[2020 National Audit] Increase in Incheon National Pension Delinquent Workplaces... Heo Jong-sik "Establish Special Management System"

Unpaid Taxes Increased from 135 Billion KRW Last Year to 142.3 Billion KRW as of August This Year
Rep. Heo: "Workers Cannot Secure Benefit Rights Upon Business Closure"

Democratic Party of Korea Representative Heo Jong-sik

[Asia Economy Reporter Park Hyesook] The amount of unpaid National Pension insurance premiums by businesses in the Incheon area has been increasing every year.

According to data received from the National Health Insurance Service by Heo Jongsik, a member of the Democratic Party of Korea (Incheon Dong-gu·Michuhol-gu Gap), as of last year, there were 26,905 businesses in the Incheon area that had overdue National Pension insurance premiums, with the unpaid amount totaling 135 billion KRW.

As of the end of August this year alone, the number of delinquent businesses was 26,553, similar to the previous year, but the unpaid amount increased by 7.2 billion KRW to 142.38 billion KRW.

The unpaid National Pension insurance premiums in the Incheon area have shown an increasing trend: 122.9 billion KRW (27,132 businesses) in 2017, 128.4 billion KRW (26,958 businesses) in 2018, and 135.1 billion KRW (26,905 businesses) last year.

Looking at the status of the top 10 delinquent businesses, Company A has overdue payments including late fees amounting to 1.331 billion KRW over 21 months from November 2018 to July this year.

Company B is identified to have unpaid premiums of 688 million KRW from February 2010 to August 2013, and Company C has overdue payments of 298 million KRW over 32 months from May 2017 to July this year.

As of the end of last year, the total number of businesses nationwide with unpaid National Pension premiums was 518,000, with the unpaid amount reaching 2.2573 trillion KRW.

Currently, businesses with one or more employees are required to enroll in the National Pension. Employers withhold the National Pension insurance premiums from workers' wages and pay them to the National Pension Service. In particular, when premiums are unpaid, workers suffer damages.

In the case of health insurance, only the user faces restrictions on medical treatment when premiums are unpaid, and for industrial accident and employment insurance, workers do not suffer disadvantages even if premiums are unpaid, which contrasts with the National Pension situation.

Even when employers who intentionally fail to pay the National Pension are criminally prosecuted, courts tend to recognize "economic hardship" as a "justifiable reason" for nonpayment (Article 128 of the National Pension Act), resulting in relatively lenient penalties.

Last year, 71 cases of National Pension nonpayment totaling 4.31 billion KRW were prosecuted, but only 350 million KRW was collected. Among these, 13 cases were dismissed, and 11 cases were resolved through mediation without punishment.

Heo Jongsik emphasized, "If employers fail to pay insurance premiums, workers cannot secure eligibility for benefits, and in the event of business closure, securing benefit rights becomes impossible," adding, "A special management system for long-term delinquent businesses must be established to prevent harm to workers."