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Gov’t to help overseas workers receive severance pay

Korea will strengthen the management of its departure guarantee insurance system that covers non-Korean workers in the country.
 
The Korean government will help foreign workers receive their departure guarantee insurance, which many of them fail to receive when they depart Korea. The Ministry of Employment and Labor announced on July 22 that the cabinet council passed a revised enforcement ordinance concerning the foreign workers employment law. According to the ministry, the revised law will take effect July 29. 

The departure guarantee insurance system is designed to secure severance pay for foreign workers. Under the system, a proportion of their income is deducted from their monthly wage and accumulates in a government-run account. The severance pay for non-Korean workers will be managed as a form of departure guarantee insurance, according to the revised law. Foreign workers who wish to receive their allotted money can get it after passing through the departure process at the airport, or have it sent directly to their bank account in their home country. 

As of June 2014, about 27,600 cases of unreceived departure guarantee insurance were reported, amounting to some KRW 14.4 billion. 

The ministry said it will form a new committee which will be in charge of unreceived severance pay in order to carry out its goal of helping foreign workers receive the money due to them. The new committee will be set up under the Human Resources Development Service (HRDS). In the case of unreceived severance pay for recipients with unknown addresses, the ministry will seek ways to send the money to their home country to help the individuals receive their money. 

The revised law also strengthens the rights of qualified recipients. In the past, when a worker left his place of employment, his departure guarantee insurance belonged to the employer. Under the new law, however, foreign workers will receive their money even if they leave their place of employment, if they have worked there for more than 12 months. 

Under the new law, an employer must pay the difference if a foreign worker’s departure guarantee insurance is lower than his severance pay. Workers with more years of employment and many overtime duties will get a larger severance pay, in general, which will make a difference between that and their departure guarantee insurance. In the past, many workers ignored the difference due to a lack of knowledge or some other reason. According to the revised law, however, insurance companies need to inform the worker about the difference by providing written documents. 

The conditions for the provision of the departure guarantee insurance are clearly stated in the revision. According to the revised law, foreign workers who change their place of employment can receive their departure guarantee insurance after they depart Korea. In the case of an emergency, when the money is needed to make ends meet, they can receive a loan based on their departure guarantee insurance amount. These cases include foreign workers who need more than four weeks of recuperation due to workplace injuries or disease, or who are forced to change employers without legal responsibilities. If this is the case, they can receive a loan of up to 50 percent of their departure guarantee insurance amount. 

Foreign workers can ease the burden of paying the cost of insurance by dividing up the payment, according to the legal revision. The payment period has also been extended from 80 days to 90 days. 

Korea.net asked the following questions to a labor ministry officer. 

– When will the new committee for unreceived departure guarantee insurance be established under the HRDS?
The committee is an organization that will consider and make decisions. To help foreign workers receive their departure guarantee insurance, we need procedures that require the transfer of the unreceived severance pay from insurance companies to the individuals, forming a list of committee members and so on. We plan to finish these procedures by this August. 

– If a foreign worker who has already left for their home country wants to receive their departure guarantee insurance, what should they do? Can they apply online? 
They can make an online application for their departure guarantee insurance at the homepage of theEmployment Permit System (EPS), at overseas branches of the HRDS, at related organizations or via mail. They need to prepare the necessary documents in person — an application form, a personal identification card, a photocopy of their bank statement and so on — and upload these at the EPS homepage. In some countries, however, they need to visit the place in person. 

– If a foreign worker who has changed his place of employment wants to apply for a loan based on his departure guarantee insurance to cover the cost of living, what should he do? 
In the past, they were not allowed to receive a loan based on their departure guarantee insurance. The revised law, however, enables them to do so. It is up to them to chose from which financial organization they wish to receive the loan. We will work with insurance companies to introduce loan programs with lower interest rates. These loan programs will be launched in October this year, with more details to come. 

– How many times can a foreign worker divvy up the payments for such a loan? 
In the past, they had to pay the insurance cost all at once. The revised law, however, allows them to divvy up the payments into as many as three installments over 90 days. They can also choose the amount of each of the payment. This will apply to foreign workers who will arrive in Korea on July 29 or later. 

– What significance does the revised law hold?
The revised law focuses more on the initial purpose of the departure guarantee insurance and strengthens the rights of foreign workers to receive their money. The revision improves the existing system, which caused some inconvenience and complaints.