Korean Job Discussion Forums

[acockburn]

I've been working for a hagwon for 7 months. My director has deducted roughly 76,000 won from my monthly salary of 2.1 million for "income taxes". I always assumed that this was the money going toward the national pension plan and was counting on getting this money back at the end of my contract as I am a US citizen. Is this just my director being shady, or is every foreign teacher required to pay income taxes in addition to health insurance and pension plan payments?

[Skippy]

So you guessed and assumed. Now you check on things and are surprised you might be being cheated. First, I do not think you get the money back for taxes, because I think that is with US Expats and Public Schools. Second, you should have checked with pension that you where registered, months ago.

This is not shady, for money to be collected for taxes. All teachers should be paying taxes. We are lucky as the rate is LOW. You might be being scammed if your tax rate is 3.3 percent, it should be lower. Or being scammed if the school collects and does not pay to the tax office.

Here is a hint. Do some more research. Look for some of the threads and stickies concerning taxes, and try a google search for the Korea Pension, and call the the office.

[Whistleblower]

A visit to the local tax and pension office should do wonders. It will get the ball rolling. If you are one of those citizens other than the UK, you get your pension money reimbursed when you leave Korea. In essence you are getting fleeced twice. Sort it out sooner rather than later. It is also essential that you get your health insurance sorted out or you could be facing huge medical bills.

[ttompatz]

Yes, you pay taxes. The tax exemption is ONLY for teachers at Public schools or universities. Hagwan workers do NOT get the tax break.

That said, on a salary of 2.1 million with no dependents a deduction of 76k won is too high (more than double what it should be (w28,400)).

I suspect you were (illegally) registered as a sub-contractor so your boss could fly under the radar in regards to pension and NHIC. Pretty common occurrence in S.Korea and causing you to get taxed at the higher rate (3.3%).

http://www.nts.go.kr/eng/help/help_56.asp?top_code=H001&sub_code=HS05&ssub_code=HSE4

It sucks to be you since it is a no-win fight (if you start you lose even if you win).

.

[ontheway]

[Troglodyte]

Even if your contract states that you're an independent contractor, you can fight it. Other people are. The courts have not yet stated definitively whether or not foreign workers can be independent contractors.

Still, it's very likely that your employer is doing something shady.

[Skippy]

[ontheway]

[acockburn]

Thank you for your insight, everyone. My contract does not explicitly say I am an independent contractor, only an "English teacher (or instructor)". In the salary section of my contract, it does state that, "a tax of about 3.5% will be paid to the Korean government". There is nothing in my contract about paying pension, but it does say that my school agrees to pay 50% of the medical insurance, while my insurance premium of 50% will be deducted from my monthly salary.

I talked to the director of my school yesterday about my situation and she said the owner of the school still hasn't signed me up for the tax program, so the owner has been deducting 76,000 won from each paycheck and keeping it. She also said that she never enrolled me in the pension plan or health insurance program because I never asked her to.

I messed up. I needed a job and was anxious about getting one quickly when I accepted this offer, so I didn't take the time to post my contract on here for review. I also didn't ensure that I was enrolled in the pension and health insurance programs when I first started. Is there anything I can do to fix this now, or should I cut my losses and just fix the tax issue and leave the lack of pension and health insurance as it is?

[acockburn]

I'll post my contract here in the next couple of hours.

[Skippy]

So the owner admits she is stealing. Wow, worse off she is stealing for the government. Even at 3.5 percent that is too high. Plus not signing up for the health insurance and pension because you did not ask, cop out. Well then ask now. Tell your boss YOU will get the ball rolling with getting yourself registered. Believe me that will get some flustered response. When the government wants it due, it will get it.

Be aware that you will likely have to back pay those 7 months, as will your boss.

[acockburn]

Alright, here is my contract. It seems to me like he illegally registered me as a contractor. Does anyone know what I have to do to register as an employee? Do I take it up with the Labor Office? Thank you for all of your help so far!



This document is a contractual agreement between the Director, [my hagwon] in [city] hereafter referred to as � Party A � and the instructor [me], hereafter referred to as � Party B�.

Position: English Teacher (or Instructor)


1. Contract period
1) The period of this contract will be starting from___ and will be terminated on end of ___ .
2) Party B must inform party A of whether to renew the contract or not two months prior to the end of the contract, and the contract may be renewed at that time by mutual agreement.

2. Salary
1) Party A will pay a monthly salary of 2.1 million won (Korean currency) to Party B.
2) A tax of about 3.5% will be paid to the Korean Government.
3) Over time rate for each hour will be 17,000won.(It will be subject to Korean taxes; approximately 6%)
4) On completion of 1 year contract, Party B will receive the amount of one month salary as a severance pay.
5) Party B may be required to deposit the money(500,000won) off the employee first monthly salary payment. (The employee can get back the money at the last day of the contract.); Party A can cover any damage to the apartment or unpaid bills left by Party B when the apartment is vacated.

3. Working Hours
1) Party B will work from Monday to Friday (N.B. : class preparation time is not included) and Party B is required to perform the work assigned to him/her by Director for 30 teaching hours a week. (Mon.~ Fri.)
2) Classes and teaching will be scheduled in accordance with the needs of Party A.



4. Accommodation
1) Party A will provide an apartment or flat (a person has single room) and a bed, gas stove, telephone. (but the fee for installing the phone will be charged to Party B).
2) Party B�s accommodation is one of the followings; studio apartment or shared 2 bedroom apartment.
3) The tenant, including party B, will be responsible for maintenance expenses as well as paying utilities, such as for the gas, electricity, telephone bills, etc.
4) Upon first arrival in Korea, it may be necessary for the teacher to stay in a motel temporarily before his/her permanent apartment is available.

5. Air Fare (for 1 year contract)
1) Party A agrees to pay Party B for a one-way ticket from his/her country to South Korea.
2) At the end of the contract Party A agrees to buy a return one-way ticket for Party B from South Korea to his/her country. (Only When Party B returns to his/her country.)
3) If Party B has to leave before 6 months, Party B will reimburse the full cost of the Air-Ticket to Party A. Party B reimburse half of the cost of plane ticket to Party A, if Party B terminates his/her contract or (Party A terminates the contract; in the case of that Party B has three warning letters in the period of one year because Party B doesn�t follow Party B�s obligation) after 6 months but within 12 months of commencing date of his/ her contract.

6. Holidays
1) During the school year, there are many national and school holidays. There are also 10days holidays in the summer and winter. (It depends on the school schedule)

7. Medical Insurance
1) Party A agrees to pay 50% of the medical insurance. Party B�s insurance premium of 50% will be deducted from his/her monthly salary.
2) Dental and pre-existing conditions(diseases) are not covered in this insurance.

8. Party A�s Obligations
1) Party A will introduce to Party B, the Party A�s school policies and regulations concerning work conditions.
2) Party A will provide Party B necessary working and living conditions.
3) Party A will provide all curriculum, textbooks and other teaching materials.
4) Party A will help Party B as best as possible with any problems, including personal difficulties living in Korea.
5) Party A will provide an orientation; observation classes, teaching methods , techniques and activities etc.

9. Party B�s Obligations
1) Party A shall arrive at school at least 40min. earlier before class; to prepare for his /her classes on his/her own time. Class preparation should include researching and producing teaching materials on time submission of lesson plans, tracking reports, progress reports and semi-annual teaching method reports.
Failure to submit these items on 3 occasions will be subject to a 30 percent deduction from Party B�s severance pay. Three late submissions of any of these items will count as 1 non-submission.
2) Party B shall observe Party A�s school policies and regulations concerning teachers and shall accept Party A�s arrangement, direction, supervision and evaluation in regard to his/her work.
3) Party B is not allowed to work for any other organization including private tutoring without party A�s prior consent.
4) Korean law stipulates that no full-time instructor may work at two or more institutions at the same time. Failure to observe this regulation will result in immediate dismissal.
5) Without Party A�s consent, Party B shall not render service elsewhere or hold concurrently any post unrelated to the work agreed on with Party A.
6) Party B is responsible for the implementation of the school�s curriculum, grading and evaluation, and attending occasional teachers� meetings.
7) Party B must behave in a professional manner during class or when socializing with students after class.
Party B can be required to interview new students and evaluate their placement level.
9) Party B shall not be absent without Party A�s permission, with a 2 days in advance notice.
- (Also, Party B �s absent days rate of payment may be deducted.)
10) If Party B is more than 10 minutes late without notification, one hour rate of payment may be deducted and if one hour missed, one day deducted.
11) Party B shall respect the Korean people�s moral standards and customs.
(To perform his/her duties in a professional manner and refrain from conduct which could damage the reputation of the Institute, including, but not limited to: conducting class while smoking or under the influence of alcohol or illegal drugs: making sexual advances towards or entering into sexual relationship with students or employees of the ____; conducting any business or accepting any funds without the express written consent of the Institute; and borrowing or lending of funds or selling items to students.
Extremely short or revealing attire is prohibited. Party B is required to dress formally for special events such as Seminar for Parents Graduation or Entrance Ceremonies. Male Employees will wear a dress shirt, tie and slacks. Female Employees will wear a dress, a skirt or slacks and an appropriate top.
12) Party B shall not sexually harass the students in his/her care.
13) No form of physical punishment must be used by Party B.
14) Party B must follow Party A�s teaching methodology and be present with the students during the kindergarten hours (from 10am to 2:30pm) including lunch break.
15) Party A agrees to provide two sick-leave days to Party B each year. On the first two days on which a Party B misses work he or she will be paid in full for the day, with the following conditions. The Party B must notify his or her supervisor either the night before the absence, or as early as possible on the morning of the absence. Party B must also present a doctor�s note to his or her supervisor on the day on which he or she returns to work. Unused sick days may not be used as vacation days. Should the Party B be absent for five consecutive days without a valid reason, his or her contract may be terminated.
16) Party B, on occasion, requests an emergency leave in order to attend to urgent matters in their home country. Since there are no substitute teachers available, the extended absence of Party B creates a serious problem for the institute. Additionally, when requests for leaves coincide with holidays observed by Party A, such as Christmas, the potential for abuse, in order to extend existing vacation days, compounds the seriousness of the situation. Therefore, any Party B requesting a leave of absence during his or her contract will be subject to a 30% deduction from his/her severance pay as well as deduction from the day rate of payment. Should a leave request coincide with a holiday on which ____ does not hold classes, the percentage of this deduction will be raised to 50 percent.


10. Resignation
1) In case of Party B�s resignation, Party B must have a reasonable reason.
ex) Party B has a serious health problem or Party B�s Parents have a serious health problem or disaster. Not change mind. )
1) In case of Party B�s resignation, which must be notified at least two months in advance, the contract between Party A and Party B will become null and void. Accordingly Party B�s salary will be paid up to the date of party B�s resignation.
2) In case of party B�s resignation without notice before two months, Party A is not obligated to pay the salary for the month. And Party B will pay utilities for two months.
3) Party B has to reimburse the full cost of plane ticket and recruit fee to the Party A , if the party B terminates his/her contract within 6 months of commencing date of his/her contract.
4) Party B has to reimburse half of the cost of plane ticket and recruit fee to the Party A, if the Party B terminates his/her contract after 6 months but within 12months of commencing date of his/ her contract.

11. Revision, Cancellation and Termination of the Contract
1) Both parties should abide by the contract and must refrain from revising, canceling, or terminating the contract without mutual consent.
2) This contract may be renewed upon agreement between Party A and Party B three months prior to its expiration; otherwise, Party B will just finish out the completion of the original contract. The undersigned agrees to the terms stated above in this contract and for future reference, each party is to keep a copy of this contract.

[Troglodyte]

First of all, delete the name of the school and the employment dates. It's not good to identify the school while you still work there. (After you quit is fine.)

Now, on to business....

That is a horrible looking contract. Fortunately it does NOT say that you're in independent contractor. Your boss might have registered you as one but the contract doesn't explicitly say you are one, so that's in your favor. More importantly, the contract has several illegal clauses involving deductions. The employer is not allowed to deduct from your salary without permission of the court. Period. It doesn't matter that you agreed to it by signing because you are not permitted to sign away your rights. Similarly, the "end of year bonus" is not an end of year bonus. It's a severance bonus. It is based on 1/12 of your average salary for the last 3 months before quitting, multiplied by the number of months you worked at that place (minimum 12 months). Normally this means that you get the equivalent of 1 months extra pay, but not always. If you worked a lot of overtime in the last 3 months, then your "bonus" will be bigger. Anyway, your boss can't make deductions from it.

What you need to do now:
Do you have any pay slips? Something that says how much you earned that month and how much was deducted for various things? If not, then ask you boss for it. It sounds like your boss and the school owner are two different people. Ask your boss for a record of your salary and deductions. Say that you want it so that later there is no debating about whether or not your boss made deductions for various things. Say that this is particularly important because the employer is deducting taxes and medical but hasn't paid into them yet. The real reason you need this is so that you can show it to various government office. You can show the labor board that your boss is deducting taxes, medical and whatever else but is actually pocketing it. Otherwise you may have to back pay it yourself (thus paying twice). If you can't get some kind of pay slips then don't worry too much. You can show them your contract and your bank statement so that they can see the difference between them. This will show that either the boss is deducting for something legit but not paying it OR that he's making illegal deductions.

Once you've asked for pay slips and got them or at least the one from the last month's pay then you go to the pension office and the tax office to get a statement about what has or hasn't been paid into.

Make sure that your bank book is up-to-date and shows your salary deposits (I presume that your boss pays directly into your account).

Go to the labor board. Show them that your boss is making deductions for tax and health but hasn't actually signed you up for either. Show that your boss hasn't contributed to pension. Show them the illegal deduction clauses in your contract and say that you now know that they are illegal but that your boss is threatening to use them against you.

DO NOT discuss any of this with your boss. It is very important that you go to the labor board and report him BEFORE he fires you for some fictional reason. It's very likely that he'll try to fire you immediately after the pension, tax and labor guys call him up. This is why you have to try to go to all 3 offices in the same day. If you can't go to all of them in the same day, at least go to the labor board and file a complaint there. Then go to collect your info and return to the labor board with it. If/when your boss fires you, then you have a lot more to back you up when you claim that he is just making up a reason to fire you. (And if you've worked more than 6 months, he still needs to give you 30 days notice, regardless of what's in your contract.)

There are several benefits to reporting him. First of all, if he's done something illegal or if labor sides with you, then you'll likely get to transfer your visa to another school or change it to a D10. Simply quitting makes that highly unlikely. The other big reason is that it puts him on record so that it's harder for him to screw over another teacher later.


In the mean time, get a second set of documents ready in the off chance that labor isn't able (or willing) to help you. In that case, you can just leave and do a visa run to Japan. Come back as a tourist and get a new job. Since you're in country that would only take you a week or two to get a decent job offer and another week or two for a visa issuance number. (What you do during that time is your business. You'd be a tourist so technically you can't teach, but as I said, that's your business.)

If you do get a D10 or immi's permission to do a transfer without LOR (because essentially the labor board gives you the equivalent of a LOR) then you can probably find a new employer in a week or two. Visa transfer takes about a week (during which time you might be able to work anyway).

Just as a side note, you should be aware that your boss or employer will likely fire you when they find out that you reported them. From the contract you showed and your description of the school, it's a typical shady hogwon. How bad the firing will be may vary but it's very sure that you'll be fired for some reason or another. There will probably also be some yelling and threats and such. In a worst case scenario you'll be booted out of your apartment or you'll come home to find the lock changed and maybe your things out on the sidewalk. So prepare accordingly. Pack your stuff and ask a friend (who has no connection at all to the school) if he can hold onto some of your stuff for a week or two. Do this just before you report your boss. That way damage is minimal. Check with some friends to see if you can crash at someone's house if necessary or ask around about cheap youth hostels or goshiwons or yokwons in your area. Hope for the best but expect the worst.


Good luck.


Now delete the identifying info from that contract that you posted...



.

[ontheway]

That's a really bad contract. It makes no mention of you as an employee, but it also makes no mention of you as an Independent Contractor. The best contracts are clear and straightforward, then the parties can accept or reject the contract with full knowledge of what they are agreeing to. Your contract is at best unclear poorly written and unclear, although it really appears to be intended to deceive.

With this kind of contract, your boss could have legally reported you to the Tax office as an Independent Contractor. This doesn't mean you can't fight it, it just means that it wasn't illegal to report your status this way.

One important factor: Your contract mentions health insurance. Have you made any payments or have any deductions been taken to pay for health insurance? Do you have health insurance?

Before you prodeed, you have to decide: What is most important to you? How do you want this to come out? Are you willing to end this job early? Are you ready to make the effort to fight to collect?

If you have no health insurance, and if nothing has been withheld and if you want to continue for the year and gamble on staying health and getting your year end benefits, you could just keep going and fight at the end.

Or you could demand that 100% of your withheld taxes be returned to you and that no more deductions be made. You would be completely in the underground economy - and illegal. But you would come out about even in total pay. This could be a big problem in the future, however, if you stay in Korea and get a new legal job, since you could be charged retroactively for all unpaid health insurance and pension amounts, although such amounts could also be charged to your former boss.

If you have no health insurance, your boss is in breach of contract. So you could try going to the Health Insurance office, Pension office, and Labor office and report your situation. They might take up the battle.

The more you fight, the more likely you are to have a horrible working situation and eventually be fired. This does not mean that you should give in, rather it means that you should make your strategy according to the factors that are most important to you.

[Troglodyte]

Honestly, I don't see any reason at all to stay at this hogwon any longer than what it takes to plan your exit strategy. Get a new set of your documents ready (if you don't already have them). Once you have them, report the owner/school and if immi won't let you transfer then just leave. At the moment, you don't really have anything to lose from leaving. Sure you might be unemployed for a few weeks but you can consider it some free time and in the long run you'll probably end up making more money by getting a new job. (By the way, that salary is at the lower end of normal, even as a starter salary.)

Just as a side note, you might want to time this so that you report the school just after you get paid for the month. That way if they do fire you on the spot you aren't going to have to fight for much pay owed.