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Penelope
Joined: 23 Aug 2005
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 Posted: Wed Sep 07, 2005 9:22 am Post subject: 5% of Salary into "Special account?" |
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Is this normal? I am a newbie teacher hoping to get to Korea and my first contract stipulates that 5% of my salary would be put into a "special account", which I would receive after completing my contract. I find this sketchy. 
I am also wondering about taxes. I thought Americans were exempt from paying taxes in Korea for the first two years they lived there. This company said they would take 5% of my salary for taxes, but I swear the US has an agreement with Korea...
Anybody have any feedback on either of the above?
Thanks! |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Wed Sep 07, 2005 1:49 pm Post subject: |
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No, taking 5% is not normal. They are supposed to give severance pay that is equal to one month's salary, but that 5% does not sound like that. Ask for clarification--is that in addition to, or in place of, the legally required severance. It might be a new plot to protect themselves from teachers who run up utility bills and leave without paying.
American taxes: As far as I know, we pay Korean taxes. We are supposed to submit our income tax returns, but we don't make enough to pay taxes in the US. (I think the limit is $70,000 a year before we would have to pay.) This thing about a 2 year grace period is new. I just heard about it here a couple of weeks ago. No idea if it is true. It sounds fishy to me. BTW, Korean taxes are very low.
Good luck. |
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Son Deureo!
Joined: 30 Apr 2003
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| Posted: Wed Sep 07, 2005 3:24 pm Post subject: Re: 5% of Salary into "Special account?" |
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| Penelope wrote: |
Is this normal? I am a newbie teacher hoping to get to Korea and my first contract stipulates that 5% of my salary would be put into a "special account", which I would receive after completing my contract. I find this sketchy.
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This is obviously illegal UNLESS they are talking about your pension. All workers in Korea are required to contribute around 4.5% of their salaries to the government managed pension fund. The employer has to match this contribution, and if you're Canadian or American you get it all back, including what your employer contributed.
If you're actually referring to pension contributions, this is not only required by law, but also a pretty nice deal of an investment with a 100% profit margin at your boss' expense. 
If this 5% is going into a "special account" that is managed by your boss, he's illegally withholding your hard-earned salary try to prevent you from running away, or just plain steal money from your paycheck. 
If it's the latter, document it and go straight to the Labor Board. |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Wed Sep 07, 2005 4:02 pm Post subject: Re: 5% of Salary into "Special account?" |
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| Son Deureo! wrote: |
If this 5% is going into a "special account" that is managed by your boss, he's illegally withholding your hard-earned salary try to prevent you from running away, or just plain steal money from your paycheck. |
Would that necessarily be illegal? For example, "Your salary is 2,100,000 won a month. You get paid 2,000,000 and 100,000 is held as a bonus until the end of your contract. Deal? Sign on the dotted line."
I used to work at a software company and we paid testers $10 an hour + $2 for every hour they worked at the end of the contract. If they left, they didn't get the bonus. This was stipulated as a bonus, of course.
It really depends on the wording of the contract and the understanding going in.
The OP doesn't seem clear about much.
| Quote: |
| I thought Americans were exempt from paying taxes in Korea for the first two years they lived there. This company said they would take 5% of my salary for taxes, but I swear the US has an agreement with Korea... |
Is America the only nation on earth that taxes earned income? Korea actually taxes income too. Now is she saying they're taking off Korean taxes + 5% they claim is being remitted to the American government? If so, ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha. But 5% for Korean taxes is a bit high. It should be around 3.5%. |
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Veronica
Joined: 29 Aug 2005
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| Posted: Wed Sep 07, 2005 6:56 pm Post subject: |
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You would have to be stupid to sign anything like that - the only things deductable from your salary are national insurance - a pittance, tax - again small and pension. You may of course pay a 'deposit' which they will pay back to you - I had to before now, but got it back.
Any straight, honest employer will only take three things from you per month. Tax. Insurance and pension. Nothing more. |
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Son Deureo!
Joined: 30 Apr 2003
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| Posted: Thu Sep 08, 2005 5:43 am Post subject: Re: 5% of Salary into "Special account?" |
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| mindmetoo wrote: |
Would that necessarily be illegal? For example, "Your salary is 2,100,000 won a month. You get paid 2,000,000 and 100,000 is held as a bonus until the end of your contract. Deal? Sign on the dotted line."
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Good point. I didn't notice it was actually in her contract. If it is, might be legal and the OP was just an idiot for agreeing to it.
If so, suck it up and prepare for long year from an employer who probably has plenty of other tricks up his sleeve to exploit you with. |
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joe_doufu
Joined: 09 May 2005
Location: Elsewhere
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| Posted: Thu Sep 08, 2005 6:36 am Post subject: |
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| They took 600,000 won from my first paycheck as a deposit, to pay for leftover bills (and damages to the apartment) after I leave, which will be returned to me. Maybe this guy pays 5% of each check instead of a lump sum for security? |
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sarahsarah
Joined: 05 Aug 2004
Location: Bundang
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| Posted: Thu Sep 08, 2005 3:46 pm Post subject: |
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| A while back I taught in a school that took 10% of my pay as a guarantee that I wouldn't pull a runner or anything. It was in the contract and they promised to pay it back at the end of the contract, which they did. I was only working there part time, but I know they did it to their other two full-time foreign teachers. This wasn't their severance pay or anything having to do with pension...it was just a promised that they wouldn't leave without giving proper notice. I even actually left my contract early. As far as I know those girls got the money back too. I think you just have to know who you're dealing with and it's your decision on if you're going to trust them or not. |
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peppermint
Joined: 13 May 2003
Location: traversing the minefields of caddishness.
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| Posted: Thu Sep 08, 2005 4:04 pm Post subject: |
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| It's illegal to force people to pay any sort of security deposit. If you trust the employer, go for it, Just know that they can't force you to pay it. |
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Gord
Joined: 25 Feb 2003
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| Posted: Thu Sep 08, 2005 6:06 pm Post subject: |
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| peppermint wrote: |
| It's illegal to force people to pay any sort of security deposit. If you trust the employer, go for it, Just know that they can't force you to pay it. |
If they were told about it up front and still agreed to work there, then it's perfectly lawful. It would only be illegal if they said "surprise! We're keeping 5% to make sure you stay" after the fact. |
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joe_doufu
Joined: 09 May 2005
Location: Elsewhere
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| Posted: Thu Sep 08, 2005 8:54 pm Post subject: |
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| peppermint wrote: |
| It's illegal to force people to pay any sort of security deposit. If you trust the employer, go for it, Just know that they can't force you to pay it. |
It's illegal to force a hagwon to pay you 2 million won a month, too. That's why humans invented the CONTRACT which makes an agreement (and you can agree on almost anything you want to) legally binding. Through just such a device, a security deposit could be made legal. |
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