Understanding Social Insurance Deductions in Your Salary
Whether you’re a full-time employee or a part-time worker, understanding your rights concerning social insurance is crucial. Social insurance, which includes the National Pension, Health Insurance, Employment Insurance, and Industrial Accident Compensation Insurance, is a fundamental right for anyone working under the employer’s direction for more than 8 hours a day or 5 days a week. However, some employers deduct these contributions from salaries without actually enrolling their employees in these programs, which constitutes a serious legal violation.
Are You Actually Enrolled in Social Insurance?
Employers commonly deduct social insurance contributions from salaries, but it’s essential to verify whether these amounts are indeed being paid to the respective agencies. If not, this could be considered embezzlement or fraud. This malpractice can affect your employment history, insurance payment records, and even your year-end tax settlement.
Employment Status and Social Insurance Obligations
Social insurance isn’t exclusive to ‘regular’ employees. Any worker meeting the criteria for regular hours and oversight is entitled to these benefits. Even part-time workers who clock in at least 8 days a month are eligible. For both health insurance and the national pension, contributions are split equally between the employer and employee, making it illegal for employers to refuse enrollment.
The Misapplication of 3.3% Tax Withholding
Some employers misclassify employees as freelancers to apply a 3.3% tax withholding, appropriate only for independent contractors. This misclassification can lead to significant financial losses, as employees do not receive the appropriate benefits and tax credits entitled to them as salaried workers.
Tax and Insurance Implications of Misclassification
Being incorrectly classified as a business income earner can result in missed deductions and refunds during tax season. Moreover, it may lead to higher premiums as a self-employed individual for both national pension and health insurance. These errors can compound, leading to significant financial and legal challenges.
Steps to Verify Your Social Insurance Enrollment
Begin by checking your enrollment status with the respective social insurance agencies. Use the following contact information to verify your contributions:
- National Pension Service: 1355
- National Health Insurance Service: 1577-1000
- Employment Insurance via Ministry of Employment and Labor: 1350
- Industrial Accident Compensation Insurance: 1588-0075
Filing a Complaint with the Ministry of Employment and Labor
If discrepancies are found, submit a complaint to the Ministry of Employment and Labor. Ensure to include details such as hire date, job type, actual working hours, salary details, and deduction records. This can be done online and will prompt an investigation.
Reporting Tax Evasion
If a 3.3% tax deduction was applied, it may indicate your income was reported incorrectly as business income. Report such cases to the National Tax Service, which can conduct a thorough investigation into the employer’s practices.
Gathering Evidence for Legal Action
Before pursuing legal action or seeking professional advice, gather essential documents such as:
- Pay stubs or bank statements showing deductions
- Work logs or attendance records
- Copies of communication that confirm employment terms
- Employment contracts, if available
Even in the absence of a formal contract, communications like texts or emails can establish proof of employment.
Upholding Your Rights
Don’t dismiss these issues as minor financial losses. Incorrect social insurance deductions and classifications can impact your eligibility for unemployment benefits, retirement savings, healthcare, and even housing applications. Social insurance is a critical component of the social safety net and a right that you should actively protect.
Take action if you suspect any wrongdoing. Government agencies are available to assist and ensure your rights are preserved. Many have successfully reclaimed their rights with the help of labor authorities.
Don’t endure this alone. Stand up for your rightful benefits and ensure your social insurance contributions are appropriately managed.