I am an English instructor working in an English school. After working for about a year, I found out that I was eligible for health insurance and national pension. I asked the director to subscribe to health insurance and national pension retroactively from the date I began working. After that, I quit the school, but I did not receive any final salary because my year’s national pension and health insurance premiums had been deducted from my severance pay and final salary. I am in a difficult situation now because suddenly I’m unable to receive any of my expected wages. Is it legal for an employer to deduct all the old premiums at once?
According to Article 43, Paragraph 1 of the Labor Standards Act, wages must be paid to workers in full. However, according to Paragraph 2 of the Act, if prescribed by statutes or collective agreement, deductions of part of the wages is possible. Therefore, under the National Pension Act and the Health Insurance Act, whenever an employer pays wages to insured workers on a regular basis, the employer is allowed to deduct the employee’s share of the premiums—in this case, 50% of the national pension premium and 50% of the health insurance premium.
However, premiums for national pension and health insurance must be deducted every month from the first day of employment. If the wage is paid without the relevant deductions every month, the wages may be regarded as overpaid due to a mistake in their calculation. If so, when the employer wants to the wage to be paid is to be offset by retroactive deductions, the time of execution should be reasonable so the substance of the settlement is made and wages are adjusted so there is no risk of harming the financial situation of the worker.
If the premium deductions retroactive to the previous year are not made over a reasonable timeline in amount and method and the worker’s financial situation is harmed by the worker not receiving the final salary payment and severance pay, deducting the premiums in a lump sum will not be permitted without employee consent.