Migrant workers can receive severance pay only after departure

By Kim Yon-se
  • Published : Jul 29, 2014 - 20:56
  • Updated : Jul 29, 2014 - 20:56
Migrant workers must now wait until they leave the country to receive severance pay. Migrant workers must leave the country when their visas expire, and according to law since 2011, South Korean employers have been obliged to pay their severance before their departure.

The government introduced the policy, dubbed “departure guarantee insurance,” in August 2011 in an effort to prevent employers from withholding severance pay when migrant workers leave Korea as their permitted working period ends.

However, now a revised law took effect on July 29, saying foreign workers must receive the severance pay not “before their departure” but “after they leave the country.”

Employers will not violate the law if they pay severance after a worker’s departure, as long as they make the payment within 14 days of said departure.

Government officials claim that the revised law will prevent more illegal migrant workers from staying in the country.

“We’ve found that a certain portion of registered workers did not leave the country even after they were paid their severance pay,” an official said. “They had no choice but to become the target of law enforcement authorities as their visas expired.”

He predicted that the new payment system will eventually block the increase in the number of illegally residing workers.

But the revised policy has angered foreign workers. They have been staging rallies in major cities including Seoul over the past few days. The migrant workers demand that the Korean government withdraw the implementation of the new rule. The law is based on discrimination against foreigners and infringement upon their rights, said the protesters.

Under the so-called departure guarantee insurance, since 2011, all Korean enterprises hiring foreign workers had to set aside money on a monthly basis to provide severance pay to these employees when they completed their contracts before they left the country.

Because it was difficult for such workers to get the money through lawsuits, the government expanded the guarantee system to all workplaces at that time.

For employees working for at least a year, employers are obliged to pay severance equivalent to one month’s wages.

So, according to the system, employers should deposit funds equivalent to one-twelfth, or 8.3 percent, of a worker’s monthly salary to the agency in charge of the guarantee insurance, every month. After working one year, the worker then can receive the accumulated money as severance pay.

Samsung Fire & Marine Insurance is currently the insurance managing agency, and will likely continue to be in charge of the payment after the policy change.

By Kim Yon-se (