Korean Job Discussion Forums

[gerald.in.korea]

Pension contributions are based upon all income received by the employee. So any Housing Allowance, car allowance, Mc Kim Bap allowance that is received as cash that is to be paid to the employee is used for the calculation of the Pension contribution required to be made by the employer and the employee.

The current Pension contribution rate is 4.5% for each the employer and employee.

Housing Allowances/Housing MAY become part of the Ordinary Wage and Average Wage calculation (used in Severance calculations etc) but it would have to be applied uniformly and regularly. Generally speaking, in the event that the housing allowance is only for "Foreign Workers" then it is considered a voluntary welfare benefit the employee is receiving and, while part of Income used for Pension Calculations, is not considered for the determination of the Average Wage or Ordinary Wage calculations.

Airfare is considered an Expense that the employer incurs (like buying a desk) and since it is a one time "fee" that is paid it is not considered part of Income for the purposes of calculating Pension.

[PRagic]

Good input. There was a case at a major university a long time ago, over ten years ago at least. The university had been paying pension contributions on the regular 'salary' only. In reality, the 'salary' was about half the income received, with the other half paid as a 'research fund'. They also had not been including paid work affiliated within the same university (e.g. teaching a class in the unigwon or editing).

One of the outgoing teachers took them to court and won, thus changing the system for good. Of course, the kicker was that the university then turned around, offered severely reduced pay for ESL teachers, and created term limits! Everyone left. Everyone.

So I guess you can win some battles, but then there's the whole war thing.

[gerald.in.korea]

It is always a balance between what people need and what people want and there is always a "point counter point".

I actually remember the case you are referring too but the knock on effect was that KangNam Labor Law Firm was able to use the ruling to then force mediated settlements with a number of other employers who were pulling the same monkey business.

While the next hires in that company had adjustments to their contracts there were so many other people who were not employees of that company that then benefited from the ruling.

It turns into that issue of the "greater good" the "common good" and the "where's my money".

Cheers