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Went to the Labor Board
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Wildbore



Joined: 17 Jun 2009

PostPosted: Mon Aug 06, 2012 7:57 am    Post subject: Went to the Labor Board Reply with quote

I completed a contract in March, and I had a problem with getting my final pay from a Hagwon. My Korean friend went to the Hagwon 5 weeks later, and they paid me some money. But, the Hagwon still underpaid me my final pay by about 500,000. Also, this wasn't the first time, in 2011, they randomly changed my salary from 2,100,000 down to 2,000,000 for 3 months when they had a shortage of students. After this occurred, I repeatedly confronted the director, they raised my pay back to normal, but they never made up for the 3 months paid low.

Also, they seem to have taken a few extra health/pension deductions than they were suppose to. I was registered with the NHIC/NPS for 23 months, however, my first 2 months in Korea I wasn't registered, but they still made 2 extra monthly deductions and just pocketed them. Very dodgy behavior. Pension office said before registration, it's an unpaid wage/illegal deduction issue, and to go to the Labor Board.

I went to the Labor Board 6 days ago with a Korean friend, and the clerk took my completed wage claim form and I received a text message with a case # two hours later. My friend said I must return another day in a few weeks and explain these problems to a Labor inspector, this date will be sent by message or mail. I also must present my contract, paystubs, and bank statement, which I kept.

When I'm done explaining these issues, does anyone know how effective the Labor Board is with dealing with these problems. I feel compelled to follow through 100% because I don't want the new foreigner there to get screwed this way and I'd like get what I worked for.

Fortunately, I working at another academy in the same city, so everything can be done in-person, which may make it easier.
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Troglodyte



Joined: 06 Dec 2009

PostPosted: Mon Aug 06, 2012 8:44 am    Post subject: Reply with quote

I've heard mixed results from friends. I've also had mixed results but I think that they've improved a lot (my bad experiences with them were years ago). If it's a small hogwon and the owner doesn't care much about his reputation (e.g. maybe he's planning on eventually shutting down the hogwon and opening a noodle restaurant or a convenient store) then it might take months to resolve it and force the guy to pay you your money. Still, the simple fact that you've reported the guy means that he's going to have that on record. The next time that someone files a complaint and the labor board has to decide on it (especially if it comes down to "he said" vs "employee said") then his credibility will be lower to start with.

If he's not paying into taxes as he should then the tax office and the pension office (who DO have teeth) will not only pressure him to pay what's owed but they might also take a closer look at his business to see if maybe he's cooking the books and cutting corners elsewhere.
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iggyb



Joined: 29 Oct 2003

PostPosted: Mon Aug 06, 2012 8:49 am    Post subject: Reply with quote

Like he said, in general, the Labor Boards have gotten much better and more used to dealing with expats and hakwons. I've also read they have gotten some muscle added to them over the years, but I am not certain about that.

Even in the old days, just getting a call from the Labor Board could scare owners into coughing up the money.

I also second what was said about going to the tax and pension offices to check what was actually turned in by the hakwon. If he has them coming for him to, he'll be in a tight spot.
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Wildbore



Joined: 17 Jun 2009

PostPosted: Tue Aug 07, 2012 6:05 am    Post subject: Reply with quote

The tax situation is a complete mess. He withheld taxes based on my actual salary, but reported my income as about half as much. He was remitting only based on the reported amount. He was basically pocketing most of the deductions. Apparently he did this to the teacher before me too, so almost for 3 years.

My pension account was low by 1,600,000, as I discussed in another thread a months back. Still getting that resolved, he is scheduled for an audit sometime. I'm not too concerned about taxes/contributions, as directors' are usually personally liable in cases of tax fraud/embezzlement. Even though his business is in the dumpster, he will have to pony up that money from somewhere else.

The Labor Board will be interesting though. I got another message from the Labor Office today, I met with the case worker to discuss the particulars next week. Also, they arranged the meeting at a time that doesn't interfere with my new job.
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CentralCali



Joined: 17 May 2007

PostPosted: Tue Aug 07, 2012 7:26 am    Post subject: Reply with quote

You are the one responsible for ensuring your taxes have been deposited with the tax authorities. So, your boss yanked the correct amount from you and deposited what would have been the correct amount for a lower salary. That means two things: 1-you owe taxes, and 2-you have another complaint against the boss at the Labor Board: illegal withholding of salary.

The pension issue is the easiest: you are supposed to deposit ~4.5% of your salary and the boss is to match that. A common ruse is for the boss to take your contribution based on your actual salary and then deposit that with the Pension Office, while declaring to the P.O. that your salary is one-half its actual amount. Show the P.O. your contract, your bank book, and (if available) any pay slips the boss gave you. The P.O. will order the boss to pay the amount the boss owes on your behalf by a certain date. If he fails to pay, the P.O. will simply take the money. If the boss had not been deducting your payment at all or, quite unlikely, deducting it at a lower rate in the first place, then the P.O. will order you to pay to your boss what you owe and order the boss to match your total contribution.

You can bet your bottom dollar that the boss will do what he can to avoid and/or delay the issue at the Labor Board. For your own protection and also to be prepared, designate someone now in writing to appear on your behalf at the Labor Board for when you cannot show. I would not count on "meeting at a time that doesn't interfere" with the job to remain true for the duration.
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iggyb



Joined: 29 Oct 2003

PostPosted: Tue Aug 07, 2012 8:05 am    Post subject: Reply with quote

None of the stuff you mentioned will be new for the Labor Board people. These are all common habits of shady hakwons. It will be something the LB has seen before and most likely something they are trained on, because it happens so often...
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Wildbore



Joined: 17 Jun 2009

PostPosted: Tue Aug 07, 2012 8:35 am    Post subject: Reply with quote

CentralCali wrote:
You are the one responsible for ensuring your taxes have been deposited with the tax authorities. So, your boss yanked the correct amount from you and deposited what would have been the correct amount for a lower salary. That means two things: 1-you owe taxes, and 2-you have another complaint against the boss at the Labor Board: illegal withholding of salary.


However, it is illegal for an employer to file a false income report for an employee. He will have to correct that as well, which means I don't owe anything.

Korean tax law places salary reporting, tax withholding, and the year-end settlement SOLEY on the employer. He is also, by law, required to issue a copy of the year-end settlement to the employee after each tax-year. He didn't do that, even after I requested it.

For an indepedent contractor, however, it is a legal requirement to file a tax return each year, which may result in taxes due or taxes returned.

However, if in the unlikely chance the tax office does ask me for more taxes, I will simply add that to my wage claim.

CentralCali wrote:
The pension issue is the easiest: you are supposed to deposit ~4.5% of your salary and the boss is to match that. A common ruse is for the boss to take your contribution based on your actual salary and then deposit that with the Pension Office, while declaring to the P.O. that your salary is one-half its actual amount. Show the P.O. your contract, your bank book, and (if available) any pay slips the boss gave you. The P.O. will order the boss to pay the amount the boss owes on your behalf by a certain date. If he fails to pay, the P.O. will simply take the money. If the boss had not been deducting your payment at all or, quite unlikely, deducting it at a lower rate in the first place, then the P.O. will order you to pay to your boss what you owe and order the boss to match your total contribution.


Well, that is likely what will happen. I went to the pension office a month ago and explained the problem, they told me they would go after him for that money. I'm not taking the lump-sum refund soon, so I'm not in a hurry for that.

CentralCali wrote:
You can bet your bottom dollar that the boss will do what he can to avoid and/or delay the issue at the Labor Board. For your own protection and also to be prepared, designate someone now in writing to appear on your behalf at the Labor Board for when you cannot show. I would not count on "meeting at a time that doesn't interfere" with the job to remain true for the duration.


Actually, it may not matter much since I work afternoons and most Labor Board business is done in the mornings. However, that is a good idea. I living in the same city for at least another year, if he tries to delay, well, it doesn't bother me that much. Might matter when I decide to go after backpay interest as well.
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FriendlyDaegu



Joined: 26 Aug 2012

PostPosted: Wed Dec 05, 2012 2:53 am    Post subject: Re: Went to the Labor Board Reply with quote

Wildbore wrote:
My friend said I must return another day in a few weeks and explain these problems to a Labor inspector, this date will be sent by message or mail.


Did you go to this, Wildbore? I'm interested to hear how it went and what followed.
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newb



Joined: 27 Aug 2012
Location: Korea

PostPosted: Wed Dec 05, 2012 3:21 am    Post subject: Re: Went to the Labor Board Reply with quote

FriendlyDaegu wrote:
Wildbore wrote:
My friend said I must return another day in a few weeks and explain these problems to a Labor inspector, this date will be sent by message or mail.


Did you go to this, Wildbore? I'm interested to hear how it went and what followed.


LB has more muscle than most people think. The labor inspector in charge of your case has the power to file criminal charges against the employer who has violated the labor code. The employer can be slapped with severe fine and some jail time if he/she chooses not to right the wrong.

I certain that the OP's case has been resolved in his favor.
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CentralCali



Joined: 17 May 2007

PostPosted: Wed Dec 05, 2012 3:33 am    Post subject: Reply with quote

Wildbore wrote:
For an indepedent contractor, however, it is a legal requirement to file a tax return each year, which may result in taxes due or taxes returned.


I just noticed this. Did you sign on as an independent contractor? My advice to all and sundry is: QUIT SIGNING CONTRACTS LIKE THAT! If you're on an E-2 visa, it's simply asinine to do that to yourself. And it very well may be illegal anyway, regardless of how the tax office handles the money (they're just interested in processing the funds) or certain posters on this board feel about the issue.

By the way, your boss reminds me a lot of that witch (she puts the "B" in "Witch," if you know what I mean) that I worked for back in 2005. Her position on the deductions she took from our salaries was, "Well, the contract says I'll deduct the pension payments from your salary, but it doesn't say that I'll actually turn that money over to the Pension Office; I'll just hold it for you." Yeah, right.
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YTMND



Joined: 16 Jan 2012
Location: You're the man now dog!!

PostPosted: Wed Dec 05, 2012 6:09 am    Post subject: Reply with quote

Quote:
When I'm done explaining these issues, does anyone know how effective the Labor Board is with dealing with these problems.


What is the total amount you are trying to collect on? From a few hundred thousand along with a 500,000 it isn't much in my opinion. It is definitely far from the worst.

If it were a situation where they stopped paying after the 6th month into pension, cheated on things like salary, withheld severance, delayed airfare, etc... then I feel you would have a stronger case with Labor Board.

I am not saying don't do it, but realize that even 1,000,000 isn't going to get the attention you might be hoping for. Be prepared to settle for some amount and move on.
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s.tickbeat



Joined: 21 Feb 2010
Location: Gimhae

PostPosted: Wed Dec 05, 2012 5:08 pm    Post subject: Reply with quote

What helps a lot at the labor board, and makes things go smoothly and efficiently, is to have ALL of your paperwork ready.

1) banks statements, with relevant deposit information highlighted

2) a copy of your original contract from Immigration, highlighting salary, health insurance, and pension sections

3) A history of your tax payments from the tax office.

4) A history of pension contributions from the pension office.

5) A history of health insurance payments from the health insurance office

Write up a bill for the director, citing relevant information from the paperwork you've gathered, and take it with you to the meeting. Keep a copy of ALL OF IT and give the original to your caseworker.
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Wildbore



Joined: 17 Jun 2009

PostPosted: Wed Dec 05, 2012 9:51 pm    Post subject: Reply with quote

CentralCali wrote:
Wildbore wrote:
For an indepedent contractor, however, it is a legal requirement to file a tax return each year, which may result in taxes due or taxes returned.


I just noticed this. Did you sign on as an independent contractor? My advice to all and sundry is: QUIT SIGNING CONTRACTS LIKE THAT!


No, this case does not involve an independent contractor contract. I was just stating a fact.
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Wildbore



Joined: 17 Jun 2009

PostPosted: Wed Dec 05, 2012 9:58 pm    Post subject: Re: Went to the Labor Board Reply with quote

FriendlyDaegu wrote:
Wildbore wrote:
My friend said I must return another day in a few weeks and explain these problems to a Labor inspector, this date will be sent by message or mail.


Did you go to this, Wildbore? I'm interested to hear how it went and what followed.


At the first Labor Board meeting on August 15th I presented my evidence about my final 3 months (Jan, Feb, Mar 2012) pay being wrong (W1,100,000 missing). The director showed up and stated I took 10 unpaid vacation days, and racked up my heating bill, which is why the deduction was so big. I never took a vacation, and also had photocopies of the heating bill with an amount half of his. Also, he was deducting other BS like a cell-phone which I gave back to him months before when I bought my own, and there was another deduction for 40,000 for "misc villa fees." Have no clue what that was either.

After that, I wanted to present my evidence about him fudging my tax deduction. But my ex-director said he wanted to settle that "privately" and the Labor Board person thought my ex-director would settle privately so we could go in the back room and talk more. In there, he said he would change my income report (from 1,200,000 to 2,000,000) and remit the rest of the 2,000,000 in cumulative monthly "deductions" he took for the tax, pension, health office.

So he paid the 1,100,000 for the messed up utility/unpaid vacation deductions in September. I told him if he doesn't change the income report and remit the withholding taxes I will have to add the 2,000,000 to my claim. As of now, jack has been changed at the tax office, even though he keep telling my friend some stuff is in "processing."

So I was at the Labor Board two days ago, they wanted to know if he paid me so they could close the case. I basically said no, I tried to explain his messed up tax deduction and how almost half of it was going into his pocket. My translator decided to not show up, but I had paystubs from March 2010 to Dec. 2011 (only missing January, February and March 2012). I handed those to the Labor Officer. These paystubs are garbage, they don't have business name, no stamp/signature, no itemization to separate pension, health, and income tax. Just a lump that says tax deduction and 170,000. I also handed him the month by month pension and health tax remittance data from the NPS and NHIC, as well as income tax paid data. It was quite obvious with the big gap between the 170,000 per month withholding and the about 90,000 per month remittance that there was still a problem. I told her since I don't speak Korean I will get my friend to call her later. The director never showed up for this meeting or answered his phone. I am claiming about another 2,000,000 for this.

Looks like my Labor Officer may have to do a field investigation on him. I presented my evidence, now the burden of proof is on him to justify his deductions under subordinate acts (the pension, income tax, and health act).

If my labor officer can provide me with how much of the 170,000 was deducted for each pension, health, and income tax, go to the various tax officers and try to make him remit the unpaid after after a reassessment of my income. However, without that I can only assume and the tax officers won't go after him unless I have proof (like stamped paystubs or a letter from the labor officer).

This is definitely a pain in the rear and not re-solved yet.
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Wildbore



Joined: 17 Jun 2009

PostPosted: Wed Jan 16, 2013 4:12 am    Post subject: Reply with quote

UPDATE:

It appears my ex-director finally decided to change my under-reported income, so the income tax withholding money he stole was finally sent. Also, that probably means my stolen pension money was sent too, but I need to check that tomorrow.

The Labor Board and threat to go to the tax office about the income under-report and tax theft seemed to have worked. I will have gained an extra 1,100,000 from my Labor claim, and an extra 1,600,000 will be paid into my pension.

Total win: 2,700,000.
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