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mr. positive
Joined: 02 Jan 2008
Location: a happy place
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 Posted: Mon Dec 23, 2013 6:33 pm Post subject: how is severance calculated these days? |
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So I will soon be wrapping up my current position and want to make sure I get all of the severance I'm legally entitled to. I've been there 23 months and my employment will officially end on January 23rd, 2014.
So how is severance calculated these days? I know I'll get almost two months' salary, but am wondering how salary is calculated. Technically I get salary and a housing allowance, but for the past year or so they've paid it just as one lump sum, with the whole salary + housing allowance being taxed. I also recently heard that there would be some changes to how such things are calculated, so tomorrow being my last day in the office (before vacation), I want to be armed with the facts.
Thanks in advance! |
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wes1989
Joined: 07 Jun 2012
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| Posted: Wed Dec 25, 2013 1:05 am Post subject: Re: how is severance calculated these days? |
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| mr. positive wrote: |
So I will soon be wrapping up my current position and want to make sure I get all of the severance I'm legally entitled to. I've been there 23 months and my employment will officially end on January 23rd, 2014.
So how is severance calculated these days? I know I'll get almost two months' salary, but am wondering how salary is calculated. Technically I get salary and a housing allowance, but for the past year or so they've paid it just as one lump sum, with the whole salary + housing allowance being taxed. I also recently heard that there would be some changes to how such things are calculated, so tomorrow being my last day in the office (before vacation), I want to be armed with the facts.
Thanks in advance! |
Can't exactly answer your question but it shouldn't matter if they pay your housing as a separate payment or a lump sum; it will all get taxed. The only difference is you should get a better pension if they pay it as 1 lump sum where as if they split it they don't factor the allowance into pension. Source http://forums.eslcafe.com/korea/viewtopic.php?p=2920321 |
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mr. positive
Joined: 02 Jan 2008
Location: a happy place
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| Posted: Wed Dec 25, 2013 2:24 am Post subject: |
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| Thanks, wes1989. I'd heard that technically salary and housing allowance are both considered income (hence the distinction between the two is basically moot). Add to that the fact that they pay me both at once and tax both, I think I have a pretty good shot at my severance including both - hopefully they'll just calculate it that way and I won't have to worry about it. If there are no more replies to this thread, though, I may have to make a call to the labor board for clarification and then post here the info I get from them. |
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Troglodyte
Joined: 06 Dec 2009
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| Posted: Wed Dec 25, 2013 6:20 am Post subject: |
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It is calculated as your average monthly pay over the last three months of your employment with that company. Severance includes all regular payments from the company if they are paid monthly or quarterly. This includes housing allowance, travel allowance (if it's based on a monthly allowance and not based on irregular travel), food allowance, etc. It does not include in kind payments (e.g. you get free lunch or free rent) - only money income.
Remember that it's based on the last three months of your employment. If you didn't receive housing allowance during the first year, it's irrelevant because you DID receive it in your last three months. Same goes for any pay raises you've received.
The problem is that if they try to rip you off, it will be difficult to force them to pay you correctly if you're leaving the country. If you're sticking around, then it's another story. |
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wes1989
Joined: 07 Jun 2012
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| Posted: Thu Dec 26, 2013 4:24 pm Post subject: |
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| Troglodyte wrote: |
It is calculated as your average monthly pay over the last three months of your employment with that company. Severance includes all regular payments from the company if they are paid monthly or quarterly. This includes housing allowance, travel allowance (if it's based on a monthly allowance and not based on irregular travel), food allowance, etc. It does not include in kind payments (e.g. you get free lunch or free rent) - only money income.
Remember that it's based on the last three months of your employment. If you didn't receive housing allowance during the first year, it's irrelevant because you DID receive it in your last three months. Same goes for any pay raises you've received.
The problem is that if they try to rip you off, it will be difficult to force them to pay you correctly if you're leaving the country. If you're sticking around, then it's another story. |
Do you have any source for this? |
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I-am-me
Joined: 21 Feb 2006
Location: Hermit Kingdom
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| Posted: Fri Dec 27, 2013 6:06 am Post subject: |
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| Remember that it's based on the last three months of your employment. |
Article 34 (Severance Pay System)
(1) An employer shall establish a severance pay system whereby an average wage of more than 30 days shall be paid for each year of consecutive years employed as a severance pay to a retired worker; however, if the worker was employed for less than one year, this shall not apply.
Nothing in labor law about last 3 months. |
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Skippy
Joined: 18 Jan 2003
Location: Daejeon
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| Posted: Fri Dec 27, 2013 7:40 am Post subject: |
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| I-am-me wrote: |
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| Remember that it's based on the last three months of your employment. |
Article 34 (Severance Pay System)
(1) An employer shall establish a severance pay system whereby an average wage of more than 30 days shall be paid for each year of consecutive years employed as a severance pay to a retired worker; however, if the worker was employed for less than one year, this shall not apply.
Nothing in labor law about last 3 months. |
Because you are quoting an old copy of the law. You need to check out the Employee Retirement Benefit Security Act. Give chapter 2 a good read.
As to the three months well that is mentioned in the above act - Employee Retirement Benefit Security Act Article 2. Which says
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4. "Average wages" refers to average wages under Article 2
(1) 6 of the Labor Standards Act; |
So of to the Labor Standards Act we go. Thus states -
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| 6. The term "average wages" means the amount calculated by dividing the total amount of wages paid to a relevant worker during three calendar months immediately before the day on which a cause for calculating his/her average wages occurred by the total number of calendar days during those three months. This shall apply mutatis mutandis to the employment of less than three months; |
This definition of average wages is used to calculate severance. Thus referencing Employee Retirement Benefit Security Act
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Article 8 (Establishment, etc., of Retirement Pay System)
(1) An employer who intends to set up a retirement pay (AKA my words SEVERANCE)system shall set up the system that makes it possible to pay a retiring worker 30 days or more of the average wages for each year of his/her consecutive service as retirement pay.means the amount calculated by dividing the total amount of wages paid to a relevant worker during three calendar months immediately before the day on which a cause for calculating his/her average wages occurred by the total number of calendar days during those three months. This shall apply mutatis mutandis to the employment of less than three months; |
Besides even using the old law which you mention it would have said 3 months. Going back the Labor Standards Act of 2003.
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Article 19 (Definition of Average Wages)
(1) The term “average wages” used in this Act means the amount calculated by dividing the total amount of wages paid to a relevant worker during three calendar months immediately before the day on which a cause for calculating his average wages occurred by the total number of calendar days during those three months. This shall apply mutatis mutandis to the employment of less than three months.
(2) When the amount calculated pursuant to provisions of paragraph (1) is lower than that of the ordinary wages of the worker concerned, the amount of the ordinary wages shall be deemed his average wages.
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