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The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the Asian Development
Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences
of their use. Terminology used may not necessarily be consistent with ADB official terms.
Contents
1. Introduction
2. Basic social insurances for Migrant workers
3. Migrant-specific insurances under the provision of the EPS
4. Realities and Limitations
5. Conclusion
1. Introduction
Method of paying
Monthly Once a year Monthly Monthly
insurance fees
Employer &
Migrant worker
Person paying Employer (50%) Employer (50%)
Employer (100%) (paying only for
insurance fees Migrant worker (50%) Migrant worker (50%)
unemployment
benefit)
◦ the Korean National Pension Service (NPS)
◦ Since 1999, NPS follows the principle of reciprocity and bilateral social security agreements
between Korea and the migrant’s home country.
◦ Migrants whose countries do not cover Korean nationals, however, are excluded from the
coverage of NPS (Article 126 of the National Pension Act). Despite the above provisions, if
there are relevant provisions under the Social Security Agreement between Korea and migrants’
home countries, those provisions are applied (Article 127 of the National Pension Act).
◦ In principle, a lump-sum refund of the pension is not paid to foreign insured persons.
Nevertheless, in the case of foreigners falling under any of the following categories, a lump-
sum refund is paid.
◦ Persons whose country grants a benefit corresponding to a lump-sum refund under the
National Pension Scheme (principle of reciprocity). E.g., Thailand, Malaysia, Sri Lanka,
Indonesia, Kazakhstan, Philippines
◦ Persons whose home country has concluded a social security agreement with Korea
regarding the payment of the lump-sum refund, is eligible for the Korean lump-sum refund
as well as pension benefits (Article 126 of the National Pension Act; Article 113 of the
Enforcement Decree of the National Pension Act). E.g., China, Uzbekistan, Mongolia
◦ Since 2011, regardless of nationality, the following migrants have been eligible for the lump-
sum refund:
(1) migrant workers who are employed at a workplace covered by the National Pension as a
‘foreign workers’ stipulated in the act on employment of foreign workers (which fall under
E-9 or H-2 visa status under the Enforcement Decree of the Immigration Control Act)
(2) industrial trainees who are employed at the workplace covered and does not desert the
designated training places during required training periods under Article 10 of the
Immigration Control Act (which fall under E-8 visa status under the Enforcement Decree
of the Immigration Control Act).
3. Migrant-specific insurances under the provision of the EPS
Departure guaranty Guaranty Return cost Casualty insurance
insurance insurance insurance
Objective To reduce the burden To guarantee unpaid To supplement the To provide against
paying the severance salary costs necessary to death or disability of
pay in a lump sum return home migrant workers other
than industrial
accidents in
workplaces
Legal Basis Article 13 of the EFW Article 23 of the Article 15 of the EFW Article 23 of the EFW
Act, Article 21of the EFW Act, Article 22 Act, Article 22 of the Act, Article 28 of the
enforcement decree of of the enforcement enforcement decree of enforcement decree of
the EFW Act decree of the EFW the EFW Act the EFW Act
Act
Person who Employer Employer Employee Employee
subscribe to
insurance
Person insured Employee Employee Employee Employee
3. Migrant-specific insurances under the provision of the EPS (cont.)
Departure guaranty Guaranty insurance Return cost Casualty insurance
insurance insurance
Lump sum payment (the
Per employee 16,000 Lump sum payment
8.3% of employee’s salary amount varies
Insurance fees per month
(approx. US$15) won from 400,000 to 600,000
depending on gender,
per year won
age and period of stay)
Within 15 days of the Within 15 days of the eff Within 80 days of the Within 15 days of the
Application
effective date of the ective date of the employ effective date of the effective date of the
period employment contract ment contract employment contract employment contract
Death or disability
Total amount will be pai
Saving as a retirement pay caused by injury: max.
d upon departure of fore
Case of (when employee departure Total unpaid salary – ma 3o million won
ign workers for home co
insurance claim or change of working place ximum of 2 million won Death or disability
unties (except temporary
without desertion worked) caused by sickness: max.
return)
15 million won