Korean Job Discussion Forums

[navogel]

Ok,

So a bit of backstory first: I got my first paycheck from my hagwon last week and there was no pension. It jump started a massive internet search for the facts regarding what is legal and what is not legal. I didnt care about the health insurance (dont go to the doc anyway) but I wanted that 4.5% employer contribution, dang it!

Here is my situation, and I suspect there are many others out there in the same boat:

I am currently getting 3.3% withheld from my taxes, no pension, and private health insurance - as per my contract my employer is paying half. (although to be fair it seemed like I was offered the option of national health insurance - but thoroughly "convinced" by the director I didnt need it)

This is what I did not know when I signed my employment contract:

There are two classifications of workers in Korea:

a. Employee
b. independent contractor

The Employee receives "wages" and gets 1.5-2%(ish) in tax withheld from their paycheck, but must pay into national health insurance and the national pension. (5.33% and 9% respectively) but half of each is paid for by the employer - which turns out to be awesome since you can get that entire 9% of the pension back when you leave korea! (if you are from the US.)

The independent contractor does not receive "wages" they get "business income" and must do their own taxes. They get 3.3% of taxes withheld and do not get enrolled in pension or national healthcare. (missing out on that extra 4.5% their employer would be paying)

It seems the big question on the boards seems to be whether or not being a IC (independent contractor) is legal for a hagwon employee or not.

Here is the evidence I found in an official NTS tax document:

[ttompatz]

welcome to the land of dodgy hagwons. You're not in Kansas any more there Toto.

Your options:

1) beat the dead horse and get fired (want to work in China do you?).
(losing your job without a LOR will typically mean NO work or visa until your old contract period has expired).

2) suck it up for a year and know better for next time.

.

[YTMND]

[John Stamos jr.]

You could also threaten them and tell them that you'll go to the labor board unless they give you pension and insurance, and they might quietly give you an LOR if you agree to stay on until they find a replacement. That worked for me and allowed me to get out of that miserable racket quickly

[faeriehazel]

I'm curious - do E2s have legal recourse if they're hired as independent contractors? I was under the impression that it was technically legal.

[World Traveler]

For an E-2? It's not legal (though ontheway will claim otherwise). Laws aren't necessarily followed here in Korea. There is a lot of law breaking going on. Tons of shadiness. On top of this, employees at the labor board are often lazy public servants who don't want to help you and who don't even know the laws. And the E-2 independent contractor thing isn't even under their jurisdistion I don't think. (If it's not, and they know it's not, they won't bother to help you.) Being treated fairly and legally will be a long uphill battle. (But yeah, sometimes mere threats of legal action (even if they can't be backed up) are enough).

[navogel]

Sure, I understand I could go at my employer and complain and all that...

But remember, (and honestly this is the most confusing thing about this whole thing) he has said I can choose to take National Health Insurance, and he would be paying half. Wouldnt that mean I would be automatically switched over to an employee status? At that point I could request to have less taxes taken out, and if he didnt enroll me in the pension, surely a call to the pension office would take care of it? It would essentially be forcing him to change my status on the sly, all while playing dumb.

Is there a way he could enroll me in the national health insurance plan and NOT switch me over to an "employee" from an IC?

I guess that is my question...

[NYC_Gal 2.0]

Sure, you may not go to the doctor, until you get hit by a taxi or get some rare meningitis and need 50 million won. Get insurance. Every year we see people fund raising for this kind of thing. Be an adult.

[navogel]

I guess I should have noted; I currently have private insurance for emergencies. just no coverage for doctors visits, sickness, etc. Although I suppose if I got some rare disease I would be sol.

[NYC_Gal 2.0]

[Juregen]

[ontheway]

[navogel]

Well believe me dude I wasnt trying to argue your points that some E2s are legal ICs. That tax document I found just says an "employment agreement" makes you an employee. From a tax perspective...

But please you tell me what you think of my contract:

a. no where does it mention contractor or independent contractor.

b. it does say 3.3% tax

c. It mentions employee twice:

"The employee should not teach classes or students at any other..."

"The term of this contract is from September 2013 to September 2014. This agreement constitutes the entire agreement between the employee and employer and supercedes all previous oral and written representations and understandings between the parties."

It is also signed as "employer" and "employee"

d. It also says this:

"Health Insurance: The Teacher will be covered by Health Insurance. According to the government guideline for teachers, the monthly insurance charge will be shared by the Institute and the Teacher."

So...

Should I request full national health insurance, pension (which should come along with it) and a lower tax rate?

Or maybe just start with the health insurance per the contract? Once I get national health insurance, he should HAVE to sign me up for the pension, right? He should also HAVE to pay me back the tax refund from the 3.3% bc as an employee he is filing my taxes.

What would you do?

[hogwonguy1979]

[John Stamos jr.]