Fully-Subsidized Company Day Care Centers for SMEs in Seoul
Now, two or more small and medium enterprises (SMEs) in Seoul can form a consortium to form a fully-subsidized company day care center for their employees. The Seoul Metropolitan Government decided to cover all the expenses for companies that open such company day care centers, besides the financial support provided by the Korea Workers’ Compensation and Welfare Service (40% of property purchase and 80% to 90% of remodeling costs).
The Seoul Metropolitan Government recognized the difficulty of resolving the fundamental issues of poor work-family compatibility and low fertility rate without first dealing with the childcare problem for parents working at SMEs, which account for most jobs in Seoul. Therefore, the city government decided to provide financial support to expand high-quality childcare facilities provided by companies. As a result, the number of day care facilities at SMEs, which had previously been neglected by the government, will be dramatically increased. This will be a significant turning point in resolving childcare issues at SMEs.
There are two different ways for companies to start a day care. Two or more SMEs can get together to start an “SME consortium company day care,” or they can start an “industrial complex co-op day care,” in areas where SMEs are concentrated, such as G Valley. Regarding the consortium type, the Korea Workers’ Compensation and Welfare Service will cover 40% of the cost to purchase property and 80% of the remodeling cost, up to a limit of KRW 600 million, and the Seoul Metropolitan Government will fund the rest, i.e. 60% of the property cost and 20% of the remodeling cost. For the industrial complex type, the Korea Workers’ Compensation and Welfare Service will provide 40% of the property purchase cost and 90% of the remodeling cost, up to a maximum KRW 1.5 billion, and the Seoul Metropolitan Government will cover the rest, i.e. 60% of the property purchase and 10% of the remodeling cost.
“Without easing the burden of childcare for parents working at SMEs, which account for most of the jobs in Seoul, any efforts to resolve the low birth rate issue and improve work-family compatibility will be futile,” commented Seoul Mayor Park Won Soon. “By offering financial support that allows SMEs to establish company day care facilities, the Seoul Metropolitan Government will gradually increase the number of low-cost company day cares, following the example of the highly efficient, low-cost public day care centers the city has already developed.”