Korea’s regulatory system for migrant workers offers many featuresworth emulating!

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

1. 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.
2. 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.
3. Workers get assured contracts of 3 years and which are extendable.
4. 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/