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big_fella1
Joined: 08 Dec 2005
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 Posted: Sun Jul 04, 2010 3:55 pm Post subject: Independent Contractors |
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Did you know that if you have to attend a regular place of work at a set time for a fixed period and are paid per hour you are not an independent contractor. You may be entitled to health insurance, pension and other insurances dependent on your visa status and the number of hours you work.
I have checked with the Labour board and even if you sign a contract that states you are an independent contractor, they will look at your actual employment situation in determining whether or not you are an employee.
Just a friendly public service announcement. |
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CentralCali
Joined: 17 May 2007
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| Posted: Sun Jul 04, 2010 3:58 pm Post subject: |
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I posted a while back a link to the court decision regarding that issue. It's been a couple of years now. Even if the contract specifically says independent contractor, the court said that doesn't matter. What matters is the facts of the employer-employee relationship, regardless if the pay is monthly or hourly.
Furthermore, an E-2 visa holder must have someone act as his employer sponsor, the E-2 visa holder cannot be an independent contractor.
Last edited by CentralCali on Sun Jul 04, 2010 9:56 pm; edited 1 time in total |
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big_fella1
Joined: 08 Dec 2005
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| Posted: Sun Jul 04, 2010 4:05 pm Post subject: |
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| CentralCali wrote: |
I posted a while back a link to the court decision regarding that issue. It's been a couple of years now. Even if the contract specifically says independent contractor, the court said that doesn't matter. What matters is the facts of the employer-employee relationship, regardless if the pay is monthly or hourly.
Furthermore, an E-2 visa holder must have someone act as his employer sponsor, the E-2 visa holder [i]cannot[/b] be an independent contractor. |
Sorry that I missed it, recently I have been receiving contracts stating independent contractor, so I checked and shared. |
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CentralCali
Joined: 17 May 2007
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| Posted: Sun Jul 04, 2010 4:47 pm Post subject: |
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| If the contract says "independent contractor," I'd give it a pass. The boss isn't pulling that idea out of thin air, so there's no doubt he'll try some other shady stuff. |
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bobbybigfoot
Joined: 05 May 2007
Location: Seoul
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| Posted: Sun Jul 04, 2010 4:47 pm Post subject: |
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Tell that to the employers who refuse to follow the law. In my case, the tax rate was wrong, plus we were being forced to file our own income tax.
I went through this with my employer. I tried getting help but instead got the runaround from three different organizations -- each passed the buck. The labour board told me to contact the tax department. It's a tax issue, they said. The tax department told me to contact Immigration. It's a Visa issue. Immigration told me to contact the Labour Board. It's a labour issue.
In the end, I gave up after the school finally lowered it's tax rate (still the wrong rate but not nearly as bad) and now we all use some accountant who fabricates our tax returns and gets us all our tax money back. So in the end, we pay no tax.
Quite the system in Korea. |
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OculisOrbis
Joined: 17 Jul 2006
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| Posted: Sun Jul 04, 2010 9:35 pm Post subject: |
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| CentralCali wrote: |
I posted a while back a link to the court decision regarding that issue. It's been a couple of years now. Even if the contract specifically says independent contractor, the court said that doesn't matter. What matters is the facts of the employer-employee relationship, regardless if the pay is monthly or hourly.
Furthermore, an E-2 visa holder must have someone act as his employer sponsor, the E-2 visa holder [i]cannot[/b] be an independent contractor. |
Any chance you could find that link again? 'Ontheway' could use some direct evidence to convince him. Apparently, he think this is just a myth that dave's posters have been spreading for the last few years.
| ontheway wrote: |
| OculisOrbis wrote: |
If youre referring to 'independent contractor' E-2's, it is impossible for an E-2 to be independent - to get the visa they must be sponsored (an employee of a single employer) so they inherently cant be considered 'independent'.....but no one enforces this so they get away with it. |
The above is a Dave's legend that happens to be NOT true.
It is perfectly legal and proper to be an Independent Contractor or part time employee and therefore exempt from pension and health insurance while still qualifying for an E2 visa.
These are all separate laws with their own rules. Some Dave's posters have been making the claim that E2s cannot be independent contractors for years. - And yet there are hundreds of them, all over Korea, it's no secret, every department of the government knows and they all say it's legal.
Who says it's illegal? A few posters on Dave's who heard it from other posters on Dave's - but NO ONE has ever shown any statute or rule that says such a combination is not allowed.
E2 - independent contractor is legal.
E2 - part time worker, exempt from health ins and pension, also legal.
If you are classified as one of the above, it is legal as long as it is properly spelled out in your contract.
However, if you sign a contract that says you are a full time employee, then you are. No way around it. |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Sun Jul 04, 2010 10:00 pm Post subject: |
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| bobbybigfoot wrote: |
Tell that to the employers who refuse to follow the law. In my case, the tax rate was wrong, plus we were being forced to file our own income tax.
I went through this with my employer. I tried getting help but instead got the runaround from three different organizations -- each passed the buck. The labour board told me to contact the tax department. It's a tax issue, they said. The tax department told me to contact Immigration. It's a Visa issue. Immigration told me to contact the Labour Board. It's a labour issue.
In the end, I gave up after the school finally lowered it's tax rate (still the wrong rate but not nearly as bad) and now we all use some accountant who fabricates our tax returns and gets us all our tax money back. So in the end, we pay no tax.
Quite the system in Korea. |
The labor board and Immigration say that you can't be an independent contractor. HOWEVER the tax office does allow you to be one for tax purposes. As you found out it's not harmonized between the three departments.
And @ CC:
And as far as court goes...most E-2'ers aren't going to bother/have the resources to battle it out.
And the court more than likely will just give the WJN a slap on the wrist and tell him "naughty, naughty, don't do it again."
Until actual enforcement of the laws governing foreign workers takes place (and not just once in a while as in the case of that Indian professor) it's more or less an exercise in futility...exceptions notwithstanding.
Last edited by TheUrbanMyth on Sun Jul 04, 2010 10:02 pm; edited 1 time in total |
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CentralCali
Joined: 17 May 2007
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| Posted: Sun Jul 04, 2010 10:00 pm Post subject: |
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| OculisOrbis wrote: |
| Any chance you could find that link again? 'Ontheway' could use some direct evidence to convince him. Apparently, he think this is just a myth that dave's posters have been spreading for the last few years. |
No problem. Note that the court says the stunt is not valid. It doesn't matter what "every department of the government" says.
| Quote: |
And @ CC:
And as far as court goes...most E-2'ers aren't going to bother/have the resources to battle it out. |
Yep. I've been saying that for years.
| Quote: |
| And the court more than likely will just give the WJN a slap on the wrist and tell him "naughty, naughty, don't do it again." |
No kidding. But the key here is that the WJ (I refuse to use an honorific for dishonorable persons) will be informed that the stunt's not valid. Of course, that's if it ever gets to that point.
| Quote: |
| Until actual enforcement of the laws governing foreign workers takes place (and not just once in a while as in the case of that Indian professor) it's more or less an exercise in futility...exceptions notwithstanding. |
That's not going to happen until Korean society gets around to demanding actual enforcment of laws in general. If they truly wanted to be a "first world country," they'd start behaving that way. Law enforcement--and acceptance of its current state--here is no better than in any banana republic of a hundred years ago.
The funny part about both the tax, pension, and health bit and the "independent contractor bit" is that it's so easy to prevent the fraud on the part of the WJs. Simply require one copy of the contract be provided to Immigration and then have Immigration, Pension, Tax, and National Health Insurance all share a database for the foreign workers. Underpaying into any of those really does negatively affect all the workers here, including Koreans. Of course, Immigration is the one that needs to enforce the "independent contractor" laws by simply not approving contracts with that term for E-2 holders.
One day, the Korean government will realize all of this; however, I'm not holding my breath. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Jul 06, 2010 7:20 am Post subject: |
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| CentralCali wrote: |
| OculisOrbis wrote: |
| Any chance you could find that link again? 'Ontheway' could use some direct evidence to convince him. Apparently, he think this is just a myth that dave's posters have been spreading for the last few years. |
No problem. Note that the court says the stunt is not valid. It doesn't matter what "every department of the government" says.
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Well, now I see where your confusion comes from.
The case cited at the link above has absolutely nothing at all to do with independent contractors. It was not about independent contractors and there were none involved in the case.
In the case cited a group of workers that were employees of an outsourcing subsidiary of the government owned Korea Railroad corporation (Korail). Korail created the subsidiary and hired contract workers as employees of this subsidiary. These workers were never considered independent contractors. The case had nothing to do with that issue.
Korail then hired the workers on contract from the subsidiary. They likened this as being the same as hiring temporary workers on a long term basis from a temp agency such as Manpower. This allowed Korail to avoid treating the workers as their own direct employees.
The issue revolves about the issue of part time and temporary workers hired from an independent temporary agency. The workers are hired and placed by the agency at jobs ranging from a few hours to days, weeks, months and even years. However, the workers always remain employees of the agency. They work for a client of the agency. The client then escapes the obligation of providing salary or benefits that they would have to pay to their own direct hires. They can terminate the contract with the agency at will with no obligation to the worker. The worker's salary, benefits and employment rights come from the agency for which he actually works.
There are great advantages to a business when hiring "temps." The business can avoid long term commitments to workers it needs for a short time. The business can try out workers before making permanent hires. The business can save on long-term benefit costs.
Korail had created it's own in house "employment agency" in an attempt to hire the same kind or workers. The workers would work only for the "agency." For Korail, however, this was a sham business. Their in-house outsourcing subsidiary (according to the info in the article) did not place workers with any other clients.
The court ruled that the agency was a sham and that Korail was actually the employer. This means that the workers of the "outsourcing agency" were entitled to be treated just as any other workers in the same position at Korail.
Since there were no "independent contractors" in this case, this case has no relevance to the issue of independent contractors.
It is, as I said, legal to be an employee for Immigration purposes and an independent contractor for tax, pension, and/or health insurance purposes.
This is the same in the US.
It is quite possible to be an employee for some legal purposes and not for others. I actually have many years of experience in public accounting dealing with exactly this issue - independent contractors - and who is and isn't one. The IRS rules are even more convoluted and unfair than those we've discussed here at Dave's.
*****
Now, as to what use the court ruling cited above could have to teachers in Korea:
The Korail case could be quite germain to the situation of teachers who have been hired by a sham "after school program" with a contract actually signed by a public school. Is the agency or the public school the actual employer? Do both, in fact, have legal obligations to the teacher?
Of course, since the "agencies" who outsource teachers to after school programs do place teachers at more than one school, this case does not fit the facts exactly. But, if all the clients are public schools, it could be argued that they consitute a single employer in the sense that they are all part of the government.
Last edited by ontheway on Tue Jul 06, 2010 8:06 am; edited 1 time in total |
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OculisOrbis
Joined: 17 Jul 2006
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| Posted: Tue Jul 06, 2010 7:29 am Post subject: |
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| I really dont want to argue about this issue anymore, i just want to know the name of the business you own that is the reason you always belittle and discourage workers from going after benefits that should be paid by their employers. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Jul 06, 2010 8:12 am Post subject: |
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| OculisOrbis wrote: |
| I really dont want to argue about this issue anymore, i just want to know the name of the business you own that is the reason you always belittle and discourage workers from going after benefits that should be paid by their employers. |
Don't be silly. I don't own any business in Korea. I'm just interested in accuracy and preventing teachers from going in and ranting about nonsense, making fools of themselves and losing good jobs.
Teachers who have been fed and rely upon false information they get from other teachers in private and here on Dave's frequently go in to their schools, scream and shout about things being "illegal" when in fact there is nothing illegal and the teacher is completely wrong, make their bosses mad, and end up losing out, when a little good information could have saved them a lot of pain and money. In many cases teachers have lost out on good jobs and good opportunities based on this faulty information. |
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Young FRANKenstein
Joined: 02 Oct 2006
Location: Castle Frankenstein (that's FRONKensteen)
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| Posted: Tue Jul 06, 2010 10:29 am Post subject: |
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| CentralCali wrote: |
| But the key here is that the WJ (I refuse to use an honorific for dishonorable persons) |
It's okay to use the honourific -nim as long as it is then followed by the insult suffix -rod. |
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big_fella1
Joined: 08 Dec 2005
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| Posted: Tue Jul 06, 2010 1:10 pm Post subject: |
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| ontheway wrote: |
| It is, as I said, legal to be an employee for Immigration purposes and an independent contractor for tax, pension, and/or health insurance purposes. |
Actually as the OP on this thread I stated that I had spoken to the Labour Board.
If you attend one workplace, for a number of hours on a daily basis, if you report to a boss, and if the real nature of your relationship is employer employee, then signing a contract as an independent contractor does not affect your rights as an employee.
Because of the nature of an E2 visa being tied to a building and location and being sponsored by the 'employer', I don't see how you could legally argue that there is anything other than an employer, employee relationship.
In the Hagwon context I believe that A large Adult Chain had to make significant changes to the way they remunerated independent contractor Korean teachers to break the employee, employer relationship.
Korea has some of the toughest Industrial Relations rules on employers in the world. It is really good to be an employee here. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Wed Jul 07, 2010 9:00 am Post subject: |
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| big_fella1 wrote: |
| ontheway wrote: |
| It is, as I said, legal to be an employee for Immigration purposes and an independent contractor for tax, pension, and/or health insurance purposes. |
Actually as the OP on this thread I stated that I had spoken to the Labour Board.
If you attend one workplace, for a number of hours on a daily basis, if you report to a boss, and if the real nature of your relationship is employer employee, then signing a contract as an independent contractor does not affect your rights as an employee.
Because of the nature of an E2 visa being tied to a building and location and being sponsored by the 'employer', I don't see how you could legally argue that there is anything other than an employer, employee relationship.
In the Hagwon context I believe that A large Adult Chain had to make significant changes to the way they remunerated independent contractor Korean teachers to break the employee, employer relationship.
Korea has some of the toughest Industrial Relations rules on employers in the world. It is really good to be an employee here. |
What you have to remember is that each regulatory department and each agency has its own mandate and makes its own rules, but they connot tell the other departments what to do. This is true in the US as well.
So, Immigration has rules to get an E2 visa which you can meet while still being an Independent contractor in the eyes of the Tax, Pension and Health Insurance offices. Labor will side with you that you are an employee, so they will attempt to enforce your contract, but the Labor office cannot tell the others what to do.
Sure, it doesn't sound right, it isn't logical, it isn't fair ...
Now, these things can change, and they do, again and again and again. They may change a bit to be more fair and logical, and then change again to be worse. It's the nature of stupid socialist government.
That's why it's best to make sure that everything is spelled out in your contract in advance. Never rely on the government to get things you thought you should have gotten because of some stupid laws. Get it in your contract in advance. Then you have a contractual obligation on the part of your employer, and the various government offices can back you up easier too. |
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