Purchase of Return Cost Insurance/Trust
What Is the Return Cost Insurance/Trust?
- It refers to an insurance policy or a trust deed which foreign workers are required to purchase in order to prevent them from illegally staying in Korea by encouraging them to depart from Korea upon expiration of the period of stay and to cover expenses incurred for their return to home countries.
Individuals Subject to Purchase a Return Cost Insurance/Trust
- Every foreign worker who engage in employment in the Republic of Korea under Non-professional Employment (E-9) status and Working Visit (H-2) status is subject to purchase a return cost insurance/trust (Article 15 Section 1 of the Act on the Employment, etc. of Foreign Workers).
Purchase Period
- A foreign worker shall purchase a return cost insurance/trust no later than 3 months after the effective date of his/her employment contract. (Article 22 Section 1 of the Enforcement Decree of the Act on the Employment, etc. of Foreign Workers).
※ What is the Effective Date of an Employment Contract?
· For foreign workers under Non-professional Employment (E-9) status: the date of entry into Korea.
· For foreign workers under Working Visit (H-2) status: the date of commencing employment as set forth in the employment contract.
· If a foreign worker who has entered Korea changes a place of business: the date of commencing employment as set forth in an employment contract.
Insurance Fees
- Foreign workers are required to pay the amount setforth below for each country in a lump sum or in not more than 3 installments (subparagraph 1 of Article 22(1) and (3) of theEnforcement Decree of the Act on the Employment of Foreign Workers and the amount paid by country for the insurance and trustdesigned to cover the cost of foreign workers’ return home).
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Classification
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Country (Nationality of a Foreign Workers)
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Insurance Fees
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Group 1
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China, The Philippines, Indonesia, Thailand, Vietnam
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400,000 won
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Group 2
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Mongolia and othercountries
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500,000 won
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Group 3
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Sri Lanka
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600,000 won
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Grounds for Insurance Benefit Payment
- A foreign worker may file an application for lump-sum payment under return cost insurance/trust in any of the following cases (Article 22 Section 2 of the Enforcement Decree of the Act on the Employment, etc. of Foreign Workers) :
1. Where he/she intends to depart from Korea due to expiration of his period of stay;
2. Where he/she intends to depart from Korea (excluding temporary leaving) for his/her personal reasons before the expiration of his/her period of stay;
3. Where a foreign worker who has deserted his/her business or place of business depart from the country voluntarily or is involuntarily deported.
- If a foreign worker files an application for lump-sum payment under return cost insurance/trust, an insurer dealing with such insurance policy and/or trust must pay the lump-sum payment after confirming with the head of the Immigration Service or a head of an immigration office having jurisdiction over the relevant place about his/her departure from Korea (Article 22 Section 1 Subsection 3 of the Enforcement Decree of the Act on the Employment, etc. of Foreign Workers).
- A claim of insurance benefit under return cost insurance/trust must be made within 3 years from the date any event or accident that triggers payment under such insurance policy and/or trust occurs so that the statute of limitations for such claim of benefit has not run. In such cases, the insurance benefit payment is to be transferred to the Human Resources Development Service of Korea (Article 13 Section 4 and Article 15 Section 3 of the Act on the Employment, etc. of Foreign Workers).
Sanctions for Violation
- Foreign workers who fail to purchase return cost insurance/trust are subject to an administrative fine of 800,000 won (Article 32 Section 1 Subsection 6 of the Act on the Employment, etc. of Foreign Workers and Table 4 attached to the Enforcement Decree of the Act on the Employment, etc. of Foreign Workers).
Purchase of Personal Injury Insurance
What Is a Personal Injury Insurance?
- It refers to an insurance policy to be purchased in preparation for illness, death, and other accidents other than accidents on duty. Foreign workers are required to purchase a personal injury insurance regardless of whether he/she has purchased an industrial accident compensation insurance
Individuals Subject to Purchase of Personal Injury Insurance
- Every foreign worker who engages in employment in the Republic of Korea under either Non-professional Employment (E-9) or Working Visit (H-2) status is subject to the obligation to purchase personal injury insurance (Article 23 Section 2 of the Act on the Employment, etc. of Foreign Workers and Article 28 Section 1 of the Enforcement Decree of the Act on the Employment, etc. of Foreign Workers).
Purchase Period
- Every foreign worker who engages in employment in the Republic of Korea under either Non-professional Employment (E-9) status or Working Visit (H-2) status must purchase personal injury insurance policy not later than 15 days after the date his/her employment contract enters into force (Article 28 Section 2 of the Enforcement Decree of the Act on the Employment, etc. of Foreign Workers).
※ What Is the Effective Date of an Employment Contract?
· For foreign workers under Non-professional Employment (E-9) status: the date of entry into Korea.
· For foreign workers under Working Visit (H-2) status: the date of commencing employment as set forth in an employment contract.
· If a foreign worker who has entered Korea changes a place of business: the date of commencing employment as set forth in an employment contract.
Insurance Fees
- Insurance fees vary by the age, gender, and period of insurance policy of a foreign worker.
Grounds for Insurance Benefit Payment
- If a foreign worker dies or falls sick, the foreign worker or his/her bereaved family members may file a claim for the payment of the insurance benefit under personal injury insurance against the insurance company (Article 28 Section 2 Subsection 2 of the Enforcement Decree of the Act on the Employment, etc. of Foreign Workers).
Sanctions for Violation
- Foreign workers who fail to purchase personal injury insurance are subject to a fine not exceeding 5,000,000 won (Article 30 Subsection 2 of the Act on the Employment, etc. of Foreign Workers).
Receiving Insurance Benefit under Departure Guarantee Insurance and Guarantee Insurance for Overdue Wages
Application for Insurance Benefit Payment under Departure Guarantee Insurance/Trust
- If a foreign worker who has rendered a continuous employment of at least 1 year leaves (excluding temporary leaving) Korea or dies or his/her status of stay is changed, such foreign worker may file a claim for the accumulated amount in a lump sum (the main body of Article 21 Section 2 Subsection 2 of the Enforcement Decree of the Act on the Employment, etc. of Foreign Workers).
- A lump-sum payment under departure guarantee insurance/trust is accumulated by an employer on a monthly basis. However, where the employment relation with a foreign worker is terminated or his/her status of stay is changed, the employer must pay the foreign worker the difference between the amount of the lump-sum payment under the departure guarantee insurance/trust and the amount of the retirement allowance if the former is less than the latter (Article 21 Section 3 of the Enforcement Decree of the Act on the Employment, etc. of Foreign Workers).
- The period of payment shall be within 14 days from the departure of the insured or beneficiary from Korea (if the application for insurance benefit payment is filed based on change of status of stay, death, etc. or is filed after the departure from Korea, within 14 days from such application) (Article 13 Section 3 of the Act on the Employment, etc. of Foreign Workers).
Application for Insurance Benefit Payment under Guarantee Insurance for Overdue Wages
- A foreign worker must report matters regarding delay in wages payment to the Labor Supervision Division of the Regional Ministry of Employment and Labor or the employment center if ① a business or place of business is not covered by the Wage Claim Guarantee Act, or ② a business or place of business employs less than 300 regular workers [excluding a business engaging in construction industry which employs foreign workers under Working Visit (H-2) status]. If such matters regarding delay in wages payment have been confirmed to be true, the foreign worker may file an application for insurance benefit payment with the Human Resources Development Service of Korea.
- If the amount of wages delayed in payment by the employer exceeds the limit of the guaranteed amount of money, the foreign worker is entitled to such delayed wages within the limit of the guaranteed amount of money. For the rest of the delayed wages not covered by the guaranteed amount of money, the foreign worker may directly make a claim against the employer or make inquiries to the Labor Supervision Division of the Ministry of Employment and Labor.