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Allthechildrenareinsane
Joined: 23 Jun 2011
Location: Lost in a Roman wilderness of pain
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 Posted: Mon Jun 27, 2011 3:04 am Post subject: Hagwons and Pension. . . |
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Are hagwons required by law to pay into and make deductions from an NET's salary for the National Pension Scheme? I've been doing some searching around online, but can't seem to find a definitive yes or no answer.
My current hagwon has, apparently, NOT been paying into or deducting for the NPS for almost the past year (my contract's up 7/31). This is my first contract, so I foolishly signed w/out having anyone review it first or being better informed myself about Korean law.
Anyway, my boss said that he's not required to pay into or deduct for the NPS b/c I'm classified as an "independent contractor." Is this legal? From some of the posts I've read here on Dave's, I'm pretty sure it's not, but I can't seem to find any English language sources regarding the legality of this.
The NPS website says:
(1) General coverage criteria
General coverage criteria for the National Pension are age and residence. Income is not included in general coverage criteria. Accordingly, all residents in Korea from 18 to less than 60 years of age, regardless of their income, are covered under the Scheme. Of course, foreigners from 18 to less than 60 years of age residing in Korea are covered under the Scheme except special cases (Refer to �Foreigners and Lump-sum Refund�).
(2) Who are excluded from the coverage of the Scheme?
Those falling under any of the following items are excluded from the coverage of the scheme even if they satisfy the general coverage criteria.
- The government employees, military personnel, private school teachers, and employees of specially
designated post office, because they are covered under their own pension plans.
(Source: http://english.nps.or.kr/jsppage/english/scheme/scheme_01.jsp)
The wording of that bolded portion beginning "because" in that last sub-clause strikes me as a little ambiguous. It seems to mean that ALL of the former types of workers are excluded from the NPS ONLY IF they are covered by their own pensions plans -- am I reading that right?
Anyone else who happens to be better informed on these matters is welcome to chime in and set the record straight. Since I think my boss is cheating me out of my pension, I'd appreciate any additional info on this. |
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ED209
Joined: 17 Oct 2006
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| Posted: Mon Jun 27, 2011 3:20 am Post subject: |
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You cannot be an independent contractor and be on an E2. You are tied to your employer for your visa, so cannot be considered independent.
You can call the NPS to confirm this. They can also put a lot of pressure on your boss to pay(from the beginning of your contract). He is breaking the law. Whether you call them or not depends on the outcome you want. If you are Canadian or from the States, then you are owed a hefty refund. You will drop you boss in IT, but it's your money at the end of the day. Tell your boss you've think he's made a mistake and will call the NPS for confirmation. Take a picture of his reaction, and post a link here.
Pension and Health Insurance are tied to one another. Which means you are walking around uninsured. If you think this isn't a problem give Bill Kapoun's family a call.
Look out for employer's who under report how much you earn in order to pay lower rates of pension. Check with the NPS to find out how much you actually should be paying.
Don't just take the word of your employer. Expect stalling tactics, such as him agreeing now to shut you up, then doing nothing about it. |
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Allthechildrenareinsane
Joined: 23 Jun 2011
Location: Lost in a Roman wilderness of pain
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| Posted: Mon Jun 27, 2011 4:37 am Post subject: |
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| ED209 wrote: |
You cannot be an independent contractor and be on an E2. You are tied to your employer for your visa, so cannot be considered independent.
You can call the NPS to confirm this. They can also put a lot of pressure on your boss to pay(from the beginning of your contract). He is breaking the law. Whether you call them or not depends on the outcome you want. If you are Canadian or from the States, then you are owed a hefty refund. You will drop you boss in IT, but it's your money at the end of the day. Tell your boss you've think he's made a mistake and will call the NPS for confirmation. Take a picture of his reaction, and post a link here.
Pension and Health Insurance are tied to one another. Which means you are walking around uninsured. If you think this isn't a problem give Bill Kapoun's family a call.
Look out for employer's who under report how much you earn in order to pay lower rates of pension. Check with the NPS to find out how much you actually should be paying.
Don't just take the word of your employer. Expect stalling tactics, such as him agreeing now to shut you up, then doing nothing about it. |
I've been walking around uninsured for a whole year, then. My boss said he would sign me up for health insurance and that he would pay half of the cost. When I asked him about why I'd never received an insurance card or any further info about it, he said he never signed me up b/c he was waiting for me to tell him what I wanted (I had already told him I wanted the national health insurance plan at the beginning of my contract). "Stalling tactics" indeed.
What should I do about this? Can I just call the NPS and file a complaint against my employer? |
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Allthechildrenareinsane
Joined: 23 Jun 2011
Location: Lost in a Roman wilderness of pain
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| Posted: Mon Jun 27, 2011 6:01 am Post subject: |
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| ED209 wrote: |
You cannot be an independent contractor and be on an E2. You are tied to your employer for your visa, so cannot be considered independent.
You can call the NPS to confirm this. They can also put a lot of pressure on your boss to pay(from the beginning of your contract). He is breaking the law. Whether you call them or not depends on the outcome you want. If you are Canadian or from the States, then you are owed a hefty refund. You will drop you boss in IT, but it's your money at the end of the day. Tell your boss you've think he's made a mistake and will call the NPS for confirmation. Take a picture of his reaction, and post a link here.
Pension and Health Insurance are tied to one another. Which means you are walking around uninsured. If you think this isn't a problem give Bill Kapoun's family a call.
Look out for employer's who under report how much you earn in order to pay lower rates of pension. Check with the NPS to find out how much you actually should be paying.
Don't just take the word of your employer. Expect stalling tactics, such as him agreeing now to shut you up, then doing nothing about it. |
Thanks for all the info, ED209 -- I'm going to call the pension office tomorrow. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Mon Jun 27, 2011 6:51 am Post subject: |
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It is perfectly legal and proper to be an E2 teacher and an independent contractor. The government agencies know that hundreds of teachers are enrolled this way and they do not object. If they did the practice would have ended long ago.
It is legal because each agency is under its own rules, so that it is possible to be an independent contractor for taxes, pension and health insurance and an employee for immigration purposes at the same time. Government rules are not logical, but they are the law, and there are innumerable contradictory laws which apply simultaneously in the world.
To be legal, your contract must not state that you are an employee. If it states that you are an independent contractor, then it is clear. If it uses some other language, it could be contested depending on what it says.
In your case, Allthechildrenareinsane, you need to look at your contract. If it states in any way that you are an employee, then you are, and you should be covered by insurance and pension. If it somehow states or implies that you are an independent contractor then you are.
If your contract provides for insurance, then your employer should provide it. As an independent contractor, your employer cannot sign you up for the national health insurance. He could, however, provide private insurance.
However, if you are an independent contractor, you must legally register yourself for national pension and national health insurance. You can insist that your employer pay his share of your enrollment in the health insurance if it's in your contract.
There is currently a case against CDI that may change the current rules. Although that case was reported to have begun, there have been no updates. It could drag on for years. It is possible that it will: support, clarify but not modify, modify, make less clear, or strike down the practice of E2 visa holders being independent contractors. It is also possible that the case will have a ruling that only applies to CDI or that the case will be settled, dropped or thrown out, or that there is a ruling with no results pertinent to the issue.
It is this requirement that independent contractors enroll themselves in the pension and health ins that makes it quite possible that the court will have to let stand the current arrangements. Since ICs are supposed to enroll themselves, there is no need to force the companies, businesses or schools they may contract with to enroll them. While some ICs may have only one contract with one client, other ICs have multiple contracts and work in multiple locations. This would create burdensome multiple charges, or impossible and unfair allocations among the contracts. Since a large percentage of the Korean working population is working under IC arrangements, the court will not make a decision solely based on the tiny group of E2 visa IC workers if it would adversely affect the entire population. |
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Allthechildrenareinsane
Joined: 23 Jun 2011
Location: Lost in a Roman wilderness of pain
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| Posted: Mon Jun 27, 2011 7:46 am Post subject: |
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| ontheway wrote: |
It is perfectly legal and proper to be an E2 teacher and an independent contractor. The government agencies know that hundreds of teachers are enrolled this way and they do not object. If they did the practice would have ended long ago.
It is legal because each agency is under its own rules, so that it is possible to be an independent contractor for taxes, pension and health insurance and an employee for immigration purposes at the same time. Government rules are not logical, but they are the law, and there are innumerable contradictory laws which apply simultaneously in the world.
To be legal, your contract must not state that you are an employee. If it states that you are an independent contractor, then it is clear. If it uses some other language, it could be contested depending on what it says.
In your case, Allthechildrenareinsane, you need to look at your contract. If it states in any way that you are an employee, then you are, and you should be covered by insurance and pension. If it somehow states or implies that you are an independent contractor then you are.
If your contract provides for insurance, then your employer should provide it. As an independent contractor, your employer cannot sign you up for the national health insurance. He could, however, provide private insurance.
However, if you are an independent contractor, you must legally register yourself for national pension and national health insurance. You can insist that your employer pay his share of your enrollment in the health insurance if it's in your contract.
There is currently a case against CDI that may change the current rules. Although that case was reported to have begun, there have been no updates. It could drag on for years. It is possible that it will: support, clarify but not modify, modify, make less clear, or strike down the practice of E2 visa holders being independent contractors. It is also possible that the case will have a ruling that only applies to CDI or that the case will be settled, dropped or thrown out, or that there is a ruling with no results pertinent to the issue.
It is this requirement that independent contractors enroll themselves in the pension and health ins that makes it quite possible that the court will have to let stand the current arrangements. Since ICs are supposed to enroll themselves, there is no need to force the companies, businesses or schools they may contract with to enroll them. While some ICs may have only one contract with one client, other ICs have multiple contracts and work in multiple locations. This would create burdensome multiple charges, or impossible and unfair allocations among the contracts. Since a large percentage of the Korean working population is working under IC arrangements, the court will not make a decision solely based on the tiny group of E2 visa IC workers if it would adversely affect the entire population. |
Thanks for the additional info, ontheway. I just took a look at my contract, and it states that I am, in fact, an employee, not an independent contractor. It also states that, as an employee, I'm entitled to medical insurance -- and therefore pension, as well. I think I'm going to make a trip down to the local pension office this week.
Anyone have a ballpark estimate of how much I might be entitled to? I've been working at the school nearly a year, and my starting salary was 2.1 million. It got bumped up, though, to 2.2 million halfway through my contract b/c my boss increased my teaching hours. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Mon Jun 27, 2011 8:04 am Post subject: |
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| Quote: |
I just took a look at my contract, and it states that I am, in fact, an employee, not an independent contractor. It also states that, as an employee, I'm entitled to medical insurance -- and therefore pension, as well. I think I'm going to make a trip down to the local pension office this week.
Anyone have a ballpark estimate of how much I might be entitled to? I've been working at the school nearly a year, and my starting salary was 2.1 million. It got bumped up, though, to 2.2 million halfway through my contract b/c my boss increased my teaching hours. |
So, you are an employee. There is no issue about that.
You can go to the pension office and the health ins. office and report your lack of coverage. You should take your contract, pay statements, bank book (if you're paid by money transfers), ARC and passport. You could be asked to pay your share of both the pension and health ins back to the beginning of your contract, so you'll need the ability to do that.
It might be best if your employer doesn't know you're doing this. Once your employer finds out you turned him in, your work situation could become quite nasty. Maybe the pension office can contact your boss without letting him know that you reported him.
As to the amount, pension is 4.5% paid by you and 4.5% paid by your school (based on brackets, so it could be a bit higher or lower). Your first month, especially if it was a partial month could be exempt. |
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Allthechildrenareinsane
Joined: 23 Jun 2011
Location: Lost in a Roman wilderness of pain
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| Posted: Mon Jun 27, 2011 8:24 am Post subject: |
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| ontheway wrote: |
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I just took a look at my contract, and it states that I am, in fact, an employee, not an independent contractor. It also states that, as an employee, I'm entitled to medical insurance -- and therefore pension, as well. I think I'm going to make a trip down to the local pension office this week.
Anyone have a ballpark estimate of how much I might be entitled to? I've been working at the school nearly a year, and my starting salary was 2.1 million. It got bumped up, though, to 2.2 million halfway through my contract b/c my boss increased my teaching hours. |
So, you are an employee. There is no issue about that.
You can go to the pension office and the health ins. office and report your lack of coverage. You should take your contract, pay statements, bank book (if you're paid by money transfers), ARC and passport. You could be asked to pay your share of both the pension and health ins back to the beginning of your contract, so you'll need the ability to do that.
It might be best if your employer doesn't know you're doing this. Once your employer finds out you turned him in, your work situation could become quite nasty. Maybe the pension office can contact your boss without letting him know that you reported him.
As to the amount, pension is 4.5% paid by you and 4.5% paid by your school (based on brackets, so it could be a bit higher or lower). Your first month, especially if it was a partial month could be exempt. |
4.5% of my total yearly salary? That's a lotta scadole. No wonder he didn't want to pay it.
Thanks again.  |
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ibeattheborg
Joined: 17 Dec 2010
Location: the deep blue sea
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| Posted: Mon Jun 27, 2011 11:11 am Post subject: |
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| So if the OP goes to the Pension/Insurance office, he might need to have 2 million in spare cash so that he can pay the 12 months of Pension and National Isurance that were not paid from the start ? |
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Allthechildrenareinsane
Joined: 23 Jun 2011
Location: Lost in a Roman wilderness of pain
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| Posted: Mon Jun 27, 2011 9:42 pm Post subject: |
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| ibeattheborg wrote: |
| So if the OP goes to the Pension/Insurance office, he might need to have 2 million in spare cash so that he can pay the 12 months of Pension and National Isurance that were not paid from the start ? |
It doesn't sound fair, does it? Still, though, for me it's the principle of the thing. I might just give the Pension Office a call instead to see what they say before I go all the way down there. |
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