the mandatory self-employed workers' compensation policy will expand to a national workers' compensation system in 2027. find out who is eligible, premiums, coverage, and real-life examples.
the government is moving forward with its mandatory workers' compensation insurance policy for self-employed workers. in October 2025, the Ministry of Employment and Labor started a study on how to cover high-risk self-employed workers, and the introduction of a national workers' compensation insurance system by 2027 is in sight. This means that self-employed workers, who have been in the blind spot among working people, will finally have a safety net. as of July last year, only 0.52 percent of self-employed workers were covered by workers' compensation insurance. This is despite the fact that the accident rate for small businesses with fewer than five employees is 1.7 times higher than the overall average. This policy signals the government's intention to close this gap in protection and build a social safety net that covers all working people.
table of contents
- why mandatory self-employed workers' compensation insurance now?
- what is workers' compensation insurance and who is eligible?
- why self-employed enrollment is currently low
- a roadmap for phased expansion and a national workers' compensation system by 2027
- real-life examples of the importance of workers' compensation insurance
- how will self-employed and freelancers be different?
- how much will the premiums be?
- frequently Asked Questions
- conclusion
why self-employed workers' compensation insurance is mandatory now
mr. A, a 64-year-old air conditioning repairman, has been in business for himself since 1987. he enrolled in small business owner workers' compensation insurance in September 2020. In November 2022, he suddenly collapsed while installing an air conditioner at a customer's home. He had an acute myocardial infarction. the cause was overexertion from repeatedly moving heavy air conditioner outdoor units in a building without an elevator. Fortunately, he had workers' compensation insurance, and his family was able to receive survivor benefits and funeral expenses.
but cases like this are extremely rare. in 2020, out of 4.15 million self-employed workers, only 16,000, or 0.38 percent, were covered by workers' compensation insurance. In July 2024, the situation was not much better, with the coverage rate at 0.52 percent. The accident rate for businesses with fewer than five employees is 1.11 percent, much higher than the overall average of 0.66 percent.
in October 2025, the government launched a study on how to provide workers' compensation insurance to self-employed workers with a high risk of workplace accidents. An official from the Ministry of Employment and Labor said, "We will select self-employed workers with a high risk of workplace accidents by occupation and protect them through compulsory enrollment." We are approaching a historic turning point: from voluntary to mandatory, from optional to compulsory.
what is workers' compensation insurance and who is covered?
workers' compensation insurance, or workers' comp for short, is social insurance that protects you and your family if you are injured, sick, disabled, or killed on the job. It was first introduced in 1964 and has covered most wage earners ever since. Regular employees are automatically enrolled when they start work, and their employer pays 100 percent of the premiums.
but it's different for the self-employed. until 2020, only 12 industries could opt-in, and it wasn't until 2020 that self-employed workers in all industries were able to do so voluntarily. Any business owner with fewer than 300 employees can apply, as well as self-employed individuals. As of June 2021, coverage was extended to unpaid family workers.
workers' compensation insurance covers not only workplace injuries, but also commuting accidents, occupational diseases, diseases caused by overwork, and mental illnesses caused by workplace harassment or customer abuse. You can receive medical treatment, leave of absence, disability benefits, caregiving benefits, survivor benefits, funeral expenses, and vocational rehabilitation benefits.
why the current self-employed enrollment rate is low
there are clear reasons behind the shocking 0.52 percent enrollment rate.
first, it's a voluntary system. while employees are automatically enrolled when they join the workforce, the self-employed have to research and apply on their own. It's hard for them to fit insurance into their busy business schedule.
second, you have to pay the entire premium. while an employee's company pays 100 percent of their workers' compensation insurance premiums, the self-employed don't get a dime. As the owner of a small restaurant, I can't afford to pay an extra 30,000 won a month for insurance when I make about 3 million won a month.
third, there's low awareness: many self-employed people think workers' compensation is only for employees, and many don't even realize they're eligible.
fourth, immediate financial hardship. in the post-COVID-19 era, self-employed people are struggling to pay their rent, materials, and labor costs, let alone pay for insurance against the uncertainty of future accidents.
to address this structural problem, the government is preparing a new system that will make insurance mandatory, not optional, along with a premium support program.
a phased expansion roadmap and a national workers' compensation system in 2027
the government's roadmap consists of three phases.
the first phase will target high-risk self-employed workers from 2025 to 2026. Ongoing research will identify industries with high accident rates over the past year, followed by on-the-ground demand surveys to determine who will be prioritized for mandatory enrollment. Construction, agriculture, forestry, transportation, warehousing, telecommunications, manufacturing, and food are likely candidates.
phase 2 is the freelancer expansion phase from 2026 to 2027. 3.it will include a broader range of freelancers who pay the 3 percent business income tax, including freelancers and gig workers. Examples include software developers, delivery drivers, insurance agents, tutors, quick-service drivers, and substitute drivers.
phase 3 is the introduction of a national workers' compensation insurance system in 2027. all working citizens, from self-employed to freelancers to platform workers, will be covered by workers' compensation insurance.
the government plans to form a council of labor and management experts to reach a social consensus and come up with a plan to support premiums. Currently, the Small and Medium Business Market Promotion Corporation offers a program to support 20 percent to 50 percent of premiums for self-employed workers for up to five years. Some local governments, such as Busan, cover up to 50 percent of workers' compensation insurance premiums.
real-life examples of the importance of workers' compensation insurance
the story of Mr. A, the air conditioner repairman, illustrates the importance of workers' compensation insurance. if he hadn't been insured, his survivors would have received no compensation at all. Even the funeral expenses would have been completely covered by the family.
let's consider another case. mr. Kim, who owns a small restaurant, buys workers' compensation insurance based on his monthly salary of 3.85 million won, which is class 4. He pays 0.8 percent for the food business rate, 0.06 percent for the commuting accident rate, and 0.06 percent for the wage bond guarantee rate, for a total of 0.92 percent. i pay about 33,000 won per month. One day, I was severely burned by hot oil while cooking. I had to be hospitalized for three weeks, during which time I had to close my shop. But thanks to workers' compensation insurance, my medical expenses were fully covered by medical benefits, and I was able to live off of the benefits while I was unable to work.
in contrast, self-employed people without insurance are responsible for all expenses. this double burden of medical expenses and living expenses can put them out of business. as of 2020, 99.62 percent of the 4.15 million self-employed were unprotected against this risk.
how will self-employed workers be different from freelancers?
while self-employed individuals can still opt in today, they will be phased into mandatory enrollment by 2027. first in high-risk industries, then across all industries. restaurants, hair salons, retail, taxi drivers, truck drivers, construction laborers, and many other forms of self-employment will all be covered.
for freelancers, it's a little more complicated. the typical 3.3 percent freelancer is not currently covered by workers' compensation insurance. They are classified as business earners, pay national pension and health insurance separately as local contributors, and file a comprehensive income tax return in May. But that changes if they are recognized as a special type of worker.
a special type of worker is a person who primarily provides labor to one place, receives remuneration to live on, does not employ others, and is not a worker under the Labor Standards Act. Examples include insurance agents, ready-mix concrete drivers, study hall teachers, golf course caddies, courier drivers, quick service drivers, credit card recruiters, substitute drivers, door-to-door lecturers, door-to-door salespeople, appliance installers, lorry drivers, software developers, after-school teachers in kindergartens, and special activities teachers in daycare centers.
they are already covered and share 50 percent of the premium with their employer. When the National Workers' Compensation Insurance System is introduced in 2027, freelancers who are not classified as special types of workers will be included in a phased manner.
how much will it cost?
workers' compensation insurance premiums are calculated by multiplying your chosen monthly compensation tier by the industry-specific rate. As of 2024, monthly compensation tiers range from 2.45 million won ($2,840) for tier 1 to 7.72 million won ($7,290) for tier 12. family workers can only choose from tiers 1 through 5, and can only change tiers by the end of January each year.
rates for different industries vary according to risk. coal mining and quarrying is the highest at 18.5 percent, followed by construction at 3.5 percent, forestry at 5.8 percent, food manufacturing at 1.6 percent, electronics manufacturing at 0.6 percent, transportation and warehousing at 0.8 percent, retail and food at 0.8 percent, professional services at 0.6 percent, and financial insurance at 0.5 percent. add to that a 0.06 percent commuting injury rate and a 0.06 percent wage bond guarantee rate.
for example, if a restaurant owner who earns 3.5 million won per month chooses level 4, 3.857 million won multiplied by 0.92 percent, that's about 33,000 won per month. If you're in the manufacturing industry, your premium will be higher. if you're self-employed in the construction industry, you could pay more than 130,000 won per month at a rate of 3.62 percent.
if you receive support from the Small Business Market Promotion Corporation, you can get a discount of 20 percent to 50 percent, reducing the actual burden. you can apply through the Small Business Market Nuri website or by calling 1800-5981. Local government support can further lower the burden.
frequently asked questions FAQ
Q1. Can I really get workers' compensation insurance as a self-employed person? A. Yes, you can. any business owner with fewer than 300 employees or a sole proprietor with no employees is eligible for small business workers' compensation. It's currently voluntary, but will be phased in to mandatory by 2027.
Q2. I work alone, can my family be covered? A. Starting in June 2021, unpaid family members are eligible to enroll. if a blood relative or in-law within the fourth degree of consanguinity actually works at your business, they can apply, but they can only choose from pay scales 1 through 5.
Q3. I'm a 3.3 percent freelancer, am I eligible? A. General freelancers are not currently eligible, but if your job is designated as a special type of worker, you are required to enroll. Examples include software developers, delivery drivers, insurance agents, and tutors. When the National Workers' Compensation Insurance System is introduced in 2027, all freelancers will be included.
Q4. I can't afford the premiums, is there any support available? A. There is. the Small and Medium Business Market Promotion Agency provides support of 20 percent to 50 percent of the premium for self-employed individuals for up to five years. some local governments may also provide additional support. visit the Small Business Market Nuri website or call 1800-5981 to apply.
Q5. Can I be covered if I have an accident while commuting to work? A. Yes, you can. accidents that occur while traveling to and from work in the usual route and manner are recognized as workers' compensation. It covers not only workplace injuries but also occupational diseases, overwork illnesses, and mental illnesses.
the bottom line
mandatory self-employed workers' compensation insurance is no longer an option, it's the need of the hour. the reality of a take-up rate of 0.52 percent shows just how much the self-employed have been left out in the cold. The government has finally set out to address the paradox that small businesses have a 1.7 times higher accident rate and yet are unprotected.
the roadmap is clear, starting with a study of high-risk sectors in 2025 and ending with a national workers' compensation system in 2027. It's a thoughtful approach that builds social consensus with a phased expansion and eases the burden with premium support. a society where everyone who works enjoys the right to work safely, and where they can be treated and earn a living in the event of an accident is on the horizon.
if you are a self-employed person who has not yet enrolled, please visit the Labor Welfare Service's Nuri website or call 1588-0075 for a consultation. A few tens of thousands of won per month will protect you and your family in a crisis. It is a wise choice to prepare before it is mandatory.
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