Korean Job Discussion Forums

asams · Joined: 17 Nov 2008

so I just have a quick question about pension

the school I used to work for, and a friend still works for, told us when we started that the owner would just pay our part of the pension as well as his and just collect the entire amount back when we leave. Supposedly it wouldn't come out of our paychecks, he would just pay twice as much, covering the amount we should pay and then he would just get the money at the end. this doesn't seem legal. is it? i only worked there a month so I know I probably won't see it and it's not enought to worry about, but I'm afraid my friend is gonna get screwed. can anyone answer clear this up a little?

ontheway · Posted: Sat Feb 07, 2009 10:26 am Post subject:

OP. Your post is not clear on one point:

The owner did not charge you for pension. He claimed he paid in both shares, both the employee's 4.5% and the employer's 4.5% (a lie I'd wager). Then he claimed he'd get back the full amount at the end (not legal and not possible).

The part that is not clear, did he pay you for his 4.5% at the end? It sounds like he withheld nothing from you and your friend and you got nothing back.

A few more questions:

Were you covered by the National Health Insurance plan? (I'd guess NO. Maybe some alternative plan.)

What was your monthly income tax withholding?

Here's my guess about your employer.

He wanted to keep you off the books. This would keep more of his business in the underground economy. So, he didn't pay any taxes, health insurance or pension for you or your friend. He may have covered you with some other health plan, just not the one legally required. If he deducted income taxes from you, he kept them for himself. He didn't steal your share of the pension money, but he didn't pay in his share and kept it for himself. Ultimately, this 4.5% of the pension tax paid by the employer, in addition to the 4.5% paid by the employee, is refundable to most E2 English teachers.

The primary benefit of such employer cheating is not what teachers on Dave's think it is. Your employer's real savings would come not from the little bit of tax and pension he skimmed off his workers. It's that his whole business would look smaller and it would greatly reduce his own personal income tax liability. That's where his big benefit would come from cheating. What he got from the workers would just be an added bonus.

Sounds like he cheated you and is cheating your friend and probably he is cheating the Korean government and breaking the law.

asams · Joined: 17 Nov 2008

i only worked there a month. supposedly he was going to pay 9%, the 4.5 for us and the 4.5 from the business side. your answer was exactly what i thought. i'm going to tell my friend to be wary. since i was only there a month it's no biggie to me but my friend plans on staying there so he should definitely know about this

ontheway · Posted: Sat Feb 07, 2009 10:39 am Post subject:

asams · Joined: 17 Nov 2008

we both got ours. supposedly the owner was going to pay the total amount then just get the money back for himself at the end. i thought this sounded shady, my coworker didn't. that school has plenty other problems

i'm gonna get on the phone with him asap and try to get him out of there

cruisemonkey · Posted: Sat Feb 07, 2009 11:06 am Post subject:

Bottom line (if you are from a country that makes you elligible for lump sum benefits) is your employer just ripped you off for 4.5% of your salary. You do the math.

asams · Joined: 17 Nov 2008

idk, is America one of those countries?

ontheway · Posted: Sat Feb 07, 2009 11:38 am Post subject:

asams · Joined: 17 Nov 2008

you say taxes are only supposed to be 2%? I thought they were 3.3%

ontheway · Posted: Wed Feb 11, 2009 6:47 am Post subject:

asams · Joined: 17 Nov 2008

thank you ontheway

you are a scholar and a gentleman. I know where to run to for help.

kaosjin · Joined: 06 Sep 2007

It is nice to see some good people on this site giving sound advice. Good job ontheway.