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hjupiter9
Joined: 31 Mar 2007 Location: Seoul
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Posted: Fri Jun 21, 2013 5:08 am Post subject: Pension Contribution Requirements when starting mid-month |
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So after years and years at a wonderful academy, I decided it was time to move on. I got a new job with an after school program in April of 2012. My first official day of work was April 4th, though it was preceded by two day of unpaid training.
I thought all was okay with the after school program. The head office wasn't extremely supportive, but I didn't really expect much more. I left the job at the end of the year because I got offered a really sweet position with a large company that I really wanted to take. I gave them notice per our contract, and was an on-time, reliable, and decent employee up until the end. (of course I was - who would write less about themselves?)
So now, more than a year after that first day of working there in April of 2012 my former academy forwards me a bill in the mail from the pension office saying that no payment was made into my pension for that month. I dig through my records and find my pay slip from that month. It shows that an amount was, in fact, deducted from my account by that after school program. I first called the pension office to determine if the bill was correct, and no pension contribution was made that month. It was accurate. There was a pension from March (from the academy I worked at before), and there were payments for every month after that I worked there (May until December). Just April was missing.
So I called the company and asked about. They asked to see the bill, so I scanned a copy and emailed it to them. A few days later I got the response saying that since I started working there after the first of the month, the company was not obligated to pay into my pension. Registration starts for employees working from the first of the month.
I was a little surprised to hear that statement, but after numerous phone calls, emails, and message board posts (in English and Korean) I have had this fact confirmed. Korean law stipulates that employers are not required to pay into your pension account if you start working there after the first of the month.
I did get the money returned to me that was deducted from my paycheck (since it was my earned income that they deducted for pension contribution, but did not contribute). After a few weeks of email banter back and forth with that after school program, I just gave up and paid the bill from the pension office by myself.
They are really truly legally not obligated to pay an equal contribution into my pension account for that first month since I started working after the first. I would have to take them to court over the matter having only my flimsy "contract" of a work agreement as evidence.
I just wanted to post this to encourage others to check their pension contributions for their first month of employment if they began working after the 1st day of the month (as is likely the case with many contracts). Your employer may have deducted the money and just pocketed it. If it was your first job in Korea, the pension office wouldn't notice the missing funds, and if you had changed jobs: the bill would be sent to your previous employer. That employer is not really obligated to find you and inform you (I was just lucky that they did).
I'm sure some readers are thinking at this point: Oh shocking! A dishonest employer in Korea. It's true, and I should have probably checked it all before. That's why I'm posting, in hopes of helping others to better protect themselves from this kind of deception. Stay vigilent, and please, don't feed the trolls. |
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nicwr2002
Joined: 17 Aug 2011
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Posted: Fri Jun 21, 2013 5:21 am Post subject: |
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At least you got the money returned to you so that you could pay that bill. I'm still a little skeptical about the not being required to pay pension though. Were you on an E-2 visa when you worked at that after school program? If you were then I'm pretty sure that the schools have to provide pension no matter what since you would be working 12 months regardless of when you started. Maybe the same doesn't apply to Koreans. |
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hjupiter9
Joined: 31 Mar 2007 Location: Seoul
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Posted: Fri Jun 21, 2013 5:48 am Post subject: |
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e2 visa at the time. I had the same doubts, but I spent the past two weeks confirming the policy. They are required to contribute for every month that you are registered, but if you start working after the first of the month, they are not required to register you until the next month. It's a really slimy loophole. |
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ontheway
Joined: 24 Aug 2005 Location: Somewhere under the rainbow...
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Posted: Sat Jun 22, 2013 9:15 am Post subject: |
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hjupiter9 wrote: |
e2 visa at the time. I had the same doubts, but I spent the past two weeks confirming the policy. They are required to contribute for every month that you are registered, but if you start working after the first of the month, they are not required to register you until the next month. It's a really slimy loophole. |
Think about this fairly and logically and you will see that this is not a "loophole" but a logical adaptation; it makes perfect sense based on the Korean Pension system.
Under the Korean Pension scheme your contributions are set at a fixed amount to be paid monthly - based on a calendar month. This also corresponds to the traditional system of paying employees monthly. The fixed amount is based on your base salary. Working overtime or less time does not affect the amount to be paid in. If you only work one day in a month you would still have to make the required payment.
Now, suppose you want to begin a new job and your employer wants to hire you. Other than beginning on the first of the month, there would be a gradual disincentive to hiring new workers that would increase throughout the month. Employers would tend to hang on to old workers till the last day of the month and hire new workers on or about the first. This would be create a lethargic and sticky labor market. It would be highly unlikely for anyone to be hired to begin during the last days and weeks of any month.
In the case of contract workers such as E2 teachers, if partial months were required to be paid at the beginning and the end of a contract, it would mean 13 months of contributions would be required on a 12 month contract whenever a teacher began and ended later than the first of a calendar month. The logical resolution is that the beginning partial month is exempt from pension coverage. The ending partial month is still required to be paid and employees who work continuously have no subsequent partial months.
Of course, in cases such as yours, individuals may be required to make their own full payments when switching jobs or during periods of part-time work or non-exempt unemployment.
Your employer should have been aware of the rule and not deducted pension for your first partial month. There is no way to determine without further evidence whether it was an attempt at petty larceny or a clerical error. |
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War Eagle
Joined: 15 Feb 2009
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Posted: Sat Jun 22, 2013 7:24 pm Post subject: Re: Pension Contribution Requirements when starting mid-mont |
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hjupiter9 wrote: |
I was a little surprised to hear that statement, but after numerous phone calls, emails, and message board posts (in English and Korean) I have had this fact confirmed.
After a few weeks of email banter back and forth with that after school program, I just gave up and paid the bill from the pension office by myself.
I would have to take them to court over the matter having only my flimsy "contract" of a work agreement as evidence. |
I am sure someone else out there will benefit from your story. So, I don't mean to belittle the intention. However.....
We are talking about 1 month pension right? Somewhere between 100,000 - 150,000 won? With the amount of time and effort you put into trying to squeeze these last few won out of your employer, you probably could have made up the difference, or more, by doing some work instead.
Time IS money. |
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TheUrbanMyth
Joined: 28 Jan 2003 Location: Retired
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Posted: Sun Jun 23, 2013 7:40 pm Post subject: Re: Pension Contribution Requirements when starting mid-mont |
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War Eagle wrote: |
hjupiter9 wrote: |
I was a little surprised to hear that statement, but after numerous phone calls, emails, and message board posts (in English and Korean) I have had this fact confirmed.
After a few weeks of email banter back and forth with that after school program, I just gave up and paid the bill from the pension office by myself.
I would have to take them to court over the matter having only my flimsy "contract" of a work agreement as evidence. |
I am sure someone else out there will benefit from your story. So, I don't mean to belittle the intention. However.....
We are talking about 1 month pension right? Somewhere between 100,000 - 150,000 won? With the amount of time and effort you put into trying to squeeze these last few won out of your employer, you probably could have made up the difference, or more, by doing some work instead.
Time IS money. |
Not to mention that taking them to court would likely cost more than he would end up recovering even if (and that's a big IF) the court found for him. |
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