
Companies that hire young and middle-aged people together this year and maintain employment for more than a year will receive a full refund of the amount paid (1.92 million won per year, up to a total of 5.76 million won for 3 years) through the 'Seoul-type Generation Connection Employment Support Fund'. This allows them to operate talent without any cost burden.
In particular, companies with excellent technology transfer and integration performance will be selected as 'Exemplary Companies for Generational Coexistence Employment' once a year and awarded, and exemplary cases will be spread.
This project is similar in structure to the existing 'Tomorrow Filling Contribution' operated by the Korea SMEs and Startups Agency, while further reducing the corporate burden. In the existing system, companies had to bear 8.28 million won per worker for 3 years, whereas the Seoul-type Connection Contribution supports 5.4 million won by the city and the government, reducing the participating company's burden to 2.88 million won.
Companies wishing to participate in the Seoul-type Connection Contribution can apply from August 1st through the Tomorrow Filling Contribution website of the Korea SMEs and Startups Agency or by mail.
The Seoul Metropolitan Government and the Korea SMEs and Startups Agency will support the budget for 3 years for companies and workers joining by 2025 until the second half of 2028. Depending on the application trend this year, they plan to continuously promote new memberships after next year.
Ju Yong-tae, head of Seoul's Economic Office, said, "We will support the Seoul-type Connection Contribution, which is being introduced nationwide for the first time, to establish itself as a sustainable coexistence employment model where young people, middle-aged people, and companies can all win-win-win, rather than just a simple accumulation."
chlee1@fnnews.com Lee Chang-hoon Reporter