Korea’s regulatory system for migrant workers offers
many featuresworth emulating
Posted by alex on February 9, 2015 in Articles, Facts, research, analysis
When an employer in South Korea needs to fill a
position with a foreign worker, he has to apply to the central
government’s Job Center. This state body will provide the employer with
three shortlisted workers and the employer has to choose from among
them.
When Kim Misun, executive director of We Friends,
an NGO helping migrant workers in Korea, described how the system works
in her country, it struck your writer as vastly different from
Singapore’s system. There may be a lot we can learn from Korea. The
purpose of this note is to describe what your writer learned from this
talk, as a basis for further thought.
Kim Misun, Executive Director, We Friends
Ms Kim was speaking at a conference organised by
Migrant Forum Asia, in Amman, Jordan, in December 2014. NGOs from more
than 13 countries from Japan to Lebanon were represented.
Basically, Korea’s recruitment of foreign workers is
closely tied to government-to-government agreements, whereas Singapore
tends to let private parties choose who they want to bring in. Korea
currently has agreements with 15 countries, with most workers coming
from China, Mongolia, Vietnam, and the Philippines. Foreign workers are
engaged in many sectors, from manufacturing to construction, services,
fishery and agriculture.
Korea’s Ministry of Employment and Labour maintains a
website in 16 languages, enabling potential workers from each of the
approved source countries to see for themselves what the Employment
Permit System (EPS) is and what working in Korea entails. The main URL (https://www.eps.go.kr/)
leads to the Korean-language version, but from there other language
versions are accessible. Clicking the Filipino flag will bring up the
English-language version.
Quotas for the number of migrant workers admitted
into South Korea are set by the Foreign Workforce Policy Committee, set
up within the Prime Minister’s Office. There are separate quotas for
each source country.
Looking for work and recruitment fees
Prospective
migrant workers need to sign up with their home country governments for
deployment to South Korea. In principle, as can be seen from the
above-mentioned website, applicants are to be selected based on
objective criteria, such as training qualifications. Employees pay
prescribed fees as per a schedule (click on thumbnail at right) which We
Friends shared with TWC2. The total fees vary by country of origin. At
the lowest end, Filipino workers pay about US$552; at the highest end,
US$1,740 for Pakistani workers.
This is completely different from the case of workers
wanting to work in Singapore, where our government makes no attempt to
regulate the amount in agents’ fees paid in workers’ home countries, and
where agent fees for new arrivals are rarely below S$8,000 (US$5,970)
in the case of non-domestic workers. This lack of regulatory oversight
has resulted in the currently dismal situation where the ability to pay
exorbitant placement fees is the chief determinant for recruitment, not
skill or qualifications. TWC2 has long pointed out that using the
ability to pay as the filter for selecting workers is not in Singapore’s
skills and productivity interest at all.
It occurred to your writer that the Korean system is
still not foolproof. It is entirely possible that even when recruitment
is routed through home country governments as required by Korea’s
system, prospective workers may be asked to pay more than the prescribed
fees. In many source countries, corruption is hardly unknown. Moreover,
with a language test component, an opening is also there for language
schools to charge exploitative fees. However, with the recruitment
system rooted in government-to-government agreements, the Korean
government has the leverage to cut off the quota from a particular
source country if the source country government is unable to eradicate
corruption at its end.
Ms Kim, in her talk, gave an example of how the quota
for Vietnam was severely reduced on one occasion, albeit not because of
unauthorised fees, but because too many workers from Vietnam were
exiting their proper jobs to go into the shadow economy after arriving
in Korea. Vietnam was then compelled to put in a better system to ensure
that its citizens abide by the law, in order to restore the quota. Even
if not directly related to the issue of recruitment fees, nonetheless
this example demonstrates the leverage the South Korean government has
over source countries.
This contrasts with the Singapore situation where
recruitment is entirely in private parties’ hands. Not only does our
government have no leverage, it takes a stand-off position with respect
to the issue of agent fees when such fees are transacted within home
countries. Yet, the consequences that high agent fees produce – the
vulnerability of workers to abuse and exploitation – are manifested in
Singapore, and therefore the failure to design a system for Singapore
that controls agent fees at source begins to appear as convenient denial
of moral responsibility.
The Korean example is instructive in that it shows how a way can be found to get to grip with the problem.
Looking for workers
In order to obtain foreign workers, employers must
demonstrate that they are unable to find local workers to fill their
vacancies. This requirement does not appear to be onerous. The EPS
website says “employers can apply for Employment Permit at Job Centers
in case of having failed to employ Koreans in spite of the efforts to
hire them (for 3 to 7 days).”
The Job Center then gives the employer a shortlist of three names for each vacancy, from which the employer is to select one.
A standard contract has to be signed between employer
and employee before a work visa is issued. This standard contract
includes details such as the agreed salary, working hours, rest days and
workplace. Naturally, it must conform with Korean law, which stipulates
that the minimum wage also applies to foreign workers.
More specifically, South Korea’s minimum wage for 2014 was 5,210 KRW per hour (approx US$4.73 or S$6.41, ) according to this source. This
translates to about US$900 (or S$1,200) per month, before overtime
pay. How does this compare with typical basic pay for migrant workers in
Singapore? It is about twice the level of basic salaries that
construction, cleaning and shipyard workers from Bangladesh and India
receive while working in Singapore. Their basic salaries are typically
in the region of S$450 –S$650. Even with massive amounts of overtime,
few of them get anywhere near the minimum basic wage that migrant
workers in South Korea enjoy.
Contract duration and premature termination
The standard contract is for a duration of three
years, extendable for an extra period of one year and ten months. Once
hired, a worker is not free to change job on his own, unless he is an
ethnic Korean foreigner (mostly from China). Ethnic Koreans can change
jobs.
If during this three-year period, the employer wants
to terminate the worker, the employer has to prove to the Job Center
Centre that he has valid reasons to do so. The Job Center will find
another job for the worker so that he can complete his three-year term,
said Ms Kim.
While Singapore too does not allow migrant workers on
Work Permits to change jobs on their own, the similarity with Korea
ends there. Singaporean employers can terminate a worker at any time
without any need to justify such action to the authorities. Once
terminated, the worker faces repatriation – which the law makes a legal
obligation for employers – without any assured opportunity to look for
another job.
Coupled with the high and unregulated recruitment
fees paid by workers coming to Singapore, when a job is lost within the
first year and a half of coming here, the worker typically finds himself
in a financial net loss position, not having recovered through earned
salary the amount he paid in recruitment fees. Singapore’s system is
callous and brutal when compared to Korea’s.
Training
A minimum of 16 hours of employment training is
conducted for workers upon their arrival in Korea, and the cost has to
be borne by employers. Currently, the training cost is 195,000 KRW
(about US$177) for manufacturing and service workers, 210,000 KRW (about
US$190) for those in agriculture, stockbreeding and fishery, and
224,000 KRW (about US$203) for those in the construction sector.
Typical earnings and salary issues
Typical earnings vary considerable by sector, but
with a minimum wage of around US$900 (S$1,200) before overtime, it is
very likely that in most cases, foreign workers in Korea earn rather
more than those in Singapore, job for job. Coupled with the fact that
recruitment fees are held down by regulation, the chief burden borne by
workers in Singapore — unpaid debt incurred in landing the job in the
first place — is largely eliminated.
Uzbek workers in South Korea
Moreover, salaries have to be paid through the bank,
which therefore provides an audit trail in case of dispute. Singapore
does not mandate payment though bank and many employers pay in cash
without even an itemised pay calculation given to the worker. This lack
of documentation makes it very hard for the foreign worker in Singapore
to prove his case should he be paid less than what he’s due.
Nonetheless, migrant workers in Korea report salary
problems too. Despite payment through bank, it is impossible for the
authorities to pre-emptively check every worker’s pay record. But when a
complaint is lodged, officials will perform an investigation. Moreover,
when there is a cluster of minimum wage violations – which tend to
occur in the agriculture sector – a special, wider-ranging investigation
will be conducted.
Health and medical treatment
Employers are required to take up industrial accident
compensation insurance, through paying into the state-run Korea
Workers’ Compensation and Welfare Service (Kcomwel). This is unlike the
case in Singapore where employers purchase insurance from private
insurers.
Their website is http://www.kcomwel.or.kr/eng/
where it states clearly that “All workplaces with (i.e. employing or
using) at least one full-time worker shall be subject to mandatory
coverage” and that “Migrant workers suffering from work-related
accidents are entitled for compensation including medical treatments,
regardless of whether his(her) residence is lawful or not”.
Kcomwel runs its own hospitals, with at least one in
every major city, complete with rehabilitation centers. This seems to
remove one of the major issues faced by migrant workers in Singapore:
that of hospitals refusing or delaying treatment because employers are
tardy in paying or in providing payment guarantees.
On the other hand, in Korea, a portion of medical treatment fees has to be paid by the worker, according to Ms Kim.
The law likewise provides for temporary disability
compensation (also known in Singapore as ‘medical leave wages’) to cover
the period during which the worker is unable to work, rated at 70% of
the worker’s average earnings over the previous three months. There is
provision for a higher percentage for low-income workers, though details
are unclear from the website. Additionally, it appears that temporary
disability compensation continues for as long as the worker is medically
unable to work; this is unlike the case in Singapore where this benefit
ends 12 months after the date of the injury regardless of whether the
worker can support himself or not. Our system leaves the worst-injured
e.g. amputees and those who need multiple operations and who take the
longest time to recover, in the lurch.
Despite this, Ms Kim reports that cases that are
difficult to be recognised as industrial accidents tend to be left out
of the system, and that is when NGOs have to come in.
Another area where NGOs play a big role is in
providing shelter to workers while they recover from their injuries.
Home country governments also run shelters.
Discussion
On the whole, We Friends was
of the view that Korea’s Employment Permit System (EPS) is an
improvement over the previous state of affairs. Before this, foreigners
came to work under a “training” system, and were paid only training
fees, not salary. They were not covered by labour laws. It took ten
years of struggle, said Ms Kim, to move policy-makers towards the EPS.
One area in which the situation has improved greatly
is that where 50 – 60% of “trainees” used to quit their jobs and go
underground as undocumented workers – causing a whole host of other
social problems – under EPS there has been a huge reduction. In 2011,
only 7.7% left their proper jobs to become undocumented workers.
There has also been an overall improvement in transparency under the EPS, said Ms Kim, and recruitment fees have gone down.
Nonetheless, the EPS has significant defects.
Chiefly, EPS is “very employer-centric”, said Ms Kim. ”If a worker is
not satisfied with a workplace, he cannot change jobs.” As one might
imagine, this opens the door to bullying behaviour by employers.
Moreover, employers continue to confiscate passports.
Essentially, there are four key differences between the Korean system and Singapore’s
- There is a lot more governmental oversight over who enters Korea to work. Employers do not hire directly from source countries – the source of many abuses we see in Singapore.
- Migrant workers enjoy the minimum wage in law even if in practice there are loopholes, and they are paid through the banking system, so checks can be made.
- Workers get assured contracts of 3 years and which are extendable.
- Medical care and compensation benefits for work-related illnesses and injuries come through a state-run body. This removes many of the chief obstacles faced by migrant workers in Singapore who face resistance and delays by employers unwilling to provide despite their legal obligation to do so.
It is not suggested that Korea’s system is perfect,
but it is evident that in several important ways, it is far better than
Singapore’s. It is also possible that this article contains small
inaccuracies since it is based on a talk, some follow-up email
communication and a perusal of relevant websites.
However, what is clear is that in a very fundamental
way there is a difference in approach. Singapore is more reliant on a
laissez-faire system, one that gives employers greater freedom to shift
costs and risks onto workers. This preference is rooted in the
overriding aim of keeping employers’ costs down, at the expense of
workers’ rights if need be, with the applicability of these rights often
contested by the state whenever these issues are raised. Given this
attitude, the defects of a laissez-faire system are, at the very
minimum, insufficiently addressed, and in some areas, ignored. The plea
that “nothing can be done; it’s outside Singapore’s control” is
undermined by the example from South Korea.
Ref;http://twc2.org.sg/2015/02/09/koreas-regulatory-system-for-migrant-workers-offers-many-features-worth-emulating/
