Wednesday, December 19, 2018
Korean SMEs Complain about National Pension Payments for Foreign Workers
Excessive Burden for Korean SMEs
Korean SMEs Complain about National Pension Payments for Foreign Workers
  • By Jung Suk-yee
  • November 29, 2018, 14:45
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Foreign workers from the eight countries including the Philippines, Thailand and Indonesia have to be covered by the National Pension Scheme.

The Korea Federation of SMEs has asked the Ministry of Health and Welfare to address business owners’ National Pension burden for foreign workers with an E-9 visa.

At present, foreign workers from the eight countries including the Philippines, Thailand and Indonesia have to be covered by the National Pension Scheme and business owners employing them have to pay half of their pension premiums. Specifically, the current annual burden of the SME owners is approximately 180 billion won.

“In view of the principle of reciprocity, the exchange between benefits provided for South Koreans staying abroad and the cost burden of South Korean SMEs for their foreign workers is unreasonable,” the federation said in a statement released on Nov. 28.

“Foreign workers with an E-9 visa have their own age limit and cannot stay in South Korea for more than nine years and eight months, which means the current system is contradictory to the main purpose of the National Pension Scheme, that is, social security for senior citizens,” the federation asserted. “Most of the workers get their pensions, including the payments from their former employers, when they return to their home countries, which is comparable to double retirement pays.”

It went on to say, “Most South Korean SMEs are currently suffering from an increase in labor cost and deteriorating business conditions,” asking the ministry to deal with the unreasonable situation without delay.