Repeal Retrogressive Revision of Migrant Worker Pension System


1.    Revised Act on the Employment etc. of Foreign Workers announced on 28 January 2014 is proposed to come into force on 29 July 2014. Article 14 Paragraph 3 of the said act specifies departure guarantee insurance to be paid ‘within 14 days after the departure of the insured’. According to the Ministry of Employment and Labor’s reply to Korea Confederation of Trade Union’s freedom of information request, the revision means that “foreign workers will have their insurance paid within 14 days after their departure following the end of their employment in Korea”. In an event that a migrant worker (on EPS) changes his/her workplace, it is said that the previous as well as the new employer should accumulate severance payments for the migrant worker in the departure guarantee insurance which will be withheld by the insurance company until s/he returns to the country of origin (within 14 days of departure from Korea). It is also said that in the event the amount of severance payment exceeds the amount of departure guarantee insurance payment, then the migrant worker can claim the differential from previous employers only (in the event a migrant worker has changed his/her workplace) immediately before his/her departure.

2.    Departure guarantee insurance payment is calculated from a set proportion of base payaccumulated over the employment duration, and in usual circumstances the calculable severance is greater than the departure guarantee insurance because severance is calculated on the basis of average monthly income. Because of Korea’s wage and industrial structure, the average monthly income is almost always greater than the base pay. Migrant workers have claimed the differential severance payment differential after their departure guarantee insurance at the end of their employment before departure. However, the proposed revisions which mandate departure guarantee insurance to be paid after the departure would prevent workers from claiming the differentials in full, as claiming the amount to employers after leaving the country would be very difficult with no means for due process when an employer fails to pay in full.

The proposed revisions state that departure guarantee insurance is paid after departure and only the differential severance from previous workplaces (if a worker has changed his/her workplace) can be claimed at the end of their stay in Korea which can be as long as four years and ten months allowed under the EPS; these terms do not reflect conditions in reality. All workers need to be paid their severance payment timely at severance of their employment, and the proposed revisions are especially blind to migrant workers’ general sense of instability. To claim differential severance pay years after the end of employment seems not only complicated but also realistically unattainable.  

3.    In reply, the Ministry of Employment and Labor stated that ‘the [proposed] departure guarantee insurance payment in lump sum is designed to help [migrant workers] resettle successfully in their home countries when they return, rather than having insurance partially paid at termination of employment when a worker changes his/her workplace’. In addition, the Ministry stated that ‘some foreign workers have not departed after collecting their insurance payment and stayed illegally, and this problem of illegal stay is best prevented beforehand rather than resulting in the immigration raids afterwards’.

The Labor Standards Act Article 36 mandates a worker be paid severance within 14 days after the severance of his/her employment, which contradicts the proposed revisions. The Ministry pretends that the revisions are for welfare of migrant workers, when their purpose is merely the ‘prevention of illegal stay’, despite there being no known empirical proof on the relationship between undocumented workers and their severance pay collection.

4.    Severance payment is part of wages. It is not only the right of a Korean national to be paid severance but the ‘right of all humans’ who work in Korea. If the Ministry wishes to prevent illegal stay, then it should be administered through improvement of working conditions and effective management of immigration control, rather than through infringement on the right of migrant workers to claim their fair wages. This is an infringement of migrant workers’ property rights, right of dignity and value, and the right of equality  as it discriminates against migrant workers who are treated differently from non-EPS migrant workers and Korean nationals,

Therefore, the proposed revisions are anti-constitutional and invalid according to the principle of proportionality. The proposed revisions should be annulled immediately.


1 April 2014

Alliance for Migrants Equality and Human Rights