Pension Payments May Be Halved for Delivery Workers | Be Korea-savvy

Pension Payments May Be Halved for Delivery Workers

(image: Yonhap)

(image: Yonhap)

SEOUL, Sept. 4 (Korea Bizwire) – What do insurance planners, delivery workers, golf caddies, home-school teachers, and designated drivers have in common in Korea?

The answer is that they are subscribed as “individual contributors” to the national pension plan. This may change, however, says National Pension Service (NPS) and Ministry of Health and Welfare (MOHW).

The Ministry of Employment and Labor (MOEL) will examine the possibility of shifting the contribution category of these jobs from individual to workplace-based, in accordance with guidance issued by the National Pension Scheme Development Committee (NPSDC) on September 4. 

Workplace-based contributors are only on the hook for 50 percent of their pension contributions, as their employer covers the other half.

Until now, workers that fall under the “special employment” category according to the Labor Standards Act were not considered paid workers as they do not have an employment contract.

These workers, estimated to number 2.2 million in 2015, nominally provide labor and services to other businesses, and therefore are less protected by labor laws. For example, they cannot receive unemployment benefits, and have to individually register for the national pension scheme.

Should their status change to workplace-based contributor, their workplace would have to cover half of the pension contribution, which amounts to 9 percent of an employee’s monthly salary (4.5 percent paid by the employee and 4.5 percent paid by the employer). 

This came after the MOEL’s decision on July 31 to allow special employment workers and artists to receive unemployment benefits if they lose their job involuntarily or due to a substantial reduction of their income. A minimum of 12 months of contributions (nine months for artists) are required to be eligible for the benefit. 

The following nine jobs are to be considered first: Insurance planners, golf caddies, home-school teachers, delivery workers, designated drivers, motorcycle delivery express, concrete mixer drivers, loan consultants and credit card consultants.

The MOEL will give these occupations priority consideration as they are currently eligible for the work accident compensation plan.

The MOEL is shaping its policy to bring more workers under its protection, after recently receiving such a proposal from International Labor Organization and National Human Rights Commission.

By Joey Yoo (

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