It is very difficult to find information on this question. The following is information I gathered by reading laws, browsing related organizations and doing web searches.

1. National Pension

National pension is mandatory to . . . → Read More: Korean social insurance system for expatriate employees]]> I already covered social insurance systems for Korean employees in my previous post. But what about social insurance for staff sent from headquarters to Korea?

It is very difficult to find information on this question. The following is information I gathered by reading laws, browsing related organizations and doing web searches.

1. National Pension

National pension is mandatory to foreign workers who are aged 18 to 59 and working in a company located in Korea with 1 employee or more.

The exception is when national pension of the foreign country does not apply to Korean workers working there. In this case, Korean National Pension is not mandatory for the concerned foreign worker (rule of reciprocity).

Currently, Korea has social security agreements with 15 countries such as Canada, United Kingdom, United States, Germany, China, Netherlands, Japan, Italy, Uzbekistan, Mongolia, Hungary, France, Australia, Czech, and Ireland.

The agreement affects application of the National Pension for foreigners.

For more information on social security agreements with individual countries, check the English page of the National Pension Service.

2. Industrial accident compensation insurance

Industrial accident compensation insurance is basically applied to foreign employees hired by a company in Korea.

As for the exemption, the same principle of reciprocity as the national pension prevails here.

3. Employment Insurance

Basically, foreign workers are excluded from the application of employment insurance.

- Optional -

However, for those who have E-7 and following visas, employment insurance is optional. They may subscribe to the insurance  or not. The same principle applies to holders of the following visas: C4, E-1, E-2 ~ E7, H-2.

For details of Korean visa types, visit E-Government for Foreigners website and read “Visa Issuance Guide – status of stay”.

- Reciprocity -

Foreign employees with following visas should follow the rule of reciprocity.

D-7: Supervisory intra-company transfer
D-8: Corporate Investment
D-9: Trade Management

4. Health Insurance

Health insurance is mandatory for workplace with one or more employees. However, a foreign employee with one of the following conditions can be exempted from Korean health insurance by submitting a paper and relevant documents to National Health Insurance Corporation.

The concerned employee’s health coverage is guaranteed by:
- his/her own country’s law
- his/her own country’s foreign insurance
- his/her contract with an employer

P.S. : Searching for relevent English – even Korean language – information on social insurances  for foreigners is a frustrating experience. Not a single government agency provides practical information on this issue on their English websites.

Hence, the contents above may not be correct 100 percent. Should you, as an expatriate manager or an expert in Korea, find any mistakes, please let me know.  I will correct it.

1. When do I have to subscribe to the insurances for Korean workers?

You should subscribe to the insurances when you hire . . . → Read More: On social insurances – for a start-up foreign company in Korea]]> Many foreign employers who newly start their business in Korea ask about social insurances scheme (employment insurance, industrial accident compensation insurance, national pension, and health insurance) in Korea. I provide here the most basic information on this subject.

1. When do I have to subscribe to the insurances for Korean workers?

You should subscribe to the insurances when you hire one or more full-time Korean employee. Each of the insurance is mandatory and managed by government agencies.

2. Are there certain categories of workers who are exempt from mandatory subscription to the insurances?

Yes.  For each insurance scheme, there are exempted workers as follows.

Employment Insurance & Industrial Accident Compensation Insurance

A part-time worker whose monthly working hours is less than 60 hours (including a part-time worker whose weekly working hours is less than 15 hours)

National Pension & Health Insurance

A part-time worker whose monthly working hours is less than 80 hours

3. Which agency do I contact for the insurances?

Here are links to English websites of each agency.

National Pension

Health Insurance

Employment Insurance & Industrial Accident Compensation Insurance (the agency has not much informaltion on employment insurance in the English website but it also manages the insurance)

Incidentally, these websites are only good as a simple information source. Don’t expect them to give foreign employers detailed procedures on taking care of insurances on their own.

4. How much do I pay as an insurance premium? 

According to the recent survey by the Mininstry of Labor for 3,339 companies with 10 or more employees, the insurance premium took up 6.7% of per capita labor cost in the year 2007. 

The folloiwng figures are based on the government notice for the year 2008.

Health Insurance

- 5.08% of monthly wage (premium is paid on a monthly basis)
- 2.54% borne by the employer, 2.54% borne by the worker

National Pension

- 9% of monthly wage (premium is paid on a monthly basis)
- 4.5% borne by the employer, 4.5% borne by the worker

Industrial Accident Compensation Insurance

The premium is paid once a year. The premium rate differs for each industry based on accident rates. It ranges from 553/1,000 of total wage in mining industry to 7/1000 in finance industry.

Employment Insurance

The premium is paid once a year.  It has two components, namely unemployment benefit and vocational ability development.

(unemployment benefit)

The premium for unemployment benefit is 0.9% of total wage (0.45% respectively borne by an employer and a worker)

(vocational ability development)

The premium for vocational ability development, to be paid by the employer alone, ranges from 0.25% (a company with less than 150 workers) to 0.85% (a company with 1,000 or more workers).